Brentwood City Council
May 28, 2024

CITY COUNCIL/SUCCESSOR AGENCY AGENDA
Zoom Webinar ID: 760 1397 0037

May 28, 2024, 7:00 p.m.

City Council Chambers
150 City Park Way
Brentwood, CA 94513
City Council Zoom Link
A. CALL TO ORDER & ROLL CALL
B. PLEDGE OF ALLEGIANCE
C. REPORT ON CLOSED SESSION
D. PUBLIC COMMENTS
Pursuant to Council/Administrative Policy, Meeting Rules and Procedures section 5.2 (Decorum Generally – Public), comments by members of the public are generally limited to five minutes, or less time if a large number of speakers is anticipated, or if approved by the Mayor. Speakers desiring answers to questions should direct them to the Council/Successor Agency and, if relevant, they may direct them to the appropriate staff member. Speakers can also follow up directly with staff during regular City business hours.

Please file a speaker’s card with the City Clerk on the form provided on the counter at the back of the Chambers.

During this portion of the meeting those present in the Council Chambers are permitted to speak on items that are listed under Presentations; Informational Reports; Consent Calendar; Requests for Future Agenda Items- New Items; or items not on the agenda during this portion of the meeting. Public comments for scheduled agenda items should wait until that time.

Zoom participation during this general public comment period will not be accepted.

E. PRESENTATIONS
E.1 Presentation from Los Medanos College related to dual enrollment E.2 Presentation from the members of the Internship Pilot Program.

F. INFORMATIONAL REPORTS FROM COUNCIL MEMBERS, COMMITTEES, LIAISONS, AND STAFF This portion of the agenda is to provide an opportunity for Council Members to report on attendance at events, subcommittee meetings, and entities on which the Council Member has been appointed as a liaison and for staff to provide brief updates and/or information to the City Council.

G. CONSENT CALENDAR
All matters listed on the consent calendar are considered routine in nature and will be enacted by one motion. If discussion is required, that particular item will be removed from the consent calendar and will be considered separately.

G.1 Minutes of the City Council/Successor Agency meeting of May 14, 2024 G.2 Minutes of the Special Meeting of May 16, 2024
G.3 A Proclamation Proclaiming June 2024 as Pride Month G.4 A Proclamation Proclaiming June 2024 as National Safety Month G.5 Resolutions for the holding of a general municipal election on Tuesday, November 5, 2024.

Title/Recommendation

1.Adopt a Resolution calling and giving notice of the holding of a general municipal election on Tuesday, November 5, 2024, for the election of one [1] Council Member in District 1, one [1] Council Member in District 3, and one [1] candidate for Mayor to be elected at large, for four-year terms as required by the provisions of the laws of the state of California relating to general law cities; requesting the Contra Costa County Board of Supervisors consolidate a general municipal election to be held on November 5, 2024, pursuant to Elections Code § 10400, et seq.; requesting that the City Clerk file a certified copy of the Resolution with the County Board of Supervisors and the County Election Department.

2.Adopt a Resolution adopting regulations for candidates for elective office pertaining to candidate statements submitted to the voters at the election.

G.6 Investment Policy No. 10-4 and Annual Investment Program Management Delegation.

Title/Recommendation
Adopt a Resolution delegating annual management responsibility for the investment program to the City Treasurer for FY 2024/25.

G.7 Award of contract to DSS Company dba Knife River Construction for the Pavement Management Program 2024 (Asphalt), CIP Project No. 336-31703.

Title/Recommendation
Adopt a Resolution approving the contract documents, waiving an immaterial irregularity, awarding the bid and authorizing the City Manager or designee to execute a contract and necessary documents for the Pavement Management Program 2024 (Asphalt), CIP Project No. 336-31703, (“Project”) with DSS Company dba Knife River Construction as the lowest responsible bidder in the amount of $2,077,240.00, plus funding authorization for a 1% contingency of $20,772.40, for a total funding authorization not to exceed amount of $2,098,012.40.

G.8 Notification of the correction of a clerical error in the Water utility rate schedule.

Title/Recommendation
An informational report notifying the Council that City staff will correct a clerical error to the rate schedule in Attachment A to Resolution No. 2023-75 and file an amended Water Rate Study Report.

H. PUBLIC HEARINGS
Persons addressing the City Council using Zoom are asked to raise their hands using the Zoom feature. Those attending in person and wishing to address the Council may do so from the podium. The Council may adopt reasonable regulations at the onset of the public hearing to facilitate public testimony. These regulations may include time limits. In the absence of such regulations, the public hearing shall follow the protocol for Public Comments.

H.1 Capital Improvement Program (CIP) for 2024/25 – 2028/29 Title/Recommendation
Adopt a resolution adopting the 2024/25 – 2028/29 Capital Improvement Program (CIP).

H.2 Consideration of actions pertaining to the City’s Landscape and Lighting Assessment Districts, including Landscape and Lighting Assessment Districts No. 19-3 and No. 21-1, and the Citywide Park Maintenance District No. 98-1 for Fiscal Year 2024/25.

Title/Recommendation
Adopt a Resolution approving the City of Brentwood’s Landscape & Lighting Assessment Districts, Landscape & Lighting Assessment District No. 19-3, Landscape & Lighting Assessment District No. 21-1, and Citywide Park Maintenance District No. 98-1 Engineer’s Reports for Fiscal Year 2024/25; ordering improvements; confirming the diagram and assessments; levying and collecting assessments; and finding that the above actions are exempt from the California Environmental Quality Act.

I. REQUEST FOR FUTURE AGENDA ITEMS - NEW REQUEST(S)
Council Members wishing to have an agenda item placed on a future agenda shall make a request under this section of the agenda. These items will be included on the agenda for the next Council meeting
J. REQUESTED FUTURE AGENDA ITEM(S)
J.1 Consider a Request from Vice Mayor Meyer related to updating the regular meeting time for the Agricultural Enterprise Committee
Title/Recommendation
That the City Council consider and discuss the request from Vice Mayor Meyer to update the regular meeting time for the Agricultural Enterprise Committee.

K. ADJOURNMENT
Any disclosable public records related to an agenda item for the open session of this meeting distributed to all or a majority of the City Council less than 72 hours before this meeting is available for inspection at City Hall, located at 150 City Park Way, during normal business hours.

These writings will also be available for review at the City Council meeting in the public access binder in the entrance of the City Council Chambers.

Public comments received after 3:00 p.m. of the meeting date, but prior to the start of the meeting, will be emailed to the City Council, posted online at www.brentwoodca.gov/councilmeetingonline within one day following the meeting, and will be summarized in the meeting minutes.

The Closed Captioning provided via Zoom is auto generated. It is not the official record and is provided as a convenience.

If you challenge the any of the matters listed under 'Public Hearings' in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the Brentwood City Council at, or prior to, the public hearing
NOTICE
In compliance with the Americans with Disabilities Act, the meeting room is wheelchair accessible and disabled parking is available at the City Hall parking lot. If you are a person with a disability and you need disability-related modifications or accommodations to participate in this meeting, please contact the City Clerk's Office at (925) 516-5440 or fax (925) 516-5441. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. {28 CFR 35.102-35, 104 ADA Title II}

POSTING STATEMENT
On May 23, 2024, a true and correct copy of this agenda was posted on the City Hall Bulletin Board, outside City Hall, 150 City Park Way, Brentwood, CA 94513 and at our website www.brentwoodca.gov
A complete packet of information is available for public review at City Hall or on our website at www.brentwoodca.gov

1 CITY COUNCIL/SUCCESSOR AGENCY MINUTES
May 14, 2024, 7:00 p.m.

A. CALL TO ORDER & ROLL CALL
Vice Mayor Meyer called the meeting to order at 7:01 p.m.

Roll Call found the following members present: Mendoza, Meyer, Pierson, and Oerlemans. Mayor Bryant was absent.

B. PLEDGE OF ALLEGIANCE
Vice Mayor Meyer led the Pledge of Allegiance.

C. PUBLIC COMMENTS
Vice Mayor Meyer opened the public comment period.

Sinziana Todor provided comments related to remote public comments, basketball hoops in residential neighborhoods, police patrol and enforcement related to Dolphin and Blue Goose parks.

Carolina Villaseca provided comments related to the Community Day of Service and teaching DEI to young children in the classroom.

Paul provided comments related to the Fentanyl and opiates crisis in the country and public education.

Danny Dohrmann provided comments related to remote public comments and freedom of speech.

Jeremy provided comments and concerns related to Dolphin Park.

D. INFORMATIONAL REPORTS FROM COUNCIL MEMBERS, COMMITTEES,

LIAISONS, AND STAFF
Council Member Oerlemans reported on attendance at the Tri Delta Transit meeting, Police Activities League (PAL) Golf Tournament in Discovery Bay, Special City Council meetings, the Unified Prom and parade, and provided special recognition to Amanda Chaney, Stacey Dempsey, Officer Bollinger, Officer Rucker, and Sergeant Brouillette.

Council Member Mendoza reported on attendance as a judge for the Lions Club High School speech contest, League of California Cities Latino Caucus board meetings, Special City Council meetings, and a Mount Diablo Unified School District fundraiser.

Council Member Pierson reported on attendance at the Community Day of Service event, Juneteenth planning meetings, Rotary Club meetings, Special

2 City Council meetings, responding to emails, a meeting with the City Manager, Chief of Police, and Council Member Oerlemans regarding the community's unhoused population, Farmers Market, Commission Appreciation Dinner, League of California Cities division meeting in Alameda, donated tuxedos and gowns to the Unified Prom, and moderated panel of youth regarding getting involved in politics.

Vice Mayor Meyer reported on attendance at the Commissioner Appreciation Dinner, Elected Women's Luncheon, Community Day of Service event, Mayors' Conference, watched the Planning Commission, and attended the City's SAS 99 Consideration of Fraud Audit meeting with Mayor Bryant.

E. CONSENT CALENDAR
Vice Mayor Meyer pulled item E.6 and Council Member Mendoza pulled item E.9 to be considered separate from the Consent Calendar.

Council Member Pierson abstained from voting on item E.12 due to living within 500 feet of the project location.

Moved by: Jovita Mendoza, Council Member
Seconded by: Tony Oerlemans, Council Member
Adopted the Consent Calendar as recommended by staff, excluding items E. 6 and E. 9, and with Council Member Pierson abstaining from the vote on item E.12
Ayes (4): Jovita Mendoza, Council Member, Susannah Meyer, Vice Mayor, Pa'tanisha Pierson, Council Member, and Tony Oerlemans, Council Member Absent (1): Joel Bryant, Mayor
Motion Approved (4 to 0)
E.1 Minutes of the Special City Council meeting of April 23, 2024 E.2 Minutes of the City Council/Successor Agency meeting of April 23, 2024
E.3 Minutes of the Special City Council meeting of April 30, 2024 E.4 A Proclamation Proclaiming May 27, 2024, as Memorial Day E.5 A Proclamation Proclaiming May 13 - 18, 2024, as Armed Forces Week E.6 A Proclamation Proclaiming May 19 - 25, 2024, as Public Works Week Vice Mayor Meyer presented the Public Works Week proclamation to Tony Pastor.

Moved by: Susannah Meyer, Vice Mayor
Seconded by: Pa'tanisha Pierson, Council Member

3 Ayes (4): Jovita Mendoza, Council Member, Susannah Meyer, Vice Mayor, Pa'tanisha Pierson, Council Member, and Tony Oerlemans, Council Member
Absent (1): Joel Bryant, Mayor
Motion Approved (4 to 0)
E.7 Amendment to Council/Administrative Policy No. 30-1 (Appointment of Planning Commission Members) to be consistent with current practices.

Adopted Resolution 2024-46 amending Council/Administrative Policy No. 30-1 (Appointment of Planning Commission Members) to be consistent with current practices.

E.8 Award of Agreement for Architectural Services to Advance Design Consultants, Inc. for the Water and Wastewater Laboratory Project, CIP Project No. 592-59207.

Adopted Resolution 2024-47 approving and authorizing the City Manager or designee to execute an Agreement for Architectural Services with Advance Design Consultants, Inc. (“ADC”) in the amount of $279,330, plus funding authorization for a 15% contingency of $41,899.50, for a total funding authorization not to exceed amount of $321,229.50, for the Water and Wastewater Laboratory Project, CIP Project No. 592-59207 (“Project”).

E.9 Purchase and Sale Agreement with Nunn Family (No.2) Limited Partnership for utility easements to service the Innovation Center @ Brentwood.

Moved by: Jovita Mendoza, Council Member
Seconded by: Pa'tanisha Pierson, Council Member
Adopted Resolution 2024-51 approving and authorizing the City Manager, or designee, in coordination with the City Attorney, to execute an Agreement for Purchase and Sale of Easement Rights, in substantial conformance with the attached Agreement, with Nunn Family (No.2) Limited Partnership, for a portion of APNs 019-081-023 and 019-081-024, to acquire utility easements necessary for CIP Project No. 336-31695, Innovation Center @ Brentwood Infrastructure (“Project”) for $193,904, and authorizing execution of other documents as necessary to complete the right-of-way transaction.

4 Ayes (4): Jovita Mendoza, Council Member, Susannah Meyer, Vice Mayor, Pa'tanisha Pierson, Council Member, and Tony Oerlemans, Council Member
Absent (1): Joel Bryant, Mayor
Motion Approved (4 to 0)
E.10 Purchase and Sale Agreement with Brian Joseph Friedel for road rightof-way for the Lone Tree Way Roadway Improvements, CIP Project No. 336-31701.

Adopted Resolution 2024-48 approving and authorizing the City Manager, or designee, to execute an Agreement for Purchase and Sale of Real Property, with Brian Joseph Friedel for a portion of APN 018- 100-031, to acquire road right-of-way for Lone Tree Way Roadway Improvements, CIP Project No. 336-31701 (“Project”) for $120,203, and authorizing execution of other documents as necessary to complete the right-of-way transaction.

E.11 Purchase and Sale Agreement with Louis A. Ferraro, as Trustee of the Louis A. Ferraro Family Trust dated July 2, 2004 for road right-of-way for the Lone Tree Way Roadway Improvements, CIP 336-31701.

Adopted Resolution 2024-49 approving and authorizing the City Manager, or designee, to execute an Agreement for Purchase and Sale of Real Property with Louis A. Ferraro, as Trustee of the Louis A.

Ferraro Family Trust dated July 2, 2004, for a portion of APN 018-100- 038, to acquire road right-of-way for Lone Tree Way Roadway Improvements, CIP Project No. 336-31701, for $68,303, and authorizing execution of other documents as necessary to complete the right-of-way transaction.

E.12 Award of contract to Ghilotti Bros., Inc. for Lone Tree Way Roadway Improvements (Phase 1), CIP Project No. 336-31701.

Moved by: Jovita Mendoza, Council Member
Seconded by: Tony Oerlemans, Council Member
Adopted Resolution 2024-50 approving the contract documents, awarding the bid and authorizing the City Manager or designee to execute a contract and necessary documents for Lone Tree Way Roadway Improvements (Phase 1), CIP Project No. 336-31701, (“Project”) with Ghilotti Bros., Inc. (“GBI”) as the lowest responsible and responsive bidder in the amount of $2,031,692.30, plus funding authorization for a 15% contingency of $304,753.84, for a total funding authorization not to exceed amount of $2,336,446.14.

5 Ayes (3): Jovita Mendoza, Council Member, Susannah Meyer, Vice Mayor, and Tony Oerlemans, Council Member
Abstained (1): Pa'tanisha Pierson, Council Member
Absent (1): Joel Bryant, Mayor
Motion Approved (3 to 0)
F. BUSINESS ITEMS
F.1 Discuss and provide direction regarding potential modifications to the regulation of outdoor dining and merchandise displays in Downtown Brentwood to ensure an aesthetic, safe, and accessible environment Vice Mayor Meyer opened the public comment period after a staff presentation by Assistant City Manager Darin Gale.

Rebecca Bloomfield and Amy Tilley submitted written public comments by email providing comments and concerns on the item.

Peter Jacoway spoke on behalf of the Downtown Business Coalition and offered collaboration between themselves and the City as these regulations are developed.

Sinziana Todor provided comments and concerns on the item.

Carolina Villaseca provided comments and concerns on the item.

Danny Dohrmann provided comments in support of option B as presented by staff.

Amy Tilley spoke on behalf of the Downtown Business Coalition and reiterated the DBC's desire to be involved in the process with the City as the regulations are developed.

Moved by: Jovita Mendoza, Council Member
Seconded by: Susannah Meyer, Vice Mayor
The City Council, by motion, directed staff to; continue with process to update zoning code and specific plan. Implement insurance requirements through encroachment permit as soon as possible To bring back a future process to include:
• Processing fee
• Cleaning deposit
• Clearly approved area to operate
• Annual Inspections
• Continue to not charge/lease the area to businesses
• Permit revocation process
• Do not allow a business separate their outdoor dining area from their business
• ADA minimum or higher access on the sidewalk (4’ or 5’ and

6 Director’s discretion) strollers, electric scooter, walkers • Bar Seating along fence line (future operators)
• Implementation Process
• Grandfather, not amnesty

Design Specifications to include:
• Location
• Materials
• Heights
• Signage
Ayes (4): Jovita Mendoza, Council Member, Susannah Meyer, Vice Mayor, Pa'tanisha Pierson, Council Member, and Tony Oerlemans, Council Member
Absent (1): Joel Bryant, Mayor
Motion Approved (4 to 0)
G. REQUEST FOR FUTURE AGENDA ITEMS - NEW REQUEST(S)
Vice Mayor Meyer requested a change to the regular meeting time for the Agricultural Enterprise Committee.

H. ADJOURNMENT
It was moved/seconded by Pierson/Mendoza to adjourn at 9:30 p.m. and carried unanimously.

1 SPECIAL CITY COUNCIL MINUTES
May 16, 2024, 8:30 a.m.

A. CALL TO ORDER & ROLL CALL
Mayor Bryant called the meeting to order at 8:30 a.m. and Roll Call found the following members present; Mendoza, Meyer, Pierson, Oerlemans, and Mayor Bryant.

B. PLEDGE OF ALLEGIANCE
Mayor Bryant led the Pledge of Allegiance.

C. PUBLIC COMMENTS
None.

D. RECESS TO CLOSED SESSION
It was moved/seconded by Mendoza/Pierson to adjourn to closed session.

Motion carried unanimous with Mendoza, Meyer, Pierson, Oerlemans, and Mayor Bryant in favor.

D.1 PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT
E. REPORT ON CLOSED SESSION
There was no reportable action
F. ADJOURNMENT
It was moved/seconded by Mendoza/Pierson to adjourn at 11:25 p.m.

PROCLAMATION
WHEREAS, the City of Brentwood has a diverse Lesbian, Gay, Bisexual, Transgender, Questioning (LGBTQ+) community and is committed to supporting visibility, dignity, and equity for all people in the community; and
WHEREAS, many of the residents, students, city employees, and business owners within the City of Brentwood who contribute to the enrichment of our City are a part of the lesbian, gay, bisexual, transgender, and questioning community; and
WHEREAS, various advancements have been made with respect to equitable treatment of lesbian women, gay men, bisexual, transgender, and questioning persons throughout the nation, but there continues to be some opposition against people from this community and around the world making it important for cities like Brentwood to stand up and show support for our residents who are affected; and
WHEREAS, June has become a symbolic month in which lesbian women, gay men, bisexual people, transgender people, and supporters come together in various celebrations of pride.

NOW, THEREFORE, BE IT PROCLAIMED, the City Council of the City of Brentwood does hereby declare the month of June as LGBTQ+ Pride Month
in the City of Brentwood, and invites everyone to reflect on ways we all can live and work together with a commitment to mutual respect and understanding.

Dated this 28th of May 2024

Joel R. Bryant, Mayor

PROCLAMATION
WHEREAS, each year, more than 26 million Americans suffer disabling injuries with 21,168 preventable injury deaths occurring in the state of California alone in 2022; and
WHEREAS, the goal of the National Safety Council is to raise public awareness and seek opportunities to educate Americans about these alarming and preventable mishaps through education; and WHEREAS, through the support and observance of National Safety Month, employers help to reverse the increase in accidental injuries and deaths; and
WHEREAS, the City of Brentwood supports national safety efforts and has taken a pro-active stance in providing a safe and healthy work environment for its employees through the formation of the Central Safety Advisory and Public Works Safety Committees; and WHEREAS, the Central Safety Advisory and Public Works
Safety Committees, under the guidance of the Human Resources Department, work to assure the safety of all City of Brentwood employees by setting and enforcing standards; providing training; outreach, and education; and encouraging continual improvement in workplace safety and health.

THEREFORE, BE IT PROCLAIMED, that the City Council of
the City of Brentwood proclaim June as
National Safety Month
and encourage all employees and citizens to participate in raising their awareness in the practice of safe and healthy behaviors in all aspects of their lives.

Dated this 28th of May 2024

Joel R. Bryant, Mayor

CITY COUNCIL AGENDA ITEM NO. G.5
05/28/2024
SUBJECT: Resolutions for the holding of a general municipal election on Tuesday, November 5, 2024.

DEPARTMENT: City Manager’s Office
STAFF: Tim Ogden, City Manager
Margaret Wimberly, City Clerk

TITLE/RECOMMENDATION

1. Adopt a Resolution calling and giving notice of the holding of a general municipal election on Tuesday, November 5, 2024, for the election of one [1] Council Member in District 1, one [1] Council Member in District 3, and one [1] candidate for Mayor to be elected at large, for four-year terms as required by the provisions of the laws of the state of California relating to general law cities; requesting the Contra Costa County Board of Supervisors consolidate a general municipal election to be held on November 5, 2024, pursuant to Elections Code § 10400, et seq.; requesting that the City Clerk file a certified copy of the Resolution with the County Board of Supervisors and the County Election Department.

2. Adopt a Resolution adopting regulations for candidates for elective office pertaining to candidate statements submitted to the voters at the election.

FISCAL IMPACT
The estimated expense for the November 2024 election will be included in the draft FY 2024/25 – FY 2025/26 Operating Budget being considered for adoption by the City Council on June 25, 2024. Election costs are funded by the General Fund.

The total cost for the November 2022 election was approximately $98,987. The Contra Costa County Elections Division has provided an estimated election cost of $2.50 to $4.00 per registered voter. The City currently has 42,115 registered voters; therefore, the estimated cost to conduct the general municipal election would be within the range of $105,285 to $168,456. Staff has included a budget of $137,000 in the draft FY 2024/25 – FY 2025/26 Operating Budget, representing the mid-range of the estimated election costs. Should the final invoice be greater than the budgeted amount, staff will return to Council to request additional budget.

CITY COUNCIL AGENDA ITEM NO. G.5
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The County Elections Division has provided the cost to print candidate statements.

The cost is based on the number of registered voters for each office: for each candidate for District 1 at $345.00 (9,828 registered voters); District 3 at $405.00 (12,851 registered voters); and for Mayor at $984.00 (42,115 registered voters). An advance deposit of the amount appropriate for each District will be required from each candidate wishing to have their candidate statement printed, and will be reconciled after the election if costs are different.

BACKGROUND
In April 2022, the City Council adopted Ordinance 1035, which completed the redistricting process that adopted a map recommended by the Redistricting Commission and updated the boundaries for all Districts for the City Council elections.

Districts 1 and 3 held their first elections in 2020 under the district map adopted in 2019. Elections in Districts 2 and 4 were held with the 2022.

When adopting the ordinance in 2022 for the redistricting, the ordinance took into account council members who, following the redistricting process, would no longer reside in the district from which they were elected. In such instances, State law does not permit the council member to lose their seat. To ensure continued representation, the ordinance had the subject council member representing the reconstituted district until their term of office ends, and a successor takes office. With the changes to the district boundaries, the Council Member serving in District 1 no longer resides within District 1; therefore, there is not an eligible incumbent in District 1.

This evening there are multiple actions required of the City Council prior to holding the November 5, 2024, General Municipal Election. There are two resolutions accompanying this staff report to document these actions.

The first resolution includes the first step: the Council must call the election.

Next, the Council must consolidate the election with the 2024 Statewide General Election. The Mayor and two Council Members that were elected in Districts 1 and 3, who are currently holding office have terms expiring for offices in 2024. If any of them wish to run for City Council office in 2024, they will need to meet all of the candidate qualifications, including residing in either Districts 1 or 3, or within the City limits for the position of Mayor. This resolution also requires the City to reimburse Contra Costa County for providing election services to the City.

In addition, the resolution sets forth the procedures in the event of a tie and, similar to a recently tied City Council election in Contra Costa County, specifically provides that a tie be decided by lot, which would consist of the tied candidates (or their authorized representatives) rolling a multi-sided die for three rounds. The number on each roll would be recorded after each roll, and after three rounds the candidate with the highest total number would be the successful candidate. Should the City Council

CITY COUNCIL AGENDA ITEM NO. G.5
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decide that a tie should not be decided by lot, a run-off election would need to take place. If a run-off election occurs, the City would be responsible for the run-off election costs, which could be up to $8.00 - $10.00 per registered voter, or $336,920 to $421,150.

Finally, it is recommended that the Council consider a second resolution related to the costs associated with the printing of candidate statements and the payment of candidate statement costs. The publication of a candidate statement is optional, and the cost associated with its printing is the candidate’s responsibility. The cost provided for candidate statements is an estimate:

Office Cost Registered Voters*
Council Member District 1 $345.00 9,828
Council Member District 3 $405.00 12,851
Mayor (at large) $984.00 42,115
*Number of total Registered Voters as of February 22, 2024 Staff will review the actual charges once an invoice is received from the County. In the event of an overpayment by the candidate, the overpaid amount would be refunded; if there is an underpayment by the candidate, staff would bill the additional amount to the candidate.

Publication costs are based on the number of registered voters in each district.

Contra Costa County Elections indicated there are 42,115 registered voters citywide.

The above cost estimates are for a statement that will fit on one-quarter of a standard letter-sized page.

The voter guide contains three languages, English, Spanish, and Chinese. Staff further recommends that the word count for the candidate statements be set at 250 words per statement, which is consistent with the 2022 General Municipal Election. (Under the Elections Code, the City Council may authorize a candidate statement of up to 400 words.)
Should an incumbent not file for a position, the filing period for that position, may be extended five calendar days to August 14, 2024 (see Elections Code Section 10225).

As stated above, the Council Member serving in District 1 no longer resides within District 1; therefore, there is not an eligible incumbent in District 1. When there is no incumbent eligible to be elected, the nomination period extension provided for in Elections Code Section 10225 is not applicable. Therefore, for District 1 nomination period will close on Friday, August 9, 2024, at 5:00 p.m.

Pursuant to Election Code Section 10229(a), should the number of persons nominated for the available seats not exceed the number to be filled at the election, the City Clerk is to submit a certificate with that information to the City Council. The City Council could then proceed with one of the following options: 1) appoint to the

CITY COUNCIL AGENDA ITEM NO. G.5
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office the person who has been nominated; 2) appoint to the office an eligible elector if no one has been nominated (an ‘eligible elector’ is any person who is a resident of Brentwood, is 18 years or older, is a registered voter, and for a district election, resides in the subject district); or 3) hold the election, if either no one or only one person has been nominated for each seat.

The process associated with Election Code Section 10229(a) does not apply if there has been more than one person nominated to another city office which will be elected on a citywide basis, or if there is a city measure to be submitted to the voters at that municipal election.

Under Elections Code Section 10220, the nomination period for candidates will occur during normal business hours between 8:00 a.m. and 5:00 p.m. at the City Clerk’s Office located on the 3rd Floor of City Hall. The nomination period will start on Monday, July 15, 2024, and end on Friday, August 9, 2024 (should an eligible incumbent not file, this period will be extended to August 14, 2024 at 5:00 p.m.).

Appointments are strongly encouraged. Interested parties may contact the City Clerk at [email protected] to set an appointment to pull nomination papers.

CITY COUNCIL STRATEGIC INITIATIVE
Not Applicable.

PREVIOUS ACTION
There is no previous action associated with the 2024 General Municipal Election.

DATE OF NOTICE
Not Applicable.

ENVIRONMENTAL DETERMINATION
Not Applicable.

ALTERNATIVE OPTION(S)
Alternative Options to the Staff Recommendation:

1. Continue the item with direction for staff to return with additional information, but note that a Resolution to consolidate the election must be filed with the County not later than July 6, 2024.

CITY COUNCIL AGENDA ITEM NO. G.5
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ATTACHMENT(S)

1. Resolution Calling the Election, Consenting to the Consolidation of the Election, Providing for Reimbursement of Election Costs, Setting the Candidate Statement Word Limit, Requesting Publication of a Notice of Election, Determining Action to be Taken in the Event of a Tie, and Requesting the City Clerk Forward the Resolution to the County

2. Resolution Adopting the Fee for Candidate Statements

RESOLUTION NO. 2024-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BRENTWOOD, CALIFORNIA CALLING THE ELECTION FOR THE 5th
DAY OF NOVEMBER, 2024, TO ELECT ONE [1] COUNCIL MEMBER
FROM DISTRICT 1; ONE [1] COUNCIL MEMBER FROM DISTRICT
3; AND THE MAYOR AT LARGE; CONSENTING TO THE
CONSOLIDATION OF THE ELECTION; PROVIDING FOR

REIMBURSEMENT TO CONTRA COSTA COUNTY FOR ALL COSTS
ASSOCIATED WITH THE CONSOLIDATION OF THE ELECTION;
SETTING THE WORD LIMIT FOR STATEMENTS OF CANDIDACY;

REQUESTING THAT THE CITY CLERK PUBLISH A NOTICE OF
ELECTION; DETERMINING THE ACTION TO BE TAKEN IN THE
EVENT OF A TIE; AND REQUESTING THE CITY CLERK TO

FORWARD THIS RESOLUTION TO THE REGISTRAR OF VOTERS
WHEREAS, the City Council of the City of Brentwood ordered a General Municipal Election to be held on Tuesday, November 5, 2024, for the purpose of the election one Council Member from District 1, one Council Member from District 3, one Mayor at large; and
WHEREAS, it is desirable that the General Municipal Election be consolidated with the Statewide General Election to be held on the same date and that within the City the precincts, polling places and election officers of the two elections be the same; that the Election Department of the County of Contra Costa canvass the returns of the General Municipal Election; and that the election be held in all respects as if there were only one election pursuant to Elections Code Section 10002, et seq.; and
WHEREAS, upon presentation of a bill to the City by the County Elections Official, Elections Code Section 10002 requires the City to reimburse the County in full for the election services performed; and
WHEREAS, Elections Code Section 13307 requires that before the nominating period opens, the governing body must determine whether a charge will be levied against each candidate submitting a candidate’s statement to be sent to the voters; and may estimate the cost; and determine whether the estimate must be paid in advance; and
WHEREAS, Elections Code Section 12101 requires the publication of a notice of the election once in a newspaper of general circulation in the City; and WHEREAS, if a run-off election were necessary, it may require a stand-alone election and could cost up to $8.00 - $10.00 per registered voter with the City bearing the total cost; therefore, the resolution of tie votes will be determined by lot unless the City Council adopts the provisions of Election Code section 15651, et seq. which establishes the procedures to resolve a tie vote prior to the conduct of the election resulting in the tie vote; and

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Brentwood does declare, determine, request, and order as follows regarding the election to be held on November 5, 2024, for the purposes of electing members to the City Council of the City of Brentwood:

1. The election will be held on Tuesday, the 5
th day of November 2024. The
purpose of the election is to fill the following offices:

Council Member District 1 Four Year Term
Council Member District 3 Four Year Term
Mayor At Large Four Year Term

2. This City Council hereby requests and consents to the consolidation of this election with other elections that may be held in whole or in part of the territory of the City as provided in Elections Code Section 10002, et seq.

3. The City will reimburse the County for actual costs incurred in conducting the election upon receipt of a bill stating the amount due as determined by the elections official.

4. The Candidate’s statement will be limited to 250 words. As a condition of having the Candidate’s statement published, the candidate will pay the cost at the time of filing.

5. The City Clerk is requested to publish the Notice of Election in The Brentwood Press, which is a newspaper of general circulation that is published in the City.

6. The City Council has determined that the action to be taken in the event of a tie vote is as follows: That should a tie vote occur from the election, tie votes will be determined by lot, which would consist of the tied candidates (or their authorized representatives) rolling a multi-sided die for three rounds. The number on each roll would be recorded after each roll, and after three rounds the candidate with the highest total number would be the successful candidate.

7. The City Council requests that the City Clerk forward a certified copy of this Resolution to the Registrar of Voters and to the Board of Supervisors of Contra Costa County.

8. The Nomination period will commence on July 15, 2024, through August 9 2024; and nomination papers will be issued and filed during regular business hours, Monday through Friday, 8:00 a.m. to 5:00 p.m. in the City Clerk’s office on the 3rd Floor of City Hall at 150 City Park Way.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at regular meeting held on the 28th day of May 2024 by the following vote:

RESOLUTION NO. 2024-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BRENTWOOD, CALIFORNIA, ADOPTING REGULATIONS FOR

CANDIDATES FOR ELECTIVE OFFICE PERTAINING TO

CANDIDATE STATEMENTS SUBMITTED TO THE VOTERS AT AN
ELECTION; AND REPEALING RESOLUTION NO. 2022-72
WHEREAS, Section 13307 of the Elections Code of the State of California provides that the governing body of any local agency adopt regulations pertaining to materials prepared by any candidate for the municipal election, including costs of the candidate’s statement; and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Brentwood does declare, determine, and order as follows:

1. That pursuant to Section 13307 of the Elections Code of the State of California, each candidate for elective office to be voted for at an election to be held in the City of Brentwood may prepare a candidate’s statement on an appropriate form provided by the City Clerk. The statement may include the name, age and occupation of the candidate and a brief description of no more than 250 words of the candidate’s education and qualifications expressed by the candidate himself or herself. The statement will not include party affiliation of the candidate, nor membership or activity in partisan political organizations.

2. Pursuant to the Voting Rights Act of 1965 (the “Act”) and State law, the City is required to translate candidate statements into Spanish and Chinese. The City Clerk is requested to have all candidate statements translated into Spanish and Chinese and printed in the voter’s pamphlet.

3. The candidate will be required to pay for the cost of printing the candidate’s statements in English, Spanish, and Chinese. The Contra Costa County Clerk – Recorder - Elections Department has provided a cost for the handling, translating, and mailing of the candidate’s statements filed pursuant to this section including costs incurred as a result of complying with the Act (as amended), and requires each candidate filing a statement to pay in advance to the local agency his or her pro rata share as a condition of having his or her statement included in the voter’s pamphlet.

4. Candidates will be required to make a payment, which will be submitted to the City Clerk at the time the candidate’s statement is filed. The City is providing an estimate of the charges. Once an invoice is received from the County, the actual costs will be determined. In the event of an overpayment by the candidate, the overpaid amount would be refunded; if there is an underpayment by the candidate, staff would bill the additional amount to the candidate. The payment will apply against the estimated cost of producing the candidate’s statement and voter pamphlet the costs are:

Office Cost
Council Member District 1 $345.00
Council Member District 3 $405.00
Mayor (at large) $984.00

5. That Resolution 2022-72 establishing City Council policy on payment for candidate’s statements is repealed.

6. That this resolution will apply to the municipal election to be held on November 5, 2024.

7. That in all particulars not recited in this resolution related to candidate statements will be handled as provided by local, state, and federal law for holding municipal elections.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at regular meeting held on the 28th day of May 2024 by the following vote:

CITY COUNCIL AGENDA ITEM NO. G.6
05/28/2024
SUBJECT: Investment Policy No. 10-4 and Annual Investment Program Management Delegation.

DEPARTMENT: Finance and Information Systems
STAFF: Kerry Breen, Director of Finance and Information Systems Clarissa Domen, Accountant II
Sonia Agostini, Accounting Manager

TITLE/RECOMMENDATION
Adopt a Resolution delegating annual management responsibility for the investment program to the City Treasurer for FY 2024/25.

FISCAL IMPACT
There is no fiscal impact associated with tonight’s recommended action. The City’s current managed investment portfolio totals approximately $220 million, with an additional $110 million in short term liquidity pools earning approximately 5.4% annual interest.

BACKGROUND
Council/Administrative Policy No 10-4, Investment Policy (“Policy”), provides the City Council authority to delegate investment program management to the City Treasurer on an annual basis. Section 14 of the City’s Policy requires 1) an annual review of the Policy by the City Council at a public meeting and 2) any changes to the Policy be considered by City Council also at a public meeting. Section 5 of the Policy delegates investment management responsibility to the City Treasurer/Director of Finance and Information Systems for a one-year period and requires this responsibility to be renewed annually.

Staff reviewed the City’s Policy and does not have any recommended changes for consideration. The City’s investment management firm, PFM Asset Management LLC (“PFM”), also reviewed the policy and determined the City is in compliance with applicable sections of the California Government Code regulating the investment of public funds. As such, there are no recommended changes to the Policy.

CITY COUNCIL STRATEGIC INITIATIVE
Not Applicable.

CITY COUNCIL AGENDA ITEM NO. G.6
05/28/2024

PREVIOUS ACTION
See attachment 1 – Previous Action

DATE OF NOTICE
Not Applicable.

ENVIRONMENTAL DETERMINATION
Not Applicable.

ALTERNATIVE OPTION(S)
Alternative Options to the Staff Recommendation:

1. Modify staff’s recommendation based on City Council direction.

2. Continue item with direction for staff to return with additional information.

ATTACHMENT(S)

1. Previous Action

2. Resolution

3. EXHIBIT A – Council/Administrative Policy No. 10-4, Investment Policy

ATTACHMENT “1”
Previous actions related to this agenda item that were taken by the Council are listed below. To view prior actions and materials, and Brentwood Municipal Code references in the staff report, as applicable:
 Visit www.brentwoodca.gov/meetings, and select the meeting date(s) desired to see the reference materials and videos.
 Visit www.brentwoodca.gov/municipalcode to research references to the Brentwood Municipal Code and search by the code section(s) cited.

On May 23, 2023, the City Council approved Resolution 2023-59 delegating management responsibility for the investment program to the City Treasurer.

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BRENTWOOD DELEGATING ANNUAL MANAGEMENT

RESPONSIBILITY FOR THE INVESTMENT PROGRAM TO THE CITY
TREASURER FOR FISCAL YEAR 2024/25 AND CONSIDERATION
OF COUNCIL/ADMINISTRATIVE POLICY NO. 10-4, INVESTMENT
POLICY
WHEREAS, the Council/Administrative Policy No. 10-4, Investment Policy (“Policy”) requires an annual review by the City Council at a public meeting; and WHEREAS, the Policy requires that management responsibility for the investment program be delegated on an annual basis; and WHEREAS, the Policy has been reviewed by the City’s external investment management firm; and
WHEREAS, the Policy is in compliance with all applicable California Government Code provisions regulating the investment of public funds.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood reviewed and considered the Policy, and hereby delegates annual management responsibility for the investment program to the City Treasurer for Fiscal Year 2024/25 in the manner set forth in the attached Exhibit A.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 28th day of May 2024 by the following vote:

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

TABLE OF CONTENTS
Section Page

1. Introduction .......................................................................................................................... 2

2. Scope................................................................................................................................... 2

3. Prudence ............................................................................................................................. 2

4. Objectives ............................................................................................................................ 2

4.1 Safety ...................................................................................................................... 2

4.2 Liquidity ................................................................................................................... 2

4.3 Return on Investment .............................................................................................. 2

5. Delegation of Authority......................................................................................................... 2

6. Ethics and Conflict of Interest............................................................................................... 3

7. Permitted Investment Instruments........................................................................................ 3

7.1 U.S. Treasuries........................................................................................................ 3

7.2 U.S. Agency Obligations.......................................................................................... 3

7.3 California State & Local Agency Obligations ............................................................ 3

7.4 Other State Obligations............................................................................................ 3

7.5 Repurchase Agreements ......................................................................................... 4

7.6 Reverse Repurchase Agreements ........................................................................... 4

7.7 Bankers’ Acceptances ............................................................................................. 5

7.8 Commercial Paper................................................................................................... 5

7.9 Medium-Term Notes................................................................................................ 5

7.10 Time Deposits......................................................................................................... 6

7.11 Negotiable Certificates of Deposit........................................................................... 6

7.12 State of California’s Local Agency Investment Fund ............................................... 6

7.13 Insured Savings Account ........................................................................................ 6

7.14 Local Government Investment Pools...................................................................... 6

7.15 Money Market Funds .............................................................................................. 6

7.16 Supranationals..................................................................................................................7

7.17 Asset-Backed Securities .......................................................................................... 7

8. Prohibited Investments......................................................................................................... 7

9. Maximum Maturity................................................................................................................ 7

10. Reporting Requirements ...................................................................................................... 8

11. Internal Controls................................................................................................................... 8

12. Performance Standards........................................................................................................ 8

13. Safekeeping and Custody .................................................................................................... 8

14. Annual Review of Policy....................................................................................................... 8

15. Glossary of Terms .............................................................................................. 9

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

1. Introduction
The purpose of this document is to identify various policies and procedures that enhance opportunities for a prudent and systematic investment policy and to organize and formalize investment-related activities.

The investment policies and practices of the City of Brentwood are based on state law and prudent money management. All funds will be invested in accordance with the City of Brentwood's Investment Policy, and California Government Code Sections 53601 and 53646. The investment of bond proceeds will be governed by the provisions of relevant bond documents.

2. Scope
It is intended that this policy cover all funds (except bond proceeds and retirement funds) and investment activities under the direction of the Brentwood City Council.

3. Prudence
The Treasurer and City Council are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the City, that a prudent person acting in a like capacity and having familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the City.

4. Objectives
The primary objectives, in priority order, of the investment activities of the City of Brentwood shall be:

4.1 Safety. Safety of principal is the foremost objective of the investment program.

Investments of the City of Brentwood shall be undertaken in a manner that seeks to ensure preservation of capital in the portfolio.

4.2 Liquidity. The investment portfolio of the City of Brentwood will remain sufficiently liquid to enable the City to meet its cash flow requirements.

4.3 Return On Investment. The investment portfolio of the City of Brentwood shall be designed with the objective of attaining a market rate of return on its investments consistent with the constraints imposed by its safety objective and cash flow considerations.

5. Delegation of Authority
The management responsibility for the investment program is hereby delegated to the Treasurer for a one-year period, subject to review and renewable annually. The Treasurer shall monitor and review all investments for consistency with this investment

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

policy. No person may engage in an investment transaction except as provided under the limits of this policy. The Treasurer may delegate its investment decision making and execution authority to an investment advisor. The advisor shall follow the policy and such other written instructions as are provided.

6. Ethics and Conflict of Interest
Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.

7. Permitted Investment Instruments
The City shall limit investments in any one non-government issuer, except investment pools, to no more than 5% regardless of security type.

7.1 U.S. Treasuries: United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

7.2 U.S. Agency Obligations: Federal agency or United States government- sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

7.2.1 Any mortgage pass through security issued and guaranteed by a Federal Agency with a maximum final maturity of five years, provided that these securities are rated in a rating category of “AA”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a nationally recognized statistical rating organization (“NRSRO”). Purchase of securities authorized by this subdivision may not exceed 20 percent of the City's investment portfolio.

7.3 California State & Local Agency Obligations: Obligations of the State of California or any local agency within the state, including bonds payable solely out of revenues from a revenue-producing property owned, controlled or operated by the state or any local agency or by a department, board, agency, or authority of the state or any local agency provided that these securities are rated in a rating category of “A”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO. Purchase of securities authorized by this subdivision when combined with purchases authorized by subdivision 7.4 may not exceed 30 percent of the City’s investment portfolio.

7.4 Other State Obligations: Registered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

States, in addition to California, provided that these securities are rated in a rating category of “A”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO. Purchase of securities authorized by this subdivision when combined with purchases authorized by subdivision 7.3 may not exceed 30 percent of the City’s investment portfolio.

7.5 Repurchase Agreements: Repurchase Agreements used solely as short-term investments not to exceed 90 days.

The following collateral restrictions will be observed: Only U.S. Treasury securities or Federal Agency securities as described in 7.1 and 7.2 will be acceptable collateral. All securities underlying Repurchase Agreements must be delivered to the City's custodian bank versus payment or be handled under a tri-party repurchase agreement. The total of all collateral for each Repurchase Agreement must equal or exceed, on the basis of market value plus accrued interest, 102 percent of the total dollar value of the money invested by the City of Brentwood for the term of the investment.

For any Repurchase Agreement with a term of more than one day, the value of the underlying securities must be reviewed on a regular basis, but no less frequently than quarterly. Market value must also be calculated each time there is a substitution of collateral. Any deficiency in the market valuation of the underlying securities must be made up no later than the business day following the valuation.

The City of Brentwood or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to Repurchase Agreement.

The City of Brentwood may enter into Repurchase Agreements with (1) primary dealers in U.S. Government securities who are eligible to transact business with, and who report to, the Federal Reserve Bank of New York, and (2) California and nonCalifornia banking institutions having assets in excess of $1 billion and in the highest short-term rating category as provided by a NRSRO.

The City of Brentwood will have specific written agreements with each firm with which it enters into Repurchase Agreements.

7.6 Reverse Repurchase Agreements: Reverse repurchase agreements will not be allowed without the prior approval of the City Council. If a reverse repurchase agreement is approved, the following guidelines will be applied: The City may invest in reverse repurchase agreements only with "primary dealers" with which the City has entered into a master repurchase agreement contract. The City may invest in reverse repurchase agreements with the following conditions: The City may only use reverse repurchase agreements to (1) cover a temporary cash shortage, or (2) augment earnings. Reverse repurchase agreements may not be used to leverage the portfolio.

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

In addition, if a reverse repurchase agreement is authorized, it may be utilized only if the security to be sold on reverse repurchase agreement has been owned and fully paid for by the City for a minimum of 30 days prior to the sale; the total of all reverse repurchase agreements on investments owned by the City does not exceed 20% of the City’s investment portfolio; and the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of the security using a reverse repurchase agreement and the final maturity date of the same security.

The proceeds of the reverse repurchase agreement may not be invested in securities whose maturity exceeds the term of the Reverse Repurchase Agreement.

7.7 Bankers' Acceptances: Bankers' Acceptances issued by domestic or foreign banks, which are eligible for purchase by the Federal Reserve System, provided that these securities are rated in the highest short-term rating category by a NRSRO. Bankers’ Acceptances may not exceed 180 days maturity. Purchase of securities authorized by this subdivision may not exceed 40 percent of the City of Brentwood's investment portfolio.

7.8 Commercial Paper: Commercial paper of “prime” quality of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph (1) or paragraph (2):
(1) The entity meets the following criteria: (A) Is organized and operating in the United States as a general corporation. (B) Has total assets in excess of five hundred million dollars ($500,000,000). (C) Has debt other than commercial paper, if any, that is rated in a rating category of “A”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO.
(2) The entity meets the following criteria: (A) Is organized within the United States as a special purpose corporation, trust, or limited liability company. (B) Has program wide credit enhancements, including, but not limited to, over collateralization, letters of credit or a surety bond. (C) Has commercial paper that is rated in a rating category of “A-1” or higher, or the equivalent, by a NRSRO.

Eligible commercial paper shall have a maximum maturity of 270 days or less.

The City shall be subject to the following concentration limits:
(1) Effective until January 1, 2026, no more than 40 percent of the City‘s money may be invested in eligible commercial paper.
(2) After January 1, 2026, no more than 25 percent of the City’s money may be invested in eligible commercial paper.

7.9 Medium-Term Notes: Medium-term corporate notes defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

States or by depository institutions licensed by the U.S. or any state and operating within the U.S. Medium-term notes shall be rated in a rating category of “A”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO. Purchase of medium-term corporate notes may not exceed 30 percent of the City's investment portfolio.

7.10 Time Deposits: FDIC insured or fully collateralized time certificates of deposit in financial institutions located in California, including U.S. branches of foreign banks licensed to do business in California. All time deposits must be collateralized in accordance with the California Government Code section 53652. Purchase of time deposits shall not exceed 25% of the City's investment portfolio.

7.11 Negotiable Certificates of Deposit: Negotiable certificates of deposit or deposit notes issued by a nationally or state-chartered bank or a state or federal association as defined in Section 5102 of the Financial Code or by a state-licensed branch of a foreign bank; provided that the senior debt obligations of the issuing institution are rated in a rating category of “A” long-term or “A-1” short-term, the equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO. Purchase of negotiable certificates of deposit may not exceed 30 percent of the City of Brentwood's investment portfolio.

7.12 State of California's Local Agency Investment Fund: The City may invest in the Local Agency Investment Fund (LAIF) established by the State Treasurer for the benefit of local agencies. The City may invest up to the maximum deposit limit per account as permitted by the LAIF Investment Advisory Board. The LAIF portfolio should be reviewed periodically.

7.13 Insured Savings Account

7.14 Local Government Investment Pools:

Shares of beneficial interest issued by a joint powers authority organized pursuant to California Government Code Section 6509.7 that invests in the securities and obligations authorized in California Government Code Section 53601 subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria: (1) The adviser is registered or exempt from registration with the Securities and Exchange Commission. (2) The adviser has not less than five years of experience investing in the securities and obligations authorized in California Government Code Section 53601 subdivisions (a) to (q), inclusive. (3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

7.15 Money Market Funds: Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S. C. Sec. 80a-1, et seq.). The company must have met either of the following criteria: (1) attained the highest ranking letter and numerical rating provided by not less than two NRSROs or (2) have an investment advisor registered with the Securities and Exchange Commission with not less than five years' experience managing money market mutual funds with assets under management in excess of $500,000,000.

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

The purchase price of shares shall not exceed 15 percent of the investment portfolio of the City of Brentwood.

7.16 Supranationals: United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, with a maximum remaining maturity of five years or less and eligible for purchase and sale within the United States. Supranationals shall be rated in the rating category of “AA”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO. Purchases of supranationals may not exceed 30% of the City's investment portfolio.

7.17 Asset-Backed Securities: Mortgage pass-through securities, collateralized mortgage obligations, mortgage-backed or other pay-through bonds, equipment lease-backed certificates, consumer receivable pass-through certificates, and consumer receivable-backed bonds. Securities eligible for investment under this subdivision shall be rated in a rating category of “AA”, its equivalent or higher (without regard to any gradations within such categories by numerical qualifier or otherwise) by a NRSRO and have a maximum remaining maturity of five years or less. Purchases of asset-backed securities may not exceed 20% of the City's investment portfolio.

Credit criteria listed in this section refers to the credit of the issuing organization at the time the security is purchased. The maximum percentage limitations apply at the time of purchase.

A security purchased in accordance with this section shall not have a forward settlement date exceeding 45 days from the time of investment.

8. Prohibited Investments
The City may only invest in those obligations authorized by this policy and shall not invest any funds in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages, or in any security that could result in zero interest accrual if held to maturity.

Notwithstanding the prohibition in the above paragraph, the City may invest in securities issued by, or backed by, the United States government that could result in zero - or negative - interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. The City may hold these instruments until their maturity dates. This paragraph shall remain in effect only until January 1, 2026, and as of that date is repealed.

9. Maximum Maturity
Investment maturities shall be based on a review of cash flow forecasts. Maturities will be scheduled so as to permit the City of Brentwood to meet all projected obligations.

Unless otherwise noted within this investment policy, the City may not invest in a security that exceeds five (5) years from the date of purchase. For purposes of compliance with this Policy, an investment’s term or remaining maturity shall be measured from the settlement date to final maturity. Page 32 of 756

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A

10. Reporting Requirements
The City Treasurer or outside Investment Advisor shall generate and present to the Brentwood City Council monthly reports for accounting and management purposes.

Required elements of this report will include:
 Description of investment instrument
 Interest rate or yield to maturity
 Purchase date
 Maturity date
 Purchase price
 Par value
 Current market value as of the date of the report and the source of this valuation
 Overall portfolio yield based on cost
 List of all transactions during the past month
On a quarterly basis, within 45 days following the end of the quarter, a quarterly report will be prepared and rendered to the Brentwood City Council. This report will provide data similar to the monthly data as well as any narrative necessary for clarification. Also, the quarterly report shall state compliance of the portfolio to the statement of investment policy, or manner in which the portfolio is not in compliance. In addition, the City Treasurer will include in this report a statement denoting the ability of the City to meet its expenditure requirements for the next six months, or provide an explanation as to why sufficient money shall, or may not, be available.

11. Internal Controls
The City Treasurer/Director of Finance and Information Systems is responsible for establishing and maintaining an internal control structure designed to ensure the assets of the City are protected from loss, theft, fraud or misuse.

12. Performance Standards
The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs. The City will measure the portfolio’s performance against a market benchmark that is commensurate with the City’s investment risk constraints and the cash flow characteristics of the portfolio.

13. Safekeeping and Custody
The assets of the City of Brentwood shall be secured through the third-party custody and safekeeping procedures. Bearer instruments shall be held only through third-party institutions. Collateralized securities such as repurchase agreements shall be purchased using the delivery vs. payment procedure.

14. Annual Review of Policy
The Treasurer shall annually render to the City Council this Investment Policy, which shall be considered at a public meeting. Any changes in the policy shall also be considered by the City Council at a public meeting.

Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A

15. Glossary of Terms

15.1 Glossary: Except as otherwise provided in this policy, whenever the words defined or described in the Glossary attached to this policy are used in this policy, they shall have the same meaning attributed to them in the Glossary. However if there is a conflict between a definition contained in the Glossary and a definition of those same words in Sections 53600 et. seq. of the Government Code, the definition in the Government Code shall govern.

GLOSSARY OF TERMS
ACCRUED INTEREST: Interest that is due on a bond or other fixed income security since the last interest payment was made. This often occurs for bonds purchased on the secondary market, since bonds usually pay interest every six months, but the interest is accrued by the bondholders on a day-to-day basis. When a bond is sold, the buyer pays the seller the market price plus the accrued interest, for which the buyer will be reimbursed when the issuer next pays interest.

Accrued interest is calculated on a 30-day month/360-day year for corporate bonds and municipal bonds, and on actual-calendar-days for Government bonds. Income bonds and bonds in default trade without accrued interest. When calculating accrued interest on a bond that is being sold, it is conventional to consider the time period from the most recent payment up to, but not including, the date on which the bond sale is settled.

AGENCIES: Federal agency securities and/or Government-sponsored enterprises.

ASSET-BACKED SECURITIES: Bonds created from various types of consumer debt. Returns on these securities come from customer payments on their outstanding loans. The primary types of asset-backed securities are mortgages, home equity loans, auto loans, leases, credit card receivables and student loans.

BANKERS’ ACCEPTANCE: A draft or bill or exchange accepted by a bank or trust company.

The accepting institution guarantees payment of the bill, as well as the insurer.

BOND: A certificate of debt that is issued by a government or corporation in order to raise money with a promise to pay a specified sum of money at a fixed time in the future and carrying interest at a fixed rate. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). The main types of bonds are corporate bond, municipal bond, treasury bond, treasury note, treasury bill, and zero-coupon bond. It is a tradable debt instrument that might be sold at, above or below par (the amount paid out at maturity), and are rated by bond rating services such as Standard & Poor's and Moody's Investors Service, to specify likelihood of default. The Federal government, states, cities, corporations, and many other types of institutions sell bonds. It is relatively more secured than equity and has priority over shareholders if the company becomes insolvent and its assets are distributed.

Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

COLLATERAL: Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

COMMERCIAL PAPER: An unsecured obligation issued by a corporation or bank to finance its short-term credit needs, such as accounts receivable and inventory. Maturities typically range from 2 to 270 days. Commercial paper is available in a wide range of denominations, can be either discounted or interest-bearing, and usually have a limited or nonexistent secondary market. Commercial paper is usually issued by companies with high credit ratings, meaning that the investment is almost always relatively low risk.

CUSTODIAN: An agent, bank, trust company, or other organization which holds and safeguards an individual's, mutual funds, or investment company's assets for them.

DELEGATION OF AUTHORITY: Management responsibility for the investment program.

DEPOSITORY INSTITUTION: A central repository through which members electronically transfer stock and bond certificates (a clearinghouse facility).

FDIC: Federal Deposit Insurance Corporation. A federal agency that insures bank deposits to a specified amount.

FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.

INTEREST RATE: Interest per year divided by principal amount, expressed as a percentage.

INVESTMENT: The utilization of monies, not immediately needed to pay demands, by investing these surplus funds in accordance with the three objectives of safety first and foremost, followed by liquidity then yield.

INVESTMENT ADVISOR: A person or organization employed by an individual or mutual fund to manage assets or provide investment advice.

LAIF: Local Agency Investment Fund – The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment.

LETTERS OF CREDIT: A document issued by a bank which guarantees the payment of a customer's drafts for a specified period and up to a specified amount.

LIMITED LIABILITY COMPANY: LLC. A type of company whose owners and managers receive the limited liability and (usually) tax benefits of an S Corporation without having to conform to the S Corporation restrictions.

LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

between bid and asked prices is narrow and sales of reasonable size can be done at those quotes.

MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.

MARKETABLE SECURITIES: Securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly.

MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.

MOODY’S: One of the most prominent credit rating agencies in the U.S.

MUTUAL FUNDS: An open-ended fund operated by an investment company which raises money from shareholders and invests in a group of assets, in accordance with a stated set of objectives. Mutual funds raise money by selling shares of the fund to the public, much like any other type of company can sell stock in itself to the public. Mutual funds then take the money they receive from the sale of their shares (along with any money made from previous investments) and use it to purchase various investment vehicles, such as stocks, bonds and money market instruments. In return for the money they give to the fund when purchasing shares, shareholders receive an equity position in the fund and, in effect, in each of its underlying securities. For most mutual funds, shareholders are free to sell their shares at any time, although the price of a share in a mutual fund will fluctuate daily.

NEGOTIABLE CERTIFICATES OF DEPOSIT: A CD with a very large denomination, usually $1 million or more. These are usually bought by institutional investors who are interested in low-risk investments. Negotiable certificates of deposit are usually in bearer form, and have secondary markets that are highly liquid.

NRSRO: Nationally recognized statistical rating organization.

PAR VALUE: The nominal dollar amount assigned to a security by the issuer. For an equity security, par value is usually a very small amount that bears no relationship to its market price, except for preferred stock, in which case par value is used to calculate dividend payments. For a debt security, par value is the amount repaid to the investor when the bond matures (usually, corporate bonds have a par value of $1,000, municipal bonds $5,000, and federal bonds $10,000). In the secondary market, a bond's price fluctuates with interest rates. If interest rates are higher than the coupon rate on a bond, the bond will be sold below par value (at a "discount").

If interest rates have fallen, the bond will be sold above par value.

PASS THROUGH SECURITY: A security representing pooled debt obligations that passes income from debtors to its shareholders. The most common type is the mortgage-backed certificate.

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

PORTFOLIO: Collection of securities held by an investor.

PRIMARY DEALERS: A designation given by the Federal Reserve System to commercial banks or broker/dealers who meet specific criteria, including capital requirements and participation in Treasury auctions.

PROMISSORY NOTES: A document signed by a borrower promising to repay a loan under agreed-upon terms.

REPURCHASE AGREEMENTS: A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security “buyer” in effect lends the “seller” money for the period of the agreement and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions.

RETURN ON INVESTMENT: ROI. A measure of a corporation's profitability, equal to a fiscal year's income divided by common stock and preferred stock equity plus long-term debt. ROI measures how effectively the firm uses its capital to generate profit; the higher the ROI, the better.

REVERSE REPURCHASE AGREEMENTS: A purchase of securities with an agreement to resell them at a higher price at a specific future date. This is a way to borrow money and allow the securities to be held as collateral. Reverse repurchases occur most often in government securities, and often also in other securities that are highly valued and thus considered a good source of collateral.

SECURITIES: Investment instruments, other than insurance policies or fixed annuities, issued by a corporation, government, or other organization which offers evidence of debt or equity. The official definition, from the Securities Exchange Act of 1934, is: "Any note, stock, treasury stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral royalty or lease, any collateral trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or in general, any instrument commonly known as a 'security'; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, or warrant or right to subscribe to or purchase, any of the foregoing; but shall not include currency or any note, draft, bill of exchange, or banker's acceptance which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited." SEC: Securities and Exchange Commission – Agency created by Congress to protect investors in securities transactions by administering securities legislation.

COUNCIL/ADMINISTRATIVE POLICY

EXHIBIT A
Subject:

INVESTMENT POLICY
Policy No: 10-4 Date: May 23, 2023
Resolution No.
2023-59

SPECIAL PURPOSE CORPORATION: A business interest formed solely in order to accomplish some specific task or tasks. A business may utilize a special purpose entity for accounting purposes, but these transactions must still adhere to certain regulations.

SUPRANATIONALS: International financial institutions that are generally established by agreements among nations, with member nations contributing capital and participating in management. Supranational bonds finance economic and infrastructure development and support environmental protection, poverty reduction, and renewable energy around the globe.

SURETY BOND: A bond issued by an entity on behalf of a second party, guaranteeing that the second party will fulfill an obligation or series of obligations to a third party. In the event that the obligations are not met, the third party will recover its losses via the bond.

TIME DEPOSITS: Savings account or CD held in a financial institution, usually a bank, for a fixed term or with the understanding that the customer can withdraw only by giving advanced notice.

TRANSACTIONS: An agreement between a buyer and a seller to exchange an asset for payment. In accounting, any event or condition recorded in the book of accounts.

TRUST: A legal arrangement in which an individual (the trustor) gives fiduciary control of property to a person or institution (the trustee) for the benefit of beneficiaries.

TRUSTEE: An individual or organization which holds or manages and invests assets for the benefit of another. The trustee is legally obliged to make all trust-related decisions with the trustee's interests in mind, and may be liable for damages in the event of not doing so.

Trustees may be entitled to a payment for their services, if specified in the trust deed. In the specific case of the bond market, a trustee administers a bond issue for a borrower, and ensures that the issuer meets all the terms and conditions associated with the borrowing.

UNIFORM COMMERCIAL CODE: UCC. Set of laws regulating commercial transactions, especially ones involving the sale of goods and secured transactions.

U.S. TREASURY: The department of the U.S. government that issues Treasury securities.

YIELD: The rate of annual income return on an investment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

CITY COUNCIL AGENDA ITEM NO. G.7
05/28/2024
SUBJECT: Award of contract to DSS Company dba Knife River Construction for the Pavement Management Program 2024 (Asphalt), CIP Project No. 336-31703.

DEPARTMENT: Engineering
STAFF: Allen Baquilar, Director of Engineering/City Engineer Brant Wilson, Senior Associate Engineer
Renee Payette, Project Services Specialist

TITLE/RECOMMENDATION
Adopt a Resolution approving the contract documents, waiving an immaterial irregularity, awarding the bid and authorizing the City Manager or designee to execute a contract and necessary documents for the Pavement Management Program 2024 (Asphalt), CIP Project No. 336-31703, (“Project”) with DSS Company dba Knife River Construction as the lowest responsible bidder in the amount of $2,077,240.00, plus funding authorization for a 1% contingency of $20,772.40, for a total funding authorization not to exceed amount of $2,098,012.40.

FISCAL IMPACT
The total bid amount is $2,077,240.00, plus funding authorization for a 1% contingency of $20,772.40, for a total funding authorization of $2,098,012.40. The funds for this Project are included in the 2023/24-2027/28 Capital Improvement Program. The Project is funded by the General Fund and Road Maintenance and Rehabilitation Account (RMRA) Funds.

Typically, contingency amounts for similar projects range from 10-15%, however, staff is only requesting a 1% contingency of $20,772.40 to stay within the approved funding for the Project. Generally, contingency is requested based on the project scope of work and provides funding for unforeseen conditions. Staff will closely monitor quantities to ensure the Project does not exceed the total authorization.

CITY COUNCIL AGENDA ITEM NO. G.7
05/28/2024

BACKGROUND
This Project is scheduled to repair several manholes throughout the City and surface the following locations:
 Full depth reconstruction of Redhaven Street, near Sellers Avenue.  Grind and overlay on Brentwood Blvd. from Hanson Lane to Lone Tree Way; Cloverleaf Circle; Sellers Avenue from Balfour Road to Chestnut Street; and Sunset Road from Brentwood Blvd. to Elkins Way.
 Slurry seal the subdivisions north of Sand Creek Road and west of Minnesota Avenue, which includes Ashton Place III, Hallmark, Heritage, Laurelwood Estates II, and Ponderosa Crossroads II.

The Project was advertised on March 26, 2024, and bids were opened on April 24, 2024. The following seven (7) bids were received.

Bidder Bid Amount
DSS Company dba Knife River Construction $2,077,240.00
JV Lucas Paving, Inc. $2,107,629.00
Radius Earthwork, Inc. $2,131,809.40
Goodfellow Bros. California, LLC $2,134,996.00
Mountain Cascade, Inc. $2,165,913.00
Ghilotti Bros., Inc. $2,555,943.50
McGuire and Hester $2,558,318.00
Staff reviewed the bids received and is recommending the award of the contract for the Project to DSS Company dba Knife River Construction (“KRC”) for submitting the lowest responsible bid, despite a protest submitted by the second lowest bidder, JV Lucas Paving.

Following consultation with the City Attorney’s Office and outside counsel, staff has responded in writing to the bid protest, acknowledging that the KRC bid omitted to enter the Base Bid price from its Bid Schedule onto its Bid Proposal form (See Attachment 5).

Therefore, Staff recommends that the City Council waive this irregularity in KRC’s bid as immaterial for the reasons set forth in the attached letter in response to the protest.

CITY COUNCIL AGENDA ITEM NO. G.7
05/28/2024

CITY COUNCIL STRATEGIC INITIATIVE
Not Applicable.

PREVIOUS ACTION
Previous Action by the City Council is included on Attachment 1.

DATE OF NOTICE
Not Applicable.

ENVIRONMENTAL DETERMINATION
A Notice of Exemption was filed with the Contra Costa County Clerk Recorder on April 19, 2024.

ALTERNATIVE OPTION(S)

1. Do not approve staff’s recommendation.

2. Modify staff’s recommendation based on legally defensible findings.

3. Continue the item with direction for staff to return with additional information.

ATTACHMENT(S)

1. Previous Action

2. Resolution

3. List of Locations

4. Contract

5. Response to Bid Protest

Attachment 1

PREVIOUS ACTION
Previous actions related to this agenda item that were taken by the Council are listed below. To view prior actions and materials, and Brentwood Municipal Code references in the staff report, as applicable:
 Visit www.brentwoodca.gov/meetings, and select the meeting date(s) desired to see the reference materials and videos.
 Visit www.brentwoodca.gov/municipalcode to research references to the Brentwood Municipal Code and search by the code section(s) cited.

On June 13, 2023, by Resolution No. 2023-80, the City Council adopted the 2023/24 – 2027/28 Capital Improvement Program, which included the Project.

RESOLUTION NO. 2024-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BRENTWOOD APPROVING THE CONTRACT DOCUMENTS,

WAIVING AN IMMATERIAL IRREGULARITY, AWARDING THE

BID AND AUTHORIZING THE CITY MANAGER OR DESIGNEE TO

EXECUTE A CONTRACT AND NECESSARY DOCUMENTS FOR THE
PAVEMENT MANAGEMENT PROGRAM 2024 (ASPHALT), CIP
PROJECT NO. 336-31703, WITH DSS COMPANY DBA KNIFE

RIVER CONSTRUCTION AS THE LOWEST RESPONSIBLE BIDDER
IN THE AMOUNT OF $2,077,240.00, PLUS FUNDING
AUTHORIZATION FOR A 1% CONTINGENCY OF $20,772.40, FOR

A TOTAL FUNDING AUTHORIZATION NOT TO EXCEED AMOUNT
OF $2,098,012.40.

WHEREAS, on June 13, 2023, by Resolution No. 2023-80, the City Council adopted the 2023/24 – 2027/28 Capital Improvement Program, which included the Pavement Management Program 2024, CIP Project No. 336-31703 (“Project”); and WHEREAS, this Project is scheduled to repair several manholes throughout the City and surface the following locations: full depth reconstruction of Redhaven Street, near Sellers Avenue; grind and overlay on Brentwood Blvd. from Hanson Lane to Lone Tree Way; Cloverleaf Circle; Sellers Avenue from Balfour Road to Chestnut Street; and Sunset Road from Brentwood Blvd. to Elkins Way; and slurry seal the subdivisions north of Sand Creek Road and west of Minnesota Avenue, which includes Ashton Place III, Hallmark, Heritage, Laurelwood Estates II, and Ponderosa Crossroads II; and
WHEREAS, the Project was advertised on March 26, 2024, and seven (7) bids were received and opened on April 24, 2024; and
WHEREAS, staff reviewed the bids received and is recommending the award of the contract for the Project to DSS Company dba Knife River Construction (“KRC”) for submitting the lowest responsible bid, despite a protest submitted by the second lowest bidder, JV Lucas Paving; and
WHEREAS, following consultation with the City Attorney’s Office and outside counsel, staff has responded in writing to the bid protest, acknowledging that the KRC bid omitted to enter the Base Bid price from its Bid Schedule onto its Bid Proposal form, Exhibit A - Response to Bid Protest, herein attached; and WHEREAS, staff recommends that Council waive this irregularity in KRC’s bid as immaterial for the reasons set forth in the attached letter in response to the protest.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby approve the contract documents, waive the immaterial irregularity, award the bid and authorize the City Manager or designee to execute a contract and necessary documents for the Pavement Management Program 2024 (Asphalt), CIP Project No. 336-31703, with DSS Company dba Knife River Construction as the lowest responsible bidder in the amount of $2,077,240.00, plus funding authorization for a 1% contingency of $20,772.40, for a total funding authorization not to exceed amount of $2,098,012.40.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 28th day of May 2024 by the following vote:

Exhibit A – Response to Bid Protest

Pavement Management Program 2024 (Asphalt)
List of Locations
This Project is scheduled to repair several manholes throughout the City and surface the following locations:

Full Depth Reconstruction
Redhaven Street, near Sellers Avenue
Grind and Overlay
Brentwood Blvd. from Hanson Lane to Lone Tree Way
Cloverleaf Circle
Sellers Avenue from Balfour Road to Chestnut Street
Sunset Road from Brentwood Blvd. to Elkins Way
Slurry Seal
Location: north of Sand Creek Road and west of Minnesota Avenue Subdivisions:

Ashton Place III
Hallmark
Heritage
Laurelwood Estates II
Ponderosa Crossroads II

Contract
This public works contract (“Contract”) is entered into by and between the City of Brentwood (“City”) and DSS Company dba Knife River Construction, a California Corporation (“Contractor”), for work on the Pavement Management Program 2024 (Asphalt), CIP Project No. 336-31703 (“Project”).

The parties agree as follows:

1. Award of Contract. In response to the Notice Inviting Bids, Contractor has submitted a Bid Proposal to perform the Work to construct the Project. On May 28, 2024, City authorized award of this Contract to Contractor for the amount set forth in Section 4, below. City has elected to include the following Project alternate(s) in the Contract: No alternates.

2. Contract Documents. The Contract Documents incorporated into this Contract include and are comprised of all of the documents listed below. The definitions provided in Article 1 of the General Conditions apply to all of the Contract Documents, including this Contract.

2.1 Notice Inviting Bids;

2.2 Instructions to Bidders;

2.3 Addenda, if any;

2.4 Bid Proposal and attachments thereto;

2.5 Contract;

2.6 Payment and Performance Bonds;

2.7 General Conditions;

2.8 Special Conditions;

2.9 Project Plans and Specifications;

2.10 Change Orders, if any;

2.11 Notice of Potential Award;

2.12 Notice to Proceed; and

2.13 The following: No other documents

3. Contractor’s Obligations. Contractor will perform all of the Work required for the Project, as specified in the Contract Documents. Contractor must provide, furnish, and supply all things necessary and incidental for the timely performance and completion of the Work, including all necessary labor, materials, supplies, tools, equipment, transportation, onsite facilities, and utilities, unless otherwise specified in the Contract Documents. Contractor must use its best efforts to diligently prosecute and complete the Work in a professional and expeditious manner and to meet or exceed the performance standards required by the Contract Documents.

4. Payment. As full and complete compensation for Contractor’s timely performance and completion of the Work in strict accordance with the terms and conditions of the Contract Documents, City will pay Contractor $2,077,240.00 (“Contract Price”) for all of Contractor’s direct and indirect costs to perform the Work, including all labor, materials, supplies, equipment, taxes, insurance, bonds and all overhead costs, in accordance with the payment provisions in the General Conditions.

5. Time for Completion. Contractor will fully complete the Work for the Project, meeting all requirements for Final Completion, within 58 calendar days from the start date set forth in the Notice to Proceed (“Contract Time”). By signing below, Contractor expressly waives any claim for delayed early completion.

6. Liquidated Damages. As further specified in Section 5.4 of the General Conditions, if Contractor fails to complete the Work within the Contract Time, City will assess liquidated damages in the amount of $2,500 per day for each day of unexcused delay in achieving Final Completion, and such liquidated damages may be deducted from City’s payments due or to become due to Contractor under this Contract.

7. Labor Code Compliance.

7.1 General. This Contract is subject to all applicable requirements of Chapter 1 of Part 7 of Division 2 of the Labor Code, including requirements pertaining to wages, working hours and workers’ compensation insurance, as further specified in Article 9 of the General Conditions.

7.2 Prevailing Wages. This Project is subject to the prevailing wage requirements applicable to the locality in which the Work is to be performed for each craft, classification or type of worker needed to perform the Work, including employer payments for health and welfare, pension, vacation, apprenticeship and similar purposes. Copies of these prevailing rates are available online at http://www.dir.ca.gov/DLSR.

7.3 DIR Registration. City may not enter into the Contract with a bidder without proof that the bidder and its Subcontractors are registered with the California Department of Industrial Relations to perform public work pursuant to Labor Code § 1725.5, subject to limited legal exceptions.

8. Workers’ Compensation Certification. Pursuant to Labor Code § 1861, by signing this Contract, Contractor certifies as follows: “I am aware of the provisions of Labor Code § 3700 which require every employer to be insured against liability for workers’ compensation or to undertake selfinsurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the Work on this Contract.”

9. Conflicts of Interest. Contractor, its employees, Subcontractors, and agents may not have, maintain, or acquire a conflict of interest in relation to this Contract in violation of any City ordinance or requirement, or in violation of any California law, including Government Code § 1090 et seq., or the Political Reform Act, as set forth in Government Code § 81000 et seq. and its accompanying regulations. Any violation of this Section constitutes a material breach of the Contract.

10. Independent Contractor. Contractor is an independent contractor under this Contract and will have control of the Work and the means and methods by which it is performed. Contractor and its Subcontractors are not employees of City and are not entitled to participate in any health, retirement, or any other employee benefits from City.

11. Notice. Any notice, billing, or payment required by or pursuant to the Contract Documents must be made in writing, signed, dated, and sent to the other party by personal delivery, U.S. Mail, a reliable overnight delivery service, or by email as a PDF file. Notice is deemed effective upon delivery, except that service by U.S. Mail is deemed effective on the second working day after deposit for delivery. Notice for each party must be given as follows:

City:

City of Brentwood
Engineering Department
150 City Park Way
Brentwood, CA 94513
925.516.5420
Attn: Brant Wilson, PE, Senior Associate Engineer
[email protected]

Contractor:

Name: DSS Company dba Knife River Construction
Address: 655 W. Clay Street
City/State/Zip: Stockton, CA 95206
Phone: 209.932.2100
Attn: Jeff Herbert
Email: [email protected]
Copy to: [email protected]

12. General Provisions.

12.1 Assignment and Successors. Contractor may not assign its rights or obligations under this Contract, in part or in whole, without City’s written consent. This Contract is binding on Contractor’s and City’s lawful heirs, successors and permitted assigns.

12.2 Third Party Beneficiaries. There are no intended third party beneficiaries to this Contract.

12.3 Governing Law and Venue. This Contract will be governed by California law and venue will be in the Contra Costa County Superior Court, and no other place. Contractor waives any right it may have pursuant to Code of Civil Procedure § 394, to file a motion to transfer any action arising from or relating to this Contract to a venue outside of Contra Costa County, California.

12.4 Amendment. No amendment or modification of this Contract will be binding unless it is in a writing duly authorized and signed by the parties to this Contract.

12.5 Integration. This Contract and the Contract Documents incorporated herein, including authorized amendments or Change Orders thereto, constitute the final, complete, and exclusive terms of the agreement between City and Contractor.

12.6 Severability. If any provision of the Contract Documents is determined to be illegal, invalid, or unenforceable, in whole or in part, the remaining provisions of the Contract Documents will remain in full force and effect.

12.7 Iran Contracting Act. If the Contract Price exceeds $1,000,000, Contractor certifies, by signing below, that it is not identified on a list created under the Iran Contracting Act, Public Contract Code § 2200 et seq. (the “Act”), as a person engaging in investment activities in Iran, as defined in the Act, or is otherwise expressly exempt under the Act.

12.8 Authorization. Each individual signing below warrants that he or she is authorized to do so by the party that he or she represents, and that this Contract is legally binding on that party. If Contractor is a corporation, signatures from two officers of the corporation are required pursuant to California Corporations Code § 313. [Signatures on following page.]

12.9 Digital/Electronic Signatures. Using a City-approved method, this Contract may be executed through the use of digital or electronic signatures in accordance with Government Code Section 16.5. The presence of an electronic signature on this Contract will be construed as the Parties’ consent to do business electronically.

The parties agree to this Contract as witnessed by the signatures below:

CITY: Approved as to form:
s/_______________________________ s/__________________________________ Tim Y. Ogden, City Manager Katherine Wisinski, Interim City Attorney Date: ___________________________ Date: ______________________________

Attest:
s/_______________________________
Margaret Wimberly MMC, City Clerk
Date: ___________________________
CONTRACTOR: DSS Company dba Knife River Construction
Business Name
s/_______________________________ Seal:
_________________________________
Rod Getty, Vice President
Date: ____________________________
Second Signature (See Section 12.8):
s/_______________________________
_________________________________
Mike Fidler, Assistant Secretary
Date: ____________________________
___________________________________________________
Contractor’s California License Number(s) and Expiration Date(s)

ENGINEERING DEPARTMENT
150 City Park Way, Brentwood, CA 94513
Phone 925.516.5420 Fax 925.516.5421
www.brentwoodca.gov
Via email only: [email protected]
May 3, 2024
Mark J. Hilliard
Brother Smith LLP
2033 N. Main Street, Suite 720
Walnut Creek, CA 94596
RE: City of Brentwood Pavement Management Program 2024 (Asphalt) CIP Project No. 336-31703
Response to Bid Protest
Dear Mr. Hilliard:

I write on behalf of the City of Brentwood (“City”) in response to the bid protest dated April 26, 2024 (“Protest”), which you submitted on behalf of your client, J.V. Lucas Paving, Inc. (“JVL”), which submitted the second lowest bid for the above-referenced City public works project (“Project”). Bids for the Project were opened on April 24, 2024.

The Protest challenges the bid submitted by the low bidder, DSS Company dba Knife River Construction (“KRC”).

A. SUMMARY BACKGROUND
The Protest urges that the City should reject KRC’s bid as non-responsive based on KRC’s failure to include the Total Base Bid price set forth in KRC’s Bid Schedule in Section 1 of KRC’s Bid Proposal Form. The Protest further alleges that this omission means that the bid was “submitted with exceptions.” Finally, the Protest urges that based on the omission in the Bid Proposal form, the contract for the Project should be awarded to JVL, at JVL’s higher bid price. The Protest does not cite to or reference any relevant statutory or case law.

KRC’s bid submission, which included its completed Bid Schedule, proposed to construct the Project for $2,077,240.00 pursuant to the Total Base Bid price entered on KRC’s Bid Schedule. It is undisputed that KRC omitted to include this amount on its Bid Proposal form. According to KRC’s written response to the Protest, this omission was “a simple clerical error.” This is a credible explanation given that clerical errors are fairly common in public bidding due to the haste required for final compilation and submission of the bid once the last-minute subcontractor quotes have been received.

B. LEGAL ANALYSIS
The legal issue presented is whether KRC’s low bid must be rejected based on this variance from the instructions in the bid documents, or whether the variance may lawfully be waived by the City as an immaterial or inconsequential deviation.

The City does not dispute that failure to enter the Base Bid price in Section 1 of the Bid Proposal form rendered KRC’s bid nonresponsive. However, the City does not agree that this particular irregularity compels the City to reject KRC’s low bid and award the contract for the same work to JVL at a higher price. Section 11 of the Instructions to Bidders, states in part: “City reserves the unfettered right, acting in its sole discretion, to waive or to decline to waive an immaterial bid irregularities….” This reservation or rights is consistent with a robust body of case law in California concerning the materiality of bidding irregularities.

Mark J. Hilliard
May 3, 2024

In Bay Cities Paving & Grading, Inc. v. City of San Leandro (2014) 223 Cal.App.4th 1181 (“Bay Cities”), the appellate court held that pursuant to well-established case law, the city acted within its discretion in waiving the successful bidder’s omission of the first page of its bid bond as an immaterial or inconsequential irregularity. Bay Cities applied the established rule for waiver of bidding variances as set forth in California case law:
“[I]t is further well established that a bid which substantially conforms to a call for bids may, though it is not strictly responsive, be accepted if the variance cannot have affected the amount of the bid or given a bidder an advantage or benefit not allowed other bidders or, in other words, if the variance is inconsequential.” (Bay Cities, supra, 223 Cal.App.4th 1181 at 1188, quoting Ghilotti Construction Co. v City of Richmond (1996) 45 Cal.App.4th 897.) Thus, the first inquiry in this two-prong test is whether the failure to enter the Bid Schedule price on the Bid Proposal form could have affected the amount of KRC’s bid. It could not. There is no dispute as to the amount of KRC’s bid, which was set forth on the Bid Schedule submitted with its bid. As indicated in Section 18 of the Instructions to Bidders and the instructions on the Bid Schedule form, the Base Bid price is determined by the sum of the extended totals on the Bid Schedule, subject to correction in the event of any computational errors.

The second inquiry is whether the variance in KRC’s bid could have given KRC “an advantage or benefit not allowed other bidders.” This includes consideration of whether KRC could have withdrawn its bid without forfeiting its bid security pursuant to Public Contract Code section 5103 (“PCC § 5103). However, under PCC § 5103, a bid may only be withdrawn without forfeiting bid security if a clerical mistake “made the bid materially different” from what the bidder intended it to be. That is not the case here.

A computational total was not carried over from one bid document to another, but there was no error in the total itself. KRC’s error did not afford KRC an advantage not available to other bidders, because it could not serve as grounds for withdrawal under PCC § 5103. (See, e.g., Menefee v. County of Fresno (1985) 163 Cal.App.3d 1175, 1180-1181 [upholding a county’s waiver of a bidder’s failure to sign its bid proposal form, where this irregularity did not afford the bidder an opportunity to withdraw its bid without forfeiting its bid security].) In addition, the bid bond surety for KRC has confirmed in writing that the irregularity on KRC’s Bid Proposal form does not render the bid bond unenforceable: KRC remains bound by the terms of its bid bond for the amount of its bid. There is no evidence that the omission in KRC’s Bid Proposal form gave KRC an advantage over other bidders.

In addition, contrary to the allegation in the Protest, there is no evidence that KRC’s bid included any “exceptions.” An exception, in this context is an express statement to the effect that the bid proposal excludes specified requirements. There are no exceptions in KRC’s bid.

It is further noted that the arguments regarding the Federal Acquisition Regulation (“FAR”) in KRC’s response to the Protest and in JVL’s subsequent supplement to its Protest are not relevant. The Project is not subject to the FAR.

C. CONCLUSION
Finally, the Protest must be considered in light of well-established public policy favoring award to the low bidder.

California courts have consistently held that protests alleging nonresponsiveness must be evaluated from a practical, rather than speculative or hypertechnical perspective, and relative to the public interest:
“They must also be viewed in light of the public interest, rather than the private interest of a disappointed bidder. It certainly would amount to a disservice to the public if a losing bidder were to be permitted to comb through the bid proposal...of the low bidder after the fact, [and]

Mark J. Hilliard
May 3, 2024

cancel the low bid on minor technicalities, with the hope of securing acceptance of his, a higher bid. Such construction would be adverse to the best interests of the public and contrary to public policy.” (Bay Cities, supra, 223 Cal.App.4th 1181, 1189; internal quotation marks omitted.) There is no dispute as to the amount of KRC’s bid and apart from the clerical omission on the Bid Proposal form, KRC’s bid substantially complies with the bidding instructions and offers the lowest price for the Project. The public will benefit from having the work for the Project performed at the lowest price.

Accordingly, staff intends to recommend that the City Council waive the omission in KRC’s bid and award the contract to KRC as the lowest responsible bidder. The City appreciates JVL’s interest in the Project and welcomes its participation in future public works bids.

Sincerely,
Allen Baquilar
Director of Engineering/City Engineer
City of Brentwood
c: (via email only)
Donald Lowe, Estimating Manager (KRC)
City Attorney’s Office

CITY COUNCIL AGENDA ITEM NO. G.8
05/28/2024
SUBJECT: Notification of the correction of a clerical error in the Water utility rate schedule.

DEPARTMENT: Public Works
STAFF: Casey Wichert, Director of Public Works
Debra Galey, Senior Analyst, Engineering

TITLE/RECOMMENDATION
An informational report notifying the Council that City staff will correct a clerical error to the rate schedule in Attachment A to Resolution No. 2023-75 and file an amended Water Rate Study Report.

FISCAL IMPACT
This correction will have no impact to the Water Enterprise Fund, as the correct rate for these services was included in the adopted five-year rate study’s revenue requirements, and in the notification to residents. FY 2023/24 rates were correct in the originally adopted attachment and the corrected rates will be applicable beginning July 1, 2024.

BACKGROUND
WATER 4” METER BASE RATE
Following the adoption of the five-year rate study, a clerical error was discovered for the water 4” meter base rate for non-residential customers. Importantly, the Proposition 218 notice that was sent to all water customers correctly described the water rates for all years.

Specifically, through the Water Rate Study’s cost of service analysis, it was determined that a 6.5% increase was necessary to sustain the Water Enterprise operations. When the rates were transferred from the cost of service analysis into Attachment A of the water rate resolution, and into the Water Rate Study Report, the latter of which summarizes the Study methodology and findings, the water 4” meter base rate for non-residential customers was listed correctly for FY 2023/24, but the

6.5% increase that was approved by the City Council was not correctly listed for the subsequent FYs 2024/25 - 2027/28. All other water rates were listed correctly.

CITY COUNCIL AGENDA ITEM NO. G.8
05/28/2024
The following table shows the rates from the original Attachment A to Resolution 2023-75 with the incorrectly listed rates highlighted.

WATER RATES PER MONTH
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
Monthly Base Rate
4” Meter 420.31 292.65 293.65 294.65 295.65
The intended rate for FYs 2025/26 - 2027/28, as outlined in the Proposition 218 notice provided to all utility customers and property owners, and described in the narrative of the Rate Study Report is highlighted in the table below. As of the date of this report, 35 customers are charged the 4” water base rate.

WATER RATES PER MONTH
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
Monthly Base Rate
4” Meter 420.31 447.64 476.74 507.73 540.74
CORRECTIONS TO RESOLUTION 2023-175 AND WATER RATE STUDY REPORT To accurately reflect water rates adopted by the City Council and to correct the clerical error in the resolution, the City Clerk will be replacing Attachment A to Resolution 2023-175, and replacing the Water Rate Study Report, which now includes a corrected list of fees for water 4” meters for non-residential customers. A memo explaining the error and revision will also be filed with the revised Resolution and the revised Water Rate Study Report.

CITY COUNCIL STRATEGIC INITIATIVE
Focus Area 1 Public Works, Goal 2c, “Ensure fiscal sustainability by conducting rates studies”.

PREVIOUS ACTION
Previous Action by the City Council is included on Attachment 1.

DATE OF NOTICE

CITY COUNCIL AGENDA ITEM NO. G.8
05/28/2024
On April 21, 2023, Public Hearing Notices were sent to all property owners and customers of the parcels served by the City’s Water, Wastewater and Solid Waste utilities. In the Notice, the Water Service increase was correctly listed as 6.5% for FYs 2023/24 - 2027/28. As such, additional Proposition 218 Notice of the correction is not required.

ENVIRONMENTAL DETERMINATION
Not Applicable.

ALTERNATIVE OPTION(S)
Alternative Options to the Staff Recommendation:

1. Do not approve staff’s recommendation, and there could be confusion about the rate approved for the approximate 35 customers.

ATTACHMENT(S)

1. Previous Action

2. File Memo

3. Amended Attachment A to Resolution 2023-75

4. Amended Water Rate Study

ATTACHMENT “1”
Previous actions related to this agenda item that were taken by the Council are listed below. To view prior actions and materials, and Brentwood Municipal Code references in the staff report, as applicable:
 Visit www.brentwoodca.gov/meetings, and select the meeting date(s) desired to see the reference materials and videos.
 Visit www.brentwoodca.gov/municipalcode to research references to the Brentwood Municipal Code and search by the code section(s) cited.

On July 26, 2022, the City Council adopted Resolution No. 2022- 96, approving and authorizing the City Manager or designee to execute a Professional Service Agreement with Raftelis Financial Consultants, Inc., for a Comprehensive Water and Wastewater (including Non-potable Water) Rate and User Fee Study, in the amount of $76,290, plus a 10% contingency of $7,629 for a total not-to-exceed amount of $83,919.00.

On June 13, 2023, the City Council adopted Resolution No. 2023-75, accepting and approving the Water and Wastewater Cost of Service Study and adopting rate structures for water utility service for Fiscal Years 2023/24 through 2027/28 and subsequent years.

MEMORANDUM
DATE: May 28, 2024
TO: Margaret Wimberly, City Clerk
FROM: Casey Wichert, Director of Public Works
CC: Tim Ogden, City Manager
Katy Wisinski, Interim City Attorney
Kerry Breen, Director of Finance and Information Systems SUBJECT: Correction to Resolution No. 2023-75, Attachment A-1 and Water and Wastewater Rate Study Report
Resolution 2023-75 was adopted by the City Council on June 13, 2023. Following the adoption of the five-year rate study, an unintended clerical error was discovered for the water 4” meter base rate for non-residential customers and needs to be corrected.

BACKGROUND
Following the adoption of the five-year rate study, an unintended clerical error was discovered for the water 4” meter base rate for non-residential customers. The Proposition 218 notice that was sent to all water customers correctly described the water rates for all years.

Specifically, through the Water Rate Study’s cost of service analysis, it was determined that a 6.5% increase was necessary to sustain the water enterprise operations. When the rates were transferred from the cost of service analysis into Attachment A of the water rate resolution, and into the Water Rate Study Report, the latter of which summarizes the Study methodology and findings, the water 4” meter base rate for non-residential customers was listed correctly for FY 2023/24, though the 6.5% increase that was approved by the City Council was not correctly listed for the subsequent FYs 2024/25 - 2027/28. All other water rates were listed correctly.

The following table shows the rates from the original Attachment A to Resolution 2023-75 with the incorrectly listed rates highlighted.

WATER RATES PER MONTH
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
Monthly Base Rate
4” Meter 420.31 292.65 293.65 294.65 295.65
The intended rate for FYs 2025/26 - 2027/28, as outlined in the Notice provided to all utility customers and property owners, and described in the narrative of the Rate Study Report is correctly highlighted in the table below.

WATER RATES PER MONTH
FY 2023-
24 FY 2024-
25 FY 2025-
26 FY 2026-
27 FY 2027-
28 Monthly Base Rate
4” Meter 420.31 447.64 476.74 507.73 540.74

NOTICE TO CUSTOMERS
On April 21, 2023, Public Hearing Notices were sent to all property owners and customers of the parcels served by the City’s Water, Wastewater and Solid Waste utilities. In the Notice, the Water 4” meter base rate was correctly listed as 6.5% for FYs 2024/25 – 27/28.

CORRECTIONS TO RESOLUTION NO. 2023-175 AND WATER RATE STUDY REPORT At their meeting of May 28, 2024, the City Council will be notified of this clerical error. Following that meeting, and to accurately reflect the water rates adopted by the City Council, please replace Attachment A to Resolution 2023-75, with the corrected Attachment A, and replace the Water Rate Study Report with the corrected version. Also include a copy of this memo with Resolution No. 2023- 75 and the Rate Study Report. This matter was reviewed by the City Attorney and outside legal counsel, and they concur with this course of action.

Please contact me should you have any questions. Thank you for your assistance with these matters.

CORRECTED EXHIBIT “A” TO RESOLUTION 2023-75
Water rates are comprised of a fixed (base) monthly charge in addition to a charge for the volume of water used

WATER RATES PER MONTH
FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28
Monthly Base Rate
5/8” or 3/4” Meter 28.16 30.00 31.95 34.03 36.25
1” Meter 41.24 43.93 46.79 49.84 53.08
1 ½” Meter 73.91 78.72 83.84 89.29 95.10
2” Meter 113.13 120.49 128.33 136.68 145.57
3” Meter 237.31 252.74 269.17 286.67 305.31
4” Meter 420.31 447.64 476.74 507.73 540.74
6” Meter 858.20 913.99 973.40 1036.68 1104.07
Usage Rate
Residential
Tier 1: Units 1-5 3.18 3.39 3.62 3.86 4.12
Tier 2: Units 6-14 6.60 7.03 7.49 7.98 8.50
Tier 3: Units 15-20 8.33 8.88 9.46 10.08 10.74
Tier 4: Units 21+ 8.43 8.98 9.57 10.20 10.87
Non-Residential
Tier 1: Units 1-5 3.20 3.41 3.64 3.88 4.14
Tier 2: Units 6+ 7.98 8.50 9.06 9.65 10.28
Non-Potable
All Units 1.08 1.19 1.23 1.27 1.31
Hydrant
All Units 8.91 9.49 10.11 10.77 11.48
Drought Surcharge
Per Unit
10% Reduction .46 .49 .52 .56 .59
20% Reduction .95 1.01 1.08 1.15 1.22
30% Reduction 1.50 1.60 1.70 1.81 1.93
40% Reduction 2.35 2.50 2.67 2.84 3.02
50% Reduction 3.16 3.37 3.58 3.82 4.07
Unit =1,000 Gallons
Rates may be further adjusted in the event that costs that are not within the City’s control, such as water purchased costs, electrical costs, chemical costs etc., exceed the amount projected. The additional costs may be recovered through the rates at the actual cost paid by the City.

CITY OF BRENTWOOD
Water and Wastewater
Rate Study
AMENDED FINAL DRAFT REPORT / September 26, 2023

445 S. Figueroa Street, Suite 1925, Los Angeles, CA 90071 www.raftelis.com
September 26, 2023
Ms. Debra Galey
Senior Analyst
City of Brentwood
150 City Park Way
Brentwood, CA 94513
Subject: Water and Wastewater Financial Plan Study Report Dear Ms. Galey:

Raftelis is pleased to provide this Water and Wastewater Financial Plan study report for the City of Brentwood (City) to address current financial challenges the City is facing and to establish water and wastewater rates that equitably recover costs from its customers.

The major objectives of the study include the following:
• Develop financial plans for the water and wastewater enterprises to ensure financial sufficiency, meet operation and maintenance (O&M) costs, ensure sufficient funding for capital replacement and refurbishment (R&R) needs, and improve the financial health of the enterprises • Develop sound and sufficient reserve fund targets and reserves • Review current rate structures for the water and wastewater enterprises • Prepare a five-year schedule of rates
The report summarizes the key findings and recommendations related to developing the financial plans for water and wastewater utilities and the development of the updated water and wastewater rates.

It has been a pleasure working with you, and we thank you and the City staff for the support provided during the course of this study.

Sincerely,
Sudhir D. Pardiwala, P.E. Theresa Jurotich
Executive Vice President Manager

City of Brentwood / Water and Wastewater Rate Study
Contents

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

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

1.2. Water Enterprise Financial Plan ..................................................................................2

1.3. Proposed Water Rates..................................................................................................4

1.4. Customer Impacts - Water............................................................................................5

1.5. Wastewater Enterprise Financial Plan ........................................................................5

1.6. Proposed Wastewater Rates........................................................................................7

1.7. Customer Impacts – Wastewater.................................................................................8

1.8. Drought Surcharge .......................................................................................................8

2. Overview....................................................................................... 9

2.1. Introduction ...................................................................................................................9

2.2. Legal Requirements and Rate Setting Methodology .................................................9

3. Water Rates................................................................................ 11

3.1. Water System Background.........................................................................................11

3.2. Water Account and Usage Assumptions ..................................................................11

3.3. Inflationary and Other Assumptions .........................................................................13

3.4. Water Enterprise Financial Plan ................................................................................13

3.4.1. Revenue Requirement .................................................................................................. 13

3.5. Water Cost-of-Service Analysis .................................................................................19

3.5.1. Allocation of Functionalized Expenses to Cost Components ......................................... 20

3.5.2. Revenue Requirement Determination ........................................................................... 24

3.5.3. Unit Cost Component Derivation ................................................................................... 24

3.5.4. Distribution of Cost Causation Components to Customer Classes ................................ 25

3.6. Water Rate Design ......................................................................................................26

3.6.1. Existing Rate Structure and Rates................................................................................. 26

3.6.2. Proposed Monthly Fixed Charge ................................................................................... 27

3.6.3. Proposed Commodity Rates.......................................................................................... 28

3.6.4. 5-Year Proposed Monthly Water Rates ......................................................................... 32

3.7. Water Bill Impacts .......................................................................................................33

4. Wastewater Rates...................................................................... 34

City of Brentwood / Water and Wastewater Rate Study

4.1. Wastewater System Background...............................................................................34

4.2. Wastewater Account and Usage Assumptions ........................................................34

4.3. Inflationary and Other Assumptions .........................................................................36

4.4. Wastewater Enterprise Financial Plan ......................................................................36

4.4.1. Revenue Requirement .................................................................................................. 36

4.5. Wastewater Cost-of-Service Analysis .......................................................................41

4.5.1. Costs-of-Service to be Allocated ................................................................................... 42

4.5.2. Cost Allocation to Wastewater Cost Causation Parameters .......................................... 43

4.5.3. Unit Cost-of-Service ...................................................................................................... 43

4.6. Wastewater Rate Derivation.......................................................................................45

4.6.1. Existing Rate Structure and Rates................................................................................. 45

4.6.2. Proposed Rates ............................................................................................................ 46

4.7. Wastewater Bill Impacts .............................................................................................47

5. Drought Surcharge ..................................................................... 48

City of Brentwood / Water and Wastewater Rate Study
Tables
Table 1-1: Annual Water Revenue Adjustments....................................................................................... 3 Table 1-2: Proposed Monthly Water Rates............................................................................................... 5 Table 1-3: Residential Water Monthly Rate Impacts................................................................................. 5 Table 1-4: Annual Wastewater Revenue Adjustments ............................................................................. 7 Table 1-5: Proposed Monthly Wastewater Rates ..................................................................................... 8 Table 1-6: Residential Wastewater Monthly Rate Impacts ....................................................................... 8 Table 1-7: Drought Surcharge by Percent Usage Reduction.................................................................... 8 Table 3-1: Projected Water Accounts by Meter Size .............................................................................. 12 Table 3-2: Water Account Growth .......................................................................................................... 12 Table 3-3: Projected Water Use by Customer Class .............................................................................. 12 Table 3-4: Projected Water Enterprise O&M Expenses.......................................................................... 14 Table 3-5: Detailed Water Enterprise Capital Improvement Plan – Inflated ............................................ 14 Table 3-6: Water Enterprise Debt Service Payments ............................................................................. 15 Table 3-7: Proposed Water Revenue Adjustments................................................................................. 15 Table 3-8: Proposed Water Enterprise Cash Flow ................................................................................. 16 Table 3-9: Water Enterprise Debt Coverage Calculation........................................................................ 17 Table 3-10: Projected Water Enterprise Cash Balance .......................................................................... 19 Table 3-11: System-Wide Peaking Factors and Allocation to Cost Causation Components ................... 20 Table 3-12: Peaking Factors by Customer Class ................................................................................... 21 Table 3-13: Equivalent Meters ............................................................................................................... 22 Table 3-14: Allocation of Functionalized O&M and Capital Expenses to Cost Causation Components - Water..................................................................................................................................................... 23 Table 3-15: Water Revenue Requirement Determination....................................................................... 24 Table 3-16: Derivation of Service Units - Water ..................................................................................... 25 Table 3-17: Unit Cost Calculation - Water.............................................................................................. 25 Table 3-18: Allocation of Cost to Customer Class – Water..................................................................... 26 Table 3-19: Existing Monthly Water Rates ............................................................................................. 27 Table 3-20: Derivation of the Monthly Fixed Charge .............................................................................. 27 Table 3-21: Allocation of Water Supply .................................................................................................. 30 Table 3-22: Peaking Cost Calculation .................................................................................................... 31 Table 3-23: Proposed Commodity Rate ................................................................................................. 31 Table 3-24: Non-Potable Water Rate Calculation................................................................................... 32 Table 3-25: Proposed Monthly Water Rates........................................................................................... 32 Table 3-26: Residential Water Monthly Rate Impacts............................................................................. 33

City of Brentwood / Water and Wastewater Rate Study
Table 4-1: Projected Wastewater Accounts by Customer Class............................................................. 34 Table 4-2: Wastewater Account Growth................................................................................................. 35 Table 4-3: Projected Billed Wastewater Flow by Customer Class, kgal.................................................. 35 Table 4-4: Projected Wastewater Enterprise O&M Expenses................................................................. 36 Table 4-5: Detailed Wastewater Enterprise Capital Improvement Plan – Inflated................................... 37 Table 4-6: Wastewater Enterprise Debt Service Payments .................................................................... 37 Table 4-7: Proposed Wastewater Revenue Adjustments ....................................................................... 38 Table 4-8: Proposed Wastewater Enterprise Cash Flow ........................................................................ 38 Table 4-9: Wastewater Enterprise Debt Coverage Calculation............................................................... 39 Table 4-10: Wastewater Enterprise Projected Cash Balance ................................................................. 41 Table 4-11: Allocation of Wastewater Revenue Requirements............................................................... 42 Table 4-12: Mass Balance ..................................................................................................................... 44 Table 4-13: Units of Service................................................................................................................... 44 Table 4-14: Development of Unit Costs.................................................................................................. 45 Table 4-15: Existing Monthly Wastewater Rates .................................................................................... 46 Table 4-16: Consolidated Non-Residential Wastewater Customer Classes............................................ 46 Table 4-17: Proposed Monthly Wastewater Rates ................................................................................. 47 Table 4-18: Average Residential Wastewater Monthly Rate Impacts ..................................................... 47 Table 5-1: Projected Water Demand by Percent Usage Reduction ........................................................ 48 Table 5-2: Estimated Cost Savings by Percent Usage Reduction .......................................................... 49 Table 5-3: Drought Surcharge by Percent Usage Reduction.................................................................. 49 Figures
Figure 1-1: Water Enterprise Projected O&M Expenses........................................................................... 2 Figure 1-2: Water Enterprise Capital Financing Plan................................................................................ 3 Figure 1-3: Water Enterprise Total Cash Balance .................................................................................... 4 Figure 1-4: Wastewater Enterprise Projected O&M Expenses ................................................................. 6 Figure 1-5: Wastewater Enterprise Capital Financing Plan ...................................................................... 6 Figure 1-6: Wastewater Enterprise Cash Balance.................................................................................... 7 Figure 3-1: Proposed Water Enterprise Revenue Adjustments and Debt Coverage Ratios.................... 17 Figure 3-2: Proposed Potable Water Financial Plan............................................................................... 18 Figure 3-3: Projected Water Enterprise Capital Projects ........................................................................ 18 Figure 3-4: Water Enterprise Total Cash Balance .................................................................................. 19 Figure 4-1: Proposed Wastewater Enterprise Revenue Adjustments and Debt Coverage Ratio ............ 39

City of Brentwood / Water and Wastewater Rate Study
Figure 4-2: Proposed Wastewater Enterprise Financial Plan ................................................................. 40 Figure 4-3: Projected Wastewater Enterprise CIP and Funding Sources ............................................... 40 Figure 4-4: Wastewater Enterprise Total Cash Balance......................................................................... 41 Appendices
Appendix A: Water Cost-of-Service Tables
Appendix B: Wastewater Cost-of-Service Tables
Appendix C: Projected Water Demand Based on Reduction Level

City of Brentwood / Water and Wastewater Rate Study

THIS PAGE INTENTIONALLY LEFT BLANK

City of Brentwood / Water and Wastewater Rate Study 1

1. Executive Summary
In 2022, the City of Brentwood (City) engaged Raftelis Financial Consultants, Inc. (Raftelis) to conduct a comprehensive Water and Wastewater Cost-of-Service study to determine user charges for the City’s water and wastewater services that ensure proportionate recovery of costs from the various user classes. This report documents the resultant findings, analyses, and recommendations.

The major objectives of the study include the following:
• Develop Financial Plans for the water and wastewater funds to ensure financial sufficiency, recover operation and maintenance (O&M) costs, meet debt coverage requirements, fund capital repairs and replacements (R&R), and ensure sufficient funding of City financial reserves. • Conduct a Cost-of-Service analysis for the water and wastewater systems to recover costs proportionate to the service received.
• Develop fair and equitable water and wastewater rates that provide revenue stability for recovering fixed costs, maintain affordable service, and align with the requirements of Proposition 218.

The water cost-of-service study was prepared using the principles established by the American Water Works Association (AWWA). AWWA “Principles of Water Rates, Fees, and Charges: Manual of Water Supply Practices M1 (seventh edition) (the “M1 Manual”). The wastewater cost-of-service study was prepared based on the principles established by the Water Environment Federation (WEF) and described in Financing and Charges for Wastewater Systems.

This executive summary provides an overview of the study and includes findings and recommendations for water and wastewater rates.

A fiscal year for the City is from July 1 to June 30 the following year. Therefore, July 1, 2022, through June 30, 2023, is identified as FY 2023; July 1, 2023, through June 30, 2024, is identified as FY 2024 and so on.

The City bills are based on a thousand gallons (kgal); therefore, one unit of water is a thousand gallons.

1.1. System Background
The City was incorporated in 1948 and provides potable water to approximately 21,500 connections serving a population of approximately 64,900. The City supplies potable water from the City’s wells, as well as from surface water that is treated at the City of Brentwood Treatment Plant (Brentwood TP). The City contracts with Contra Cost Water District to receive water treated at the Randall Bold Water Treatment Plant (RBWTP) on a take-or-pay basis. Surface water originates in the Sierra Nevada mountains and is diverted from the Sacramento-San Joaquin Delta. The City’s water distribution system includes about 300 miles of water mains. The cost of water supply has increased during the recent drought due to tightening water supplies and environmental and regulatory requirements.

Additionally, non-potable water is available in some areas of the City for irrigation and is supplied with untreated water pumped from the Sacramento-San Joaquin Delta by the East Contra Costa Irrigation District.

The City’s Wastewater Treatment Plant (WWTP) also produces recycled water suitable for non-potable reuse.

Recycled water is distributed through the City’s non-potable water supply system.

City of Brentwood / Water and Wastewater Rate Study 2
The City wastewater system collects, treats, and disposes of wastewater from approximately 21,100 connections. Wastewater is treated at the City’s WWTP with a current capacity of 5.0 million gallons per day (MGD). The WWTP is an extended aeration/activated sludge facility. Treated effluent, if not recycled, is discharged into Marsh Creek. In addition to the treatment plant, the wastewater system includes approximately 200 miles of wastewater mains and lateral connections.

1.2. Water Enterprise Financial Plan
To determine the revenue adjustments needed to meet the ongoing expenses of the City’s water enterprise and provide fiscal stability, Raftelis projected the revenue requirements, including operations and maintenance (O&M) expenses, capital improvement expenses, debt service costs, reserve requirements, etc., for the study period. O&M expenses include the cost of operating and maintaining water supply, treatment, storage, and distribution facilities, as well as the costs of providing technical services such as engineering services and other administrative costs of the water system such as meter reading and billing. O&M projections are based on the City’s projected budgetary increases in FY 2024 and beyond. The City uses inflation factors that are indicative of industry increases for different expenditures within the budget, such as personnel, supplies, or fuel, to capture the impact of various market forces. Potable water usage is projected to remain constant (excluding usage growth due to new accounts). The proposed financial plan and water rates are based on this level of water usage. Figure 1-1 shows the projected water O&M expenses over the planning period.

Figure 1-1: Water Enterprise Projected O&M Expenses
In addition to operating expenses, the City is planning capital expenditures totaling about $14.5 million, to be funded by water rates from FY 2024 through FY 2028. Existing annual debt service payments are about $2.8 million over the planning period. No new debt is anticipated. Figure 1-2 shows the water CIP that will be funded by rates over the planning period.
$0
$5
$10
$15
$20
$25
$30
$35
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Projected O&M Expenses
Supply (Surface Water) Production (Wells) Treatment Distribution Utility Billing Non-Potable

City of Brentwood / Water and Wastewater Rate Study 3
Figure 1-2: Water Enterprise Capital Financing Plan
To ensure that the City will have adequate revenues to fund water operating and capital expenses and to maintain sufficient reserves, Raftelis recommends the revenue adjustments in Table 1-1.

Table 1-1: Annual Water Revenue Adjustments
Fiscal Year Effective Date Revenue Adjustment
FY 2024 July 1, 2023 6.5%
FY 2025 July 1, 2024 6.5%
FY 2026 July 1, 2025 6.5%
FY 2027 July 1, 2026 6.5%
FY 2028 July 1, 2027 6.5%
Figure 1-3 shows the resulting cash balance for the water utility. The red line represents the total current target, which is equal to 30 percent of annual operating expenses and debt service payments. $2.3
$4.5
$3.5
$2.2 $2.2
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Capital Financing Plan
Bond Funded CIP Rate Funded CIP

City of Brentwood / Water and Wastewater Rate Study 4
Figure 1-3: Water Enterprise Total Cash Balance

1.3. Proposed Water Rates
Raftelis recommends that the City retain its current inclining rate structure, as well as current residential and non-residential tier definitions that are based upon the cost and availability of groundwater and surface water supply sources and customers’ usage characteristics. The current residential tiers are: Tier 1 is set at 0 to 5 thousand gallons (kgal) per month; Tier 2 is set at 6 to 14 kgal per month; Tier 3 is set at 15 to 20 kgal per month; Tier 4 is any usage above Tier 3. Non-residential customers currently have two tiers, with Tier 1 set at 0 to 5 kgal per month and Tier 2 defined as any usage above Tier 1. The rates are revised to be more consistent with the actual cost of service. Table 1-2 shows the proposed rates for the next five years, effective July 1 of each year.
$13.1M
$10.3M
$8.8M
$9.6M
$11.0M
$0
$2
$4
$6
$8
$10
$12
$14
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Water Fund Balance
Total Funds Current Target incl 30% Reserve

City of Brentwood / Water and Wastewater Rate Study 5
Table 1-2: Proposed Monthly Water Rates
The City reserves the right to pass through costs that are not within the City’s control, such as water purchased costs, electrical costs, chemical costs, etc. to the proposed rates when such an action is deemed necessary. The financial plan has built in projected increases in these costs. However, if those costs exceed the projected amount, the additional costs may be recovered through higher rates.

1.4. Customer Impacts - Water
Table 1-3 below shows the impacts of the proposed rates on a typical residential customer with a 1-inch meter using an average of 10 kgal of water monthly. Actual impacts will vary per customer dependent upon water usage.

Table 1-3: Residential Water Monthly Rate Impacts

1.5. Wastewater Enterprise Financial Plan
Raftelis projected the revenue requirements, including O&M expenses, capital improvement expenses, debt service costs, and reserve requirements for the wastewater enterprise over the study period. O&M expenses include wastewater collection, wastewater treatment, billing, and lateral maintenance. O&M projections are Current July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 July 1, 2027 Monthly Base Rate
Meter Size
5/8" or 3/4" $27.61 $28.16 $30.00 $31.95 $34.03 $36.25
1" $39.03 $41.24 $43.93 $46.79 $49.84 $53.08
1 1/2" $67.61 $73.91 $78.72 $83.84 $89.29 $95.10
2" $101.90 $113.13 $120.49 $128.33 $136.68 $145.57
3" $210.52 $237.31 $252.74 $269.17 $286.67 $305.31
4" $295.65 $420.31 $447.64 $476.74 $507.73 $540.74
6" $753.55 $858.20 $913.99 $973.40 $1,036.68 $1,104.07
Commodity Rate ($/kgal)
Residential Monthly (kgal)
Tier 1 5 $3.28 $3.18 $3.39 $3.62 $3.86 $4.12
Tier 2 14 $6.31 $6.60 $7.03 $7.49 $7.98 $8.50
Tier 3 20 $7.41 $8.33 $8.88 $9.46 $10.08 $10.74
Tier 4 21+ $7.64 $8.43 $8.98 $9.57 $10.20 $10.87
Non-Residential
Tier 1 5 $3.39 $3.20 $3.41 $3.64 $3.88 $4.14
Tier 2 6+ $6.87 $7.98 $8.50 $9.06 $9.65 $10.28
Hydrant $6.87 $8.91 $9.49 $10.11 $10.77 $11.48
Non-Potable $1.60 $1.08 $1.19 $1.23 $1.27 $1.31
Residential Usage (kgal) Current Bill Proposed Bill Difference $ Difference % Bills at or below
Average 10 $86.98 $90.14 3.6% $3.16 65.2%

City of Brentwood / Water and Wastewater Rate Study 6
based on the City’s projected budgetary increases in FY 2024 and beyond. The City uses different inflation factors for different expenditures within the budget. Figure 1-4 shows the projected wastewater enterprise O&M expenses over the planning period.

Figure 1-4: Wastewater Enterprise Projected O&M Expenses In addition to operating expenses, the City’s wastewater enterprise is planning capital expenditures totaling about $5.1 million over the study period. Wastewater rate revenue will be used to finance planned capital expenditures. Existing annual debt service payments increase from $191,000 to about $1 million over the planning period. Figure 1-5 shows the wastewater enterprise’s CIP funded by rates over the planning period.

Figure 1-5: Wastewater Enterprise Capital Financing Plan $0
$2
$4
$6
$8
$10
$12
$14
$16
$18
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Collection Treatment Utility Billing Lateral Maintenance $0.6
$3.6
$0.3 $0.3 $0.3
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions Capital Financing Plan
Rate Funded

City of Brentwood / Water and Wastewater Rate Study 7
To ensure that the City will have adequate revenues to fund the wastewater enterprise’s operating and capital expenses and to maintain sufficient reserves, Raftelis recommends the revenue adjustments shown in Table 1-4. The proposed adjustments are necessary to meet debt service coverage requirements of 110 percent for the SRF loans.

Table 1-4: Annual Wastewater Revenue Adjustments
Fiscal Year Effective Date Revenue Adjustment
FY 2024 July 1, 2023 2.0%
FY 2025 July 1, 2024 2.0%
FY 2026 July 1, 2025 2.0%
FY 2027 July 1, 2026 2.0%
FY 2028 July 1, 2027 2.0%
Figure 1-6 shows the resulting cash balance for the wastewater enterprise. The red line represents the total current target, which is equal to 30 percent of the wastewater enterprise’s annual operating expenses and debt service payments. It should be noted that while the cash balance is projected to exceed the target, SRF loan debt coverage calculations do not take into account existing cash balance when meeting coverage requirements.

Figure 1-6: Wastewater Enterprise Cash Balance

1.6. Proposed Wastewater Rates
Table 1-5 shows proposed wastewater rates for FY 2024 through FY 2028. Revenue adjustments of 2% occur on July 1 of each fiscal year throughout the planning period. $20.9M
$18.7M $17.9M $16.9M $15.6M
$0
$5
$10
$15
$20
$25
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions WW Fund Balance
Total Funds Target with 30% Reserve

City of Brentwood / Water and Wastewater Rate Study 8
Table 1-5: Proposed Monthly Wastewater Rates

1.7. Customer Impacts – Wastewater
Table 1-6 shows the monthly bill impact for residential customers at average winter usage. Note that residential customers are currently billed based on water use during the two lowest-use winter months.

Table 1-6: Residential Wastewater Monthly Rate Impacts

1.8. Drought Surcharge
In case of drought and further sales reductions, the City would lose revenue and fail to cover its expenses.

Raftelis has developed drought rates to supplement reduced revenue due to drought as shown in Table 1-7.

Table 1-7: Drought Surcharge by Percent Usage Reduction July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 July 1, 2027 Monthly Base Charge (per dwelling unit) $19.51 $19.91 $20.31 $20.72 $21.14 Monthly Lateral Maintenance Fee (per account) $4.07 $4.16 $4.25 $4.34 $4.43 Residential Variable Charge per unit ($/kgal)* $6.70 $6.84 $6.98 $7.12 $7.27 Residential Monthly Maximum Charge (capped 7 kgal/mo) $70.48 $71.95 $73.42 $74.90 $76.46 Non-Residential Variable Charge ($/kgal of actual water use) Low Strength $4.53 $4.63 $4.73 $4.83 $4.93
Medium Low Strength $5.13 $5.24 $5.35 $5.46 $5.57
Medium Strength $5.76 $5.88 $6.00 $6.12 $6.25
Medium High Strength $10.16 $10.37 $10.58 $10.80 $11.02 High Strength $11.60 $11.84 $12.08 $12.33 $12.58
*Residential users' variable charge is based on water usage during two lowest production winter months. Capped at 7 kgal/mo.

Monthly Usage
(kgal)
Current
Monthly Bill
Proposed
Monthly Bill
Difference
($) Difference %
% of Bills At
or Below
Average 4 $47.33 $50.38 $3.05 6.4% 44%
FY 2024
10%
Reduction
20%
Reduction
30%
Reduction
40%
Reduction
50%
Reduction
Projected Potable Variable Revenue $19,178,966 $17,162,016 $15,334,702 $13,811,009 $11,762,816 $10,219,536 Revenue Shortfall ($2,016,951) ($3,844,264) ($5,367,958) ($7,416,150) ($8,959,430) Cost Savings $647,261 $1,269,944 $1,641,164 $2,290,650 $2,824,388 Net Revenue Shortfall to be Recovered ($1,369,690) ($2,574,321) ($3,726,793) ($5,125,500) ($6,135,042) % Revenue Shortfall 8% 17% 27% 44% 60%
$ Increase per unit - July 1, 2023 $0.46 $0.95 $1.50 $2.35 $3.16

City of Brentwood / Water and Wastewater Rate Study 9

2. Overview

2.1. Introduction
In 2022, the City engaged Raftelis Financial Consultants, Inc. (Raftelis) to conduct a comprehensive Water and Wastewater Cost-of-Service study that could be utilized to evaluate and optimize user charges for the City’s water and wastewater services while ensuring a proportionate recovery of costs from the various user classes. This report documents the resultant findings, analyses, and recommendations.

The major objectives of the study include the following:
• Develop Financial Plans for the water and wastewater enterprises to ensure financial sufficiency, meet operation and maintenance (O&M) costs, ensure sufficient funding of City financial reserves, meet debt coverage requirements, and fund capital repairs and replacements (R&R). • Conduct a Cost-of-Service analysis for the water and wastewater systems. • Develop fair and equitable water and wastewater rates that adequately recover costs, provide revenue stability for recovering fixed costs, and maintain affordable service, and align with the requirements of Proposition 218.

2.2. Legal Requirements and Rate Setting Methodology
The water cost-of-service study was prepared using the principles established by the AWWA. AWWA “Principles of Water Rates, Fees, and Charges: Manual of Water Supply Practices M1 (seventh edition) (the “M1 Manual”). The wastewater cost-of-service study was prepared based on the principles established by the WEF and described in Financing and Charges for Wastewater Systems. The general principles of rate structure design and the objectives of the study are described below.

According to the M1 Manual, the first step in the ratemaking process is to determine the adequate and appropriate level of funding for a given utility. This is referred to as determining the “revenue requirement.” This analysis considers the short-term and long-term service objectives of the utility over a given planning horizon, including capital facilities, system operations and maintenance, and financial reserve policies, to determine the adequacy of a utility’s existing rates to recover its costs. A number of factors may affect these projections, including the number of customers served, water-use trends, extraordinary gains or expenses, weather, conservation, use restrictions, inflation, interest rates, capital finance needs, changes in tax laws, and other changes in operating and economic conditions.

After determining a utility’s revenue requirements, the next step is determining the cost-of-service. Utilizing a public agency’s approved budget, financial reports, operating data, and capital improvement plans, a cost-ofservice study generally categorizes the operating system costs by function (e.g., treatment, storage, pumping, distribution/collection, etc.). Asset costs are similarly functionalized to determine the cost-of-service.

After the assets and the costs of operating those assets are properly categorized by function, these “functionalized costs” are allocated first to cost causation components and then to the various customer classes (e.g., single-family residential, multi-family residential, and commercial) by determining the characteristics of those classes and the contribution of each to incurred costs such as base costs, peaking costs, delivery costs, service characteristics, and demand patterns for water and flow and strength for wastewater.

City of Brentwood / Water and Wastewater Rate Study 10
Rate design is the final part of the rate-making procedure and uses the revenue requirement and cost-ofservice analysis to determine appropriate rates for each customer class. Rates utilize “rate components” that build-up to rates for commodity charges, and rates for fixed charges, for the various customer classes and meter sizes servicing customers. In the case of inclining tier water rates, the rate components define the costof-service within each customer class, effectively treating each tier as a sub-class and determining the cost to serve each tier.

California Constitution – Article XIII D, Section 6 (Proposition 218) Proposition 218, reflected in the California Constitution as Article XIII D, was enacted in 1996 to ensure that rates and fees are reasonable and proportional to the cost of providing service. The principal requirements, as they relate to public water service are as follows:
• A property-related charge (such as water rates) imposed by a public agency on a parcel shall not exceed the costs required to provide the property related service. • Revenues derived by the charge shall not be used for any purpose other than that for which the charge was imposed.
• The amount of the charge imposed upon any parcel shall not exceed the proportional cost-of-service attributable to the parcel.
• No charge may be imposed for a service unless that service is actually used or immediately available to the owner of property.
• A written notice of the proposed charge shall be mailed to the record owner of each parcel at least 45 days prior to the public hearing, when the agency considers all written protests against the charge.

As stated in AWWA’s M1 Manual, “water rates and charges should be recovered from classes of customers in proportion to the cost of serving those customers.” Raftelis follows industry standard rate setting methodologies set forth by the AWWA M1 Manual to ensure this study aligns with Proposition 218 requirements and creates rates that do not exceed the proportionate cost of providing water services on a parcel basis. The methodology in the M1 Manual is a nationally recognized industry ratemaking standard which courts have recognized is consistent with Proposition 218.

California Constitution Article X, section 2 mandates that water resources be put to beneficial use and that the waste or unreasonable use of water be prevented through conservation. Section 106 of the Water Code declares that the highest priority use of water is for domestic purposes, with irrigation secondary. Thus, management of water resources is part of the property-related service provided by public water suppliers to ensure the resource is available over time. The City established inclining tiered (also known as inclining block) water rates to incentivize customers to conserve water. The inclining tier rates (as well as rates for uniform rate classes) need to be based on the proportionate costs incurred to provide water to customers to achieve compliance with Proposition 218.

Tiered Rates – “Inclining” tier rate structures (which are synonymous with “increasing” tier rate structures and “tiered” rates), when properly designed and differentiated by customer class, allow a water utility to send conservation price signals to customers. Due to heightened interest in water conservation and efficiency of water use, inclining tier water rates have gained widespread use, especially in relatively water-scarce regions like Southern California. Tiered rates meet the requirements of Proposition 218 as long as the tiered rates reasonably reflect the proportionate cost of providing service in each tier.

City of Brentwood / Water and Wastewater Rate Study 11

3. Water Rates
This section describes the long-range financial plan for the water utility, findings and results of the water rate study, a detailed discussion of the proposed water rates, and the customer impacts resulting from the proposed rates. It also includes a description of the water system, the determination of annual revenues required from rates, and a detailed discussion of the cost-of-service, which includes allocation of costs to water cost causation parameters and the determination of unit costs.

3.1. Water System Background
The City was incorporated in 1948 and provides potable water to approximately 21,500 connections serving a population of approximately 64,900. In FY 2022, the City supplied approximately 1,775 AF of water from the City’s wells, as well as an additional 9,429 AF of water from the City of Brentwood Treatment Plant (Brentwood TP) and the Randall Bold Water Treatment Plant (RBWTP). The City has a take-or-pay contract with Contra Costa Water District to receive water from the RBWTP. Potable water delivered to customers is a blend of City well water and treated surface water. Surface water originates in the Sierra Nevada mountains and is diverted from the Sacramento-San Joaquin Delta. The City’s water distribution system includes about 300 miles of water mains. Based on the City’s records, the cost of supplying water has increased during the recent drought due to reduced water usage and environmental and regulatory requirements. To meet water quality requirements, it has been necessary for the City to reduce its supply from groundwater wells and increase supply through the Brentwood TP, which is a more extensive and costly process.

Additionally, non-potable water is available in some areas of the City for irrigation. The City’s non-potable supply is untreated water pumped from the Sacramento-San Joaquin Delta by the East Contra Costa Irrigation District, as well as recycled water produced at the City’s Wastewater Treatment Plant (WWTP).

3.2. Water Account and Usage Assumptions
Table 3-1 shows the estimated number of water accounts by meter size for FY 2022 through FY 2028. Raftelis estimated the number of accounts by tabulating FY 2022 (actual) account data provided by the City and escalating the number of accounts based on account growth rates shown in Table 3-2. Account growth rates are based on the City’s General Plan population growth rates and are typically driven by new residential and nonresidential development. The number of accounts (meters) is used to forecast the fixed revenue the City will receive from the meter service charge.

City of Brentwood / Water and Wastewater Rate Study 12
Table 3-1: Projected Water Accounts by Meter Size
Table 3-2: Water Account Growth
Table 3-3 shows actual water use in FY 2022 and projected water use for FY 2023 through FY 2028 by customer class. The revenue calculated in each fiscal year in the Water Enterprise Financial Plan is a function of the number of meters, meter size, account growth, water use, and existing rates. The rate study determines water rates for the next five years based on usage assumptions for FY 2024 through FY 2028.

Table 3-3: Projected Water Use by Customer Class
Actual Projected Projected Projected Projected Projected Projected FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 5/8" or 3/4" 7,920 8,016 8,122 8,193 8,222 8,255 8,289
1" 12,568 12,720 12,888 13,001 13,046 13,100 13,153
1 1/2" 247 250 253 255 256 257 258
2" 454 459 465 469 470 472 474
3" 42 42 43 43 43 43 43
4" 35 35 36 36 36 36 36
6" 11 11 11 11 11 11 11
Total Meters 21,277 21,534 21,817 22,008 22,085 22,175 22,266 Fiscal Year Account Growth
FY 2023 1.21%
FY 2024 1.32%
FY 2025 0.88%
FY 2026 0.35%
FY 2027 0.41%
FY 2028 0.41%
Water Use (kgal) Tier Limit (kgal) FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Residential
Tier 1 5 1,145,110 1,158,966 1,174,264 1,184,598 1,188,744 1,193,618 1,198,511 Tier 2 14 935,560 946,880 959,379 967,822 971,209 975,191 979,189 Tier 3 20 220,956 223,630 226,581 228,575 229,375 230,316 231,260 Tier 4 21+ 210,382 212,928 215,738 217,637 218,398 219,294 220,193 Subtotal Residential 2,512,008 2,542,403 2,575,963 2,598,631 2,607,727 2,618,418 2,629,154 Non-Residential
Tier 1 5 45,908 46,463 47,077 47,491 47,657 47,853 48,049 Tier 2 6+ 631,542 639,184 647,621 653,320 655,607 658,295 660,994 Subtotal Non-Residential 677,450 685,647 694,698 700,811 703,264 706,147 709,042 Hydrant 9,893 9,893 9,893 9,893 9,893 9,893 9,893
Subtotal Hydrant 9,893 9,893 9,893 9,893 9,893 9,893 9,893 Non-Potable 475,961 479,924 484,299 487,254 488,440 489,834 491,233 TOTAL USAGE 3,675,312 3,717,867 3,764,852 3,796,590 3,809,323 3,824,292 3,839,323

City of Brentwood / Water and Wastewater Rate Study 13

3.3. Inflationary and Other Assumptions
This subsection describes the assumptions used in projecting operating and capital expenses that determine the overall revenue adjustments required to ensure the financial stability of the City’s water enterprise.

Revenue adjustments represent the average increase in rates for the City as a whole. Note that rate changes for individual classes will depend upon the cost of service and actual volume of water used.

To ensure that future costs are reasonably projected, it is necessary to make informed assumptions about inflationary factors, water costs, and use. Non-rate revenue and O&M projections are based on the City’s FY 2024 projections and projected budgetary increases in FY 2025 through FY 2028. The City uses inflation factors that are indicative of industry increases for different expenditures within the budget, such as personnel, supplies, or fuel, to capture the impact of market forces over time. On average, the O&M costs are increasing by approximately 6.7 percent per year throughout the study period.

3.4. Water Enterprise Financial Plan
The assumptions discussed above were incorporated into the Water Enterprise Financial Plan. To develop the Water Enterprise Financial Plan, Raftelis projected annual expenses and revenues and modeled reserve balances, capital expenditures, and calculated debt service coverage ratios to estimate the additional rate revenue needed per year. This section of the report discusses O&M expenses, the Capital Improvement Plan (CIP), reserve funding, projected revenue under existing rates, and the revenue adjustments needed to ensure the fiscal sustainability and solvency of the City.

3.4.1. Revenue Requirement
A utility’s yearly revenue requirement is the yearly revenue needed to operate, maintain, and ensure fiscal solvency. The revenue requirement includes O&M expenses, rate funded capital expenditures, debt service payments, and reserve requirements (funding for reserves). The basis of the expenses is the City’s Fiscal Model, Operating Budget, and 5-year Capital Improvement Program.

3.4.1.1. O&M Expenses
The water enterprise’s projected O&M expenses are shown in Table 3-4. The Water Enterprise Financial Plan study period is from FY 2024 to FY 2028. O&M expenses include the cost of purchased surface water, operating and maintaining groundwater wells, treatment, distribution facilities, meter reading, billing, and providing non-potable water service. Table 3-4 summarizes the projected O&M expenses in two different ways: by function and by type of expenditures.

City of Brentwood / Water and Wastewater Rate Study 14
Table 3-4: Projected Water Enterprise O&M Expenses

3.4.1.2. Capital Improvement Plan
Table 3-5 shows the City’s CIP for FY 2024 through FY 2028, which totals approximately $14.5 million. The projects will be funded through rates.

Table 3-5: Detailed Water Enterprise Capital Improvement Plan – Inflated

3.4.1.3. Debt Service
The City is not planning to issue any additional debt during this planning period. Table 3-6 shows the existing debt service payments for the Brentwood Water Treatment Plant through FY 2028. Annual debt service payments for the planning period average $2.6 million per year.

FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Supply (Surface Water) $12,090,971 $13,346,276 $14,623,678 $16,040,219 $17,601,689 Production (Wells) $2,503,519 $2,508,820 $2,618,302 $2,723,505 $2,817,856 Treatment $2,290,824 $2,364,865 $2,468,278 $2,555,455 $2,633,662 Distribution $5,050,248 $5,201,047 $5,437,186 $5,668,924 $5,876,841 Utility Billing $2,309,529 $2,290,399 $2,374,965 $2,456,881 $2,532,452 Non-Potable $520,812 $575,329 $598,564 $620,562 $640,287 TOTAL O&M EXPENSES $24,765,904 $26,286,736 $28,120,973 $30,065,545 $32,102,787 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Personnel Services $5,299,485 $5,560,988 $5,844,235 $6,136,887 $6,388,621 Supplies and Services $14,924,939 $16,404,931 $17,800,688 $19,312,016 $20,958,511 Other Supplies and Services $2,012,975 $2,089,267 $2,173,046 $2,244,757 $2,315,691 Internal Service $1,126,872 $1,271,592 $1,315,964 $1,358,963 $1,403,393 Capital Outlay $880,821 $384,629 $388,476 $392,360 $396,284 Non-Potable $520,812 $575,329 $598,564 $620,562 $640,287 Internal Service $24,765,904 $26,286,736 $28,120,973 $30,065,545 $32,102,787 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Fund #562 - Water
80466.00 Transfer to 2015 Lease Revenue Bond $189,725 $188,312 $180,365 $172,695 $150,792 80562.00 Transfer To Water Capital Proj $390,000 $508,000 $344,000 $0 $0 80562.00 Trf To Water CIP - WWTP Admin Lab bldg (Water & WW Lab) $340,000 $860,000 $0 $0 $0 80562.00 Trf to Water CIP - Corp Yard General $0 $600,000 $0 $0 $0 80562.00 Trf to Water CIP - Corp Yard to remain $0 $500,000 $0 $0 $0 80562.00 O'Hara Ave./Lone Tree Way Water Upgrade $0 $55,000 $618,250 $0 $0 80562.00 Trf To Water CIP - Water Storage Capacity at Los Vaqueros $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 WTP Security Improvements $0 $223,000 $344,000 $0 $0
Waterline Imp - Kent Dr $335,000 $0 $0 $0 $0
Zone 2 Reduced Water Pressure Zone $0 $535,000 $0 $0 $0 WTP Expansion $0 $0 $1,000,000 $1,000,000 $1,000,000
Total Water CIP $2,254,725 $4,469,312 $3,486,615 $2,172,695 $2,150,792

City of Brentwood / Water and Wastewater Rate Study 15
Table 3-6: Water Enterprise Debt Service Payments

3.4.1.4. Proposed Financial Plan and Revenue Adjustments The proposed revenue adjustments help ensure adequate revenue to fund operating expenses, capital expenditures, and compliance with bond covenants. The Financial Plan model assumes the revenue adjustments occur on July 1 of each year. The proposed revenue adjustments would enable the City to execute the CIP shown in Table 3-5 and comply with its debt service coverage requirements over the study period.

Table 3-7 shows the proposed revenue adjustments for FY 2024 through FY 2028. These increases are needed to finance the operating and capital expenses and reserves funding.

Table 3-7: Proposed Water Revenue Adjustments
Fiscal Year Effective Date Revenue Adjustment
FY 2024 July 1, 2023 6.5%
FY 2025 July 1, 2024 6.5%
FY 2026 July 1, 2025 6.5%
FY 2027 July 1, 2026 6.5%
FY 2028 July 1, 2027 6.5%
Table 3-8 shows the cash flow detail over the next five years.

Fund 560 Only FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Water Revenue Refunding Bonds Series 2014
Principal $1,437,096 $1,547,096 $1,647,096 $1,102,096 $1,187,096 Interest $1,398,560 $1,296,060 $1,188,060 $1,075,060 $989,310 Total Debt Service $2,835,656 $2,843,156 $2,835,156 $2,177,156 $2,176,406

City of Brentwood / Water and Wastewater Rate Study 16
Table 3-8: Proposed Water Enterprise Cash Flow
Table 3-9 shows the calculated debt coverage calculations for primary and secondary debt coverage requirements. The City’s debt service payments are shared proportionately between the water enterprise fund and the development impact fee fund when the funded capital project or facility provides service to both existing rate payers and new development. To calculate the City’s primary debt coverage ratios, the total revenue, including the development impact fee revenue, and the total debt service payments are included. The City’s primary debt coverage requirement is 125 percent for the water utility. To calculate the City’s secondary debt coverage ratios, total debt service payments are included, but development impact fee revenue is excluded from total revenue. The City’s secondary debt coverage requirement is 100 percent for the water utility. The City meets and exceeds its primary and secondary debt coverage requirements throughout the study period.

Potable Water FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Revenue at Current Rates $27,743,954 $27,986,676 $28,084,063 $28,198,544 $28,313,494 Additional Revenue:

Fiscal Revenue Month
Year Adjustments Effective
2024 6.5% July $1,803,357 $1,819,134 $1,825,464 $1,832,905 $1,840,377 2025 6.5% July $1,937,378 $1,944,119 $1,952,044 $1,960,002 2026 6.5% July $2,070,487 $2,078,927 $2,087,402
2027 6.5% July $2,214,057 $2,223,083
2028 6.5% July $2,367,583
Additional Rate Revenue $1,803,357 $3,756,512 $5,840,070 $8,077,934 $10,478,447 Total Rate Revenue $29,547,311 $31,743,188 $33,924,133 $36,276,478 $38,791,941 Current Services $292,964 $294,632 $299,151 $303,839 $308,169 Other Revenue $338,109 $351,212 $362,990 $375,362 $388,162 Standby Charges $38,616 $38,230 $37,848 $37,469 $37,094 Operating Transfers $350,000 $350,000 $350,000 $350,000 $350,000 Transfers from WW Fund for Water Supply Costs $0 $0 $0 $0 $0 Interest Income $78,613 $232,109 $189,230 $182,349 $203,794 TOTAL REVENUE $30,645,613 $33,009,371 $35,163,352 $37,525,497 $40,079,160 O&M Expenses
Supply (Surface Water) $12,090,971 $13,346,276 $14,623,678 $16,040,219 $17,601,689 Production (Wells) $2,503,519 $2,508,820 $2,618,302 $2,723,505 $2,817,856 Treatment $2,290,824 $2,364,865 $2,468,278 $2,555,455 $2,633,662 Distribution $5,050,248 $5,201,047 $5,437,186 $5,668,924 $5,876,841 Utility Billing $2,309,529 $2,290,399 $2,374,965 $2,456,881 $2,532,452 Transfer to Capital R&R (@80% of book depr. exp.) $2,686,296 $2,817,722 $2,817,722 $2,927,106 $2,927,106 Existing Debt Service $2,835,656 $2,843,156 $2,835,156 $2,177,156 $2,176,406 Proposed Debt Service $0 $0 $0 $0 $0
Rate Funded Capital Projects* $2,254,725 $4,469,312 $3,486,615 $2,172,695 $2,150,792 Reserve Funding $0 $0 $0 $0 $0
TOTAL EXPENSES $32,021,769 $35,841,597 $36,661,902 $36,721,940 $38,716,804 Net Cash Flow ($1,376,156) ($2,832,225) ($1,498,550) $803,557 $1,362,356 *Non-potable water is responsible for a portion of the capital costs. Potable capital costs, in addition to non-potable capital costs, represent the total Capital Improvement Plan.

City of Brentwood / Water and Wastewater Rate Study 17
Table 3-9: Water Enterprise Debt Coverage Calculation
The next four figures display the Financial Plan in graphical format. Figure 3-1 shows the modeled revenue adjustments (blue bars) for the next five years on the left-hand axis. The green and red lines on the right-hand axis show the calculated and required primary debt coverage requirements. The solid lines pertain to the primary debt coverage requirement and the dashed lines to the secondary requirement.

Figure 3-1: Proposed Water Enterprise Revenue Adjustments and Debt Coverage Ratios Figure 3-2 graphically illustrates the Water Enterprise Financial Plan – it compares existing and proposed revenues with projected expenses. The expenses include water supply, O&M, debt service, capital costs, and reserves transfers shown by the stacked bars. The horizontal orange and blue lines show total revenues at Debt Coverage Calculation FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Projected Facility Fees Revenue $3,509,850 $3,517,350 $3,509,350 $2,851,350 $2,850,600 Projected Non-Potable Revenue $520,812 $575,329 $598,564 $620,562 $640,287 Projected Water Revenue $30,645,613 $33,009,371 $35,163,352 $37,525,497 $40,079,160 Non-Potable O&M Expenses $520,812 $575,329 $598,564 $620,562 $640,287 Water O&M Expenses (no depr.) $24,245,092 $25,711,407 $27,522,409 $29,444,983 $31,462,500 Total Debt Service $3,509,850 $3,517,350 $3,509,350 $2,851,350 $2,850,600 Primary Requirement
Calculated Debt Coverage 282% 307% 318% 383% 402%
Required Debt Coverage 125% 125% 125% 125% 125%
Secondary Requirement
Calculated Debt Coverage 182% 207% 218% 283% 302%
Required Debt Coverage 100% 100% 100% 100% 100%
0%
50%
100%
150%
200%
250%
300%
350%
0%
1%
2%
3%
4%
5%
6%
7%
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rev Adj Revenue Adjustments & Debt Coverage Debt Covg
Revenue Adjustments Primary Debt Coverage - Calc
Primary Debt Coverage - Reqd Secondary Debt Coverage - Calc Secondary Debt Coverage - Reqd

City of Brentwood / Water and Wastewater Rate Study 18
existing and proposed rates, respectively. Current revenue from existing rates, in orange, does not meet future total expenses and clearly demonstrates the need for revenue adjustments.

Figure 3-2: Proposed Potable Water Financial Plan
Figure 3-3 summarizes the projected CIP to be funded by water rates.

Figure 3-3: Projected Water Enterprise Capital Projects Figure 3-4 displays the resulting fund balance for the water utility. The red line represents the total current target, which is equal to 30 percent of annual operating expenses and debt service payments, based on Budget and Fiscal Policy 2.7.3, adopted June 22, 2021.
($10)
$0
$10
$20
$30
$40
$50
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Potable Water Financial Plan
Water Supply O&M Expenses Debt Service Capital PAYGO
Reserves Transfer Rev - Current Rev - Proposed
$2.3
$4.5
$3.5
$2.2 $2.2
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Capital Financing Plan
Bond Funded CIP Rate Funded CIP

City of Brentwood / Water and Wastewater Rate Study 19
Figure 3-4: Water Enterprise Total Cash Balance
Table 3-10 shows the projected cash balance for the water enterprise using the City’s projected beginning balance for FY 2024. This table corresponds with Figure 3-4.

Table 3-10: Projected Water Enterprise Cash Balance

3.5. Water Cost-of-Service Analysis
A cost-of-service analysis distributes a utility’s revenue requirements (costs) to each customer class in proportion to the service received. After determining a utility’s revenue requirements, the next step in a costof-service analysis is to functionalize its O&M costs as follows:
• Supply (Surface Water) – represents the cost of purchasing surface water and production from groundwater wells
• Treatment – represents the cost of treating the water • Storage – represents the cost of the reservoirs
• Distribution – represents the operating and maintenance cost of the water distribution system • Utility Billing – represents the costs associated with billing and customer service • Non-Potable – represents the cost of operating and maintaining the non-potable water system The functionalization of costs allows us to better allocate the functionalized costs to the cost causation components. The cost causation components include:
• Supply – costs associated with providing water supply to all customers $13.1M
$10.3M
$8.8M
$9.6M
$11.0M
$0
$2
$4
$6
$8
$10
$12
$14
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions
Water Fund Balance
Total Funds Current Target incl 30% Reserve
Water Fund FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Beginning Balance $14,513,780 $13,137,625 $10,305,399 $8,806,849 $9,610,406 Net Cash Flow ($1,376,156) ($2,832,225) ($1,498,550) $803,557 $1,362,356 Ending Balance $13,137,625 $10,305,399 $8,806,849 $9,610,406 $10,972,762

City of Brentwood / Water and Wastewater Rate Study 20
• Base Delivery costs – costs associated with providing service under average conditions • Peaking costs (maximum day and maximum hour) – costs that are associated with meeting the peak demand in excess of the average rate of use
• Fire flow capacity – costs associated with providing capacity within the water system to supply water to public fire hydrants and private fire sprinkler systems. Fire sprinkler systems are required for all new residential and nonresidential structures per California Building Standards Codes. • Meter service – costs associated with maintenance and capital costs of meters and services • Billing and customer service – costs incurred to provide billing and customer service • General and administrative costs – costs that cannot be specifically allocated to one of the other cost causation components
Peaking costs are further divided into maximum day and maximum hour demand. The maximum day demand is the maximum amount of water used in a single day in a year. The maximum hour demand is the maximum usage in an hour on the maximum usage day. Different facilities, such as distribution and storage facilities (and the O&M costs associated with those facilities), are designed to meet the peaking demands of customers. Therefore, extra capacity1 costs include the O&M and capital costs associated with meeting peak customer demand. This method is consistent with the AWWA M1 Manual and is widely used in the water industry to perform cost-of-service analyses.

3.5.1. Allocation of Functionalized Expenses to Cost Components After functionalizing expenses, the next step is to allocate the functionalized expenses to cost causation components. To do so we must identify system wide peaking factors, which were provided by the City and are shown in Error! Reference source not found.. The system-wide peaking factors, based on the City March 2006 Water Master Plan, are used to derive the cost component allocation bases (i.e., percentages) shown in Table 3-11. Functionalized expenses are then allocated to the cost components using these allocation bases.

To understand the interpretation of the percentages, we must first establish the base use as the average daily demand during the year.

Table 3-11: System-Wide Peaking Factors and Allocation to Cost Causation Components Source: City of Brentwood Water Master Plan
To determine the relative proportion of costs to assign to Base Delivery, Max Day and Max Hour, allocations are calculated based on these factors. Cost components that are related to the provision of average day demand (ADD), such as source of supply, are allocated 100 percent to Base Delivery. Cost components that are designed to meet Max Day peaks, such as reservoirs and transmission facilities, are allocated to Base Delivery and Max Day factors. Since facilities such as reservoirs and distribution systems are also designed to provide capacity for fire supply, an allocation is also provided for fire flow, which is subtracted from the Base Delivery and Max Day components. The Max Day allocation is as follows:
1 The terms extra capacity, peaking and capacity costs are used interchangeably.

Factor Base Delivery Max Day Max Hour Fire
Base 1.00 100% 0% 0% 0%
Max Day 2.10 43% 47% 0% 10%
Max Hour 4.00 22% 24% 44% 10%

City of Brentwood / Water and Wastewater Rate Study 21
Base Delivery: 43% = (1.00/2.10) x 100 – 5% (half the fire allocation) Max Day: 47% = (2.10-1.00)/2.10 x 100 – 5% (half the fire allocation) Fire: 10%
The fire allocation is based on Insurance Services Office (ISO) standard. Cost components such as those related to the distribution system that are designed for Max Hour peaks are allocated similarly. The allocation of Max Hour facilities is shown below:

Base Delivery: 22% = (1.00/4.00) x 100 – 3.33% (1/3 fire allocation) Max Day: 24% = (2.10-1.00)/4.00 x 100 – 3.33% (1/3 fire allocation) Max Hour: 44% = (4.00-2.10)/4.00 x 100 – 3.33% (1/3 fire allocation) Fire: 10%
Collectively the maximum day and hour cost components are known as peaking costs. These allocation bases are used to assign the functionalized costs to the cost causation components.

In the absence of daily and hourly peaking factors, we use monthly peaks for the different customer classes.

For the analysis to spread the costs among the different classes equitably, it is important to get the relative ratios of the peaks, which are provided by the monthly peaks. Table 3-12 shows the derivation of the peaking factors by customer class and tier by dividing the total maximum monthly usage by the average monthly usage for each customer class and tier based on monthly water usage records provided by the City. These peaking factors are used to allocate the peaking costs to each customer class and tier in the rate derivation section.

Table 3-12: Peaking Factors by Customer Class
To allocate meter-related costs appropriately, the concept of equivalent meters needs to be understood. By using equivalent meters instead of a straight meter count, the analysis accounts for the fact that larger meters impose greater demands and are more expensive to install, maintain, and replace than smaller meters and commit a greater capacity in the system. Equivalent meters are used in calculating meter service and capacity costs.

Customer Proposed Tiers Max Monthly Average Monthly Peaking Specific Kgal Kgal Kgal Factor
Residential 295,504 209,334 1.41
Tier 1 5 101,409 95,426 1.06
Tier 2 14 118,116 77,963 1.52
Tier 3 20 36,373 18,413 1.98
Tier 4 21+ 39,606 17,532 2.26
Non-Residential 90,866 56,454 1.61
Tier 1 5 4,274 3,826 1.12
Tier 2 6+ 86,592 52,629 1.65
Hydrant 3,032 824 3.68

City of Brentwood / Water and Wastewater Rate Study 22
Equivalent meters are based on meter hydraulic capacity. Equivalent meters represent the potential demand on the water system in terms of the base or smallest meter size. A ratio of hydraulic capacity is calculated by dividing large meter capacities by the base meter capacity. The base meter is the smallest meter, in our case, a 3/4-inch meter. The actual number of meters by size is multiplied by the corresponding capacity ratio to calculate equivalent meters. The capacity ratio is calculated using the meter capacity in gallons per minute (gpm) provided in the AWWA M1 Manual (7th Edition). Table 3-13 shows the equivalent meters for FY 2024.

Table 3-13: Equivalent Meters
Table 3-14 allocates the O&M expenses and asset values to each cost component. The functional costs are allocated according to industry standards based on the nature of the water function. For example: water supply and production costs are allocated 100 percent to the Supply component. Treatment costs are allocated on the basis of Max Day because plants are designed to meet Max Day demand. Distribution costs are allocated on the basis of Max Hour and fire supply because distribution systems are designed to meet instantaneous peaks (Max hour) and fire flow requirements. Utility billing costs are allocated 100 percent to the Customer component. Some costs, which cannot be readily classified into one of the functions, are allocated to General and then spread amongst all the other cost causation components proportionate to the overall cost allocation.

Capacity AWWA Number of Equivalent
Meter Size (gpm) Ratio Meters Meters
5/8" or 3/4" 30 1.0 8,122 8,122
1" 50 1.7 12,888 21,479
1 1/2" 100 3.3 253 843
2" 160 5.3 465 2,480
3" 350 11.7 43 500
4" 630 21.0 36 752
6" 1300 43.3 11 488
Total 21,817 34,663

City of Brentwood / Water and Wastewater Rate Study 23
Table 3-14: Allocation of Functionalized O&M and Capital Expenses to Cost Causation Components - Water
Table 3-14Error! Reference source not found. shows the total resulting cost causation component allocation for O&M expenses. This resulting allocation is used to allocate the City’s operating revenue requirement to the cost causation components.

Table 3-14 also shows the total allocation for the City’s assets, which are used to allocate the capital costs.

The resulting total asset allocation is derived in a similar manner as the O&M allocation - first, Raftelis functionalized the City’s assets and then allocated them to the cost causation components based upon asset function and utilization resulting in the asset total allocation shown at the bottom of Table 3-14. The capital costs are allocated on the basis of assets because the capital costs are used to replace assets, and in the long term all assets need to be replaced. This allocation method also provides a more stable allocation of capital costs, which can vary significantly from year-to-year both in size and in function.

O&M Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Supply (Surface Water) 100% 100%
Production (Wells) 100% 100%
Treatment 48% 52% 100%
Distribution 22% 24% 44% 10% 100%
Utility Billing 100% 100%
Transfer to Capital R&R 36% 37% 18% 6% 1% 2% 100%
O&M Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Supply (Surface Water) $12,090,971 $0 $0 $0 $0 $0 $0 $0 $0 $12,090,971 Production (Wells) $2,503,519 $0 $0 $0 $0 $0 $0 $0 $0 $2,503,519 Treatment $0 $1,090,869 $1,199,956 $0 $0 $0 $0 $0 $0 $2,290,824 Distribution $0 $1,094,220 $1,220,477 $2,230,526 $505,025 $0 $0 $0 $0 $5,050,248 Utility Billing $0 $0 $0 $0 $0 $0 $0 $2,309,529 $0 $2,309,529 Transfer to Capital R&R $0 $977,032 $987,766 $490,392 $151,322 $0 $19,924 $0 $59,861 $2,686,296 TOTAL O&M EXPENSES $14,594,490 $3,162,121 $3,408,198 $2,720,918 $656,347 $0 $19,924 $2,309,529 $59,861 $26,931,388 TOTAL O&M Allocation, % 54.2% 11.7% 12.7% 10.1% 2.4% 0.0% 0.1% 8.6% 0.2% 100% Capital Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Land 100% 100%
Well 100% 100%
Reservoir 43% 47% 10% 100%
Distribution 22% 24% 44% 10% 100%
Transmission 43% 47% 10% 100%
Buildings 100% 100%
Machinery & Equipment 100% 100%
Vehicles 100% 100%
Pumps 48% 52% 100%
Treatment Plant 48% 52% 100%
Non-Potable
Capital Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Land $0 $0 $0 $0 $0 $0 $0 $0 $62,556 $62,556
Well $0 $4,925,469 $0 $0 $0 $0 $0 $0 $0 $4,925,469
Reservoir $0 $4,470,940 $4,970,486 $0 $1,049,047 $0 $0 $0 $0 $10,490,474 Distribution $0 $14,062,805 $15,685,436 $28,666,486 $6,490,525 $0 $0 $0 $0 $64,905,252 Transmission $0 $5,566,622 $6,188,591 $0 $1,306,135 $0 $0 $0 $0 $13,061,348 Buildings $0 $0 $0 $0 $0 $0 $0 $0 $3,436,693 $3,436,693 Machinery & Equipment $0 $0 $0 $0 $0 $0 $1,164,664 $0 $0 $1,164,664 Vehicles $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pumps $0 $1,191,739 $1,310,913 $0 $0 $0 $0 $0 $0 $2,502,653 Treatment Plant $0 $26,896,087 $29,585,696 $0 $0 $0 $0 $0 $0 $56,481,783 TOTAL ASSETS $0 $57,113,662 $57,741,123 $28,666,486 $8,845,707 $0 $1,164,664 $0 $3,499,249 $157,030,892 Total Asset Allocation, % 0% 36.4% 36.8% 18.3% 5.6% 0.0% 0.7% 0.0% 2.2% 100%

City of Brentwood / Water and Wastewater Rate Study 24

3.5.2. Revenue Requirement Determination
Table 3-15 shows the revenue requirement derivation with the total revenue required from rates. The totals shown in the “Operating” and “Capital” columns are the total O&M and capital revenue requirements, respectively. The total is the rate revenue to be collected through rates. This operating and capital revenue requirement will be allocated to the cost causation components using the allocation percentages shown in Table 3-14 to determine unit costs.

Table 3-15: Water Revenue Requirement Determination
Raftelis calculated the revenue requirement using FY 2024 expenses, which include O&M expenses, rate funded capital expenses, and existing and proposed debt service. To arrive at the rate revenue requirement, we subtract revenue offsets from other expenses and adjust for annual cash balances (transfers to or from reserves). The adjustments are added to arrive at the net revenue requirement from rates. This is the amount that fixed charge and commodity rates are designed to collect.

3.5.3. Unit Cost Component Derivation
Our end goal is to proportionately distribute the cost causation components to each user class. To do so we must calculate the cost causation component unit costs, which starts by assessing the total service units demanded by each class for each cost causation component. This is shown in Table 3-16Error! Reference source not found.. The capacity or peaking factor for each customer class is taken from Table 3-12. The total equivalent meters are from Table 3-13.

FY 2024 Operating Capital Total
Revenue Requirements
O&M Expenses $24,245,092 $24,245,092
Transfer to Capital R&R $2,686,296 $2,686,296
Existing Debt Service $2,835,656 $2,835,656
Rate Funded Capital Projects $2,254,725 $2,254,725
Reserve Funding $0 $0
Total Revenue Requirements $26,931,388 $5,090,381 $32,021,769 Less: Revenue Offsets
Current Services $292,964 $292,964
Other Revenue $338,109 $338,109
Standby Charges $38,616 $38,616
Operating Transfers $350,000 $350,000
Interest Income $78,613 $78,613
Total Revenue Offsets $1,059,686 $38,616 $1,098,302
Adjustments
Transfer to (from) Reserves ($1,376,156) ($1,376,156)
Total Adjustments $0 ($1,376,156) ($1,376,156)
Net Revenue Requirement from Rates $25,871,702 $3,675,609 $29,547,311

City of Brentwood / Water and Wastewater Rate Study 25
Table 3-16: Derivation of Service Units - Water
Table 3-17 shows the cost causation component unit cost derivation. The operating revenue requirement shown in Table 3-15 is allocated to the cost causation components using the total O&M allocation from Table 3-14. Similarly, the capital revenue requirement in Table 3-15 is allocated to the cost causation components using the total asset allocation from Table 3-14. General and Administrative costs, which cannot be tied to a specific function, are redistributed in proportion to the resulting allocation of the other cost causation components, except Supply. The Fire cost component represents capacity available in the water system to supply water flow for fire protection and is reallocated to the meter component since all customers share in this capacity cost. To provide revenue stability, a portion of the extra capacity costs is allocated to the meter component to collect approximately 34 percent of the rate revenue from fixed charges. This also covers the City’s fixed costs that are not dependent upon water volume. The total adjusted cost-of-service is divided by the units of service to calculate the unit cost. For example, the unit cost for the base component is determined by dividing the total base cost by total water use in kgal. For another example, annual billing and customer service costs are divided by the estimated number of monthly bills in a year. The unit costs are used to distribute the cost causation components to the customer classes.

Table 3-17: Unit Cost Calculation - Water

3.5.4. Distribution of Cost Causation Components to Customer Classes The final step in a cost-of-service analysis is to distribute the cost causation components to the user classes using the unit costs derived in Table 3-17 to arrive at the cost to serve each customer class. The classes are categorized based on similar land use and water usage habits. Table 3-18 shows the derivation of the cost to serve (i.e., cost-of-service for) each class. The Supply, Base Delivery, Max Day, and Max Hour cost components are collected through the commodity (volumetric) rates ($/kgal) for potable water. The Meter Annual Average Capacity Total Extra Capacity Total Extra No. of No. of Monthly Use Daily Use Factor Capacity Capacity Factor Capacity Capacity Meters Bills Tiers (kgal) (kgal) (kgal/day) (kgal/day) (kgal/day) (kgal/day) (kgal/day) ( Equiv.) (No.) Residential
Tier 1 5 1,174,264 3,217 1.06 3,410 193 2.02 6,496 3,085 Tier 2 14 959,379 2,628 1.52 3,995 1,367 2.90 7,610 3,615 Tier 3 20 226,581 621 1.98 1,229 608 3.77 2,341 1,112
Tier 4 21+ 215,738 591 2.26 1,336 745 4.30 2,544 1,209
Non-Residential
Tier 1 5 47,077 129 1.12 144 15 2.13 275 131
Tier 2 6+ 647,621 1,774 1.65 2,928 1,153 3.14 5,576 2,649 Hydrant 9,893 27 3.68 100 73 7.01 190 90
TOTAL 3,280,554 4,154 11,891 34,663 261,803
Maximum Day Requirements Maximum Hour Requirements
Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Operating Expenses $14,020,232 $3,037,699 $3,274,094 $2,613,856 $630,521 $0 $19,140 $2,218,654 $57,506 $25,871,702 Capital Expenses $0 $1,336,855 $1,351,542 $670,994 $207,051 $0 $27,261 $0 $81,907 $3,675,609 Total Cost of Service $14,020,232 $4,374,554 $4,625,635 $3,284,851 $837,572 $0 $46,401 $2,218,654 $139,412 $29,547,311 Allocation of General Cost $39,633 $41,908 $29,761 $7,588 $0 $420 $20,101 ($139,412) $0 Allocation of Public Fire Protection Cost ($845,160) $845,160 $0 Allocation of Peaking Cost to Meter ($4,247,465) ($3,016,296) $7,263,761 $0 Total Adjusted Cost of Service $14,020,232 $4,414,187 $420,079 $298,315 $0 $0 $8,155,742 $2,238,755 $0 $29,547,311 Unit of Service 3,280,554 3,280,554 4,154 11,891 34,663 261,803 Unit kgal kgal kgal/day kgal/day equiv meters bills
Unit Cost $4.27 $1.35 $101.12 $25.09 $19.61 $8.55

City of Brentwood / Water and Wastewater Rate Study 26
and Customer cost components are collected through the City’s monthly meter service charge, thereby providing fixed revenue. The proposed fixed revenue from rates is retained at approximately 34 percent to match the current fixed revenue.

Table 3-18: Allocation of Cost to Customer Class – Water To derive the variable cost to serve each class, the unit costs from Table 3-17 are multiplied by the corresponding service units shown in Table 3-16 for each customer class. For example, the supply cost for the residential class is calculated by multiplying the supply unit cost ($4.27 per kgal) by the annual residential use in each tier (Table 3-16). Similar calculations for each of the remaining user classes and tiers and cost components yield the total variable cost to serve each user class shown in Table 3-18. Costs charged to meters, including meter and customer costs, are applied to customers based on their meter size. Note that the total cost-of-service is equal to the revenue requirement in Table 3-15, as intended. We have now calculated the cost to serve each user class and can proceed to design rates to collect the cost to serve each class.

Table 3-16 through Table 3-17 are reproduced in Appendix A in a larger font format.

3.6. Water Rate Design

3.6.1. Existing Rate Structure and Rates
The City’s existing rate structure consists of a monthly base charge, which is a fixed charge determined by the size of the meter serving a property. In addition, the City has a four-tiered commodity rate structure for residential customers and a two-tiered rate structure for non-residential customers. Residential customers that include an Accessory Dwelling Unit (“ADU”), in addition to the main dwelling unit, are charged at a MultiFamily rate. ADUs with water use that is separately metered are billed separately from the main dwelling unit at a Single Family rate. Non-potable water customers and customers using water from hydrants, typically for construction purposes, have a uniform rate. Table 3-19 shows the existing rate structure and rates.

Supply Base Delivery Max Day Max Hour Meter Customer TOTAL Residential
Tier 1 $5,018,499 $1,580,045 $19,519 $77,408 $6,695,471 Tier 2 $4,100,136 $1,290,904 $138,207 $90,688 $5,619,935 Tier 3 $968,350 $304,879 $61,516 $27,900 $1,362,646
Tier 4 $922,009 $290,289 $75,307 $30,322 $1,317,927
Non-Residential
Tier 1 $201,194 $63,345 $1,565 $3,279 $269,383
Tier 2 $2,767,763 $871,414 $116,620 $66,454 $3,822,250
Hydrant $42,280 $13,312 $7,345 $2,264 $65,201
Base Meters $8,155,742 $2,238,755 $10,234,855
TOTAL $14,020,232 $4,414,187 $513,430 $364,607 $7,996,099 $2,238,755 $29,547,311

City of Brentwood / Water and Wastewater Rate Study 27
Table 3-19: Existing Monthly Water Rates

3.6.2. Proposed Monthly Fixed Charge
Table 3-20 shows the derivation of the monthly base charge. The unit costs derived in Table 3-17 feed into the meter charge derivation, as the meter charge is designed to collect the amount of revenue shown in the “Meter” and “Customer” columns of Table 3-20.

Table 3-20: Derivation of the Monthly Fixed Charge
Current
Monthly Base Rate
Meter Size
5/8" or 3/4" $27.61
1" $39.03
1 1/2" $67.61
2" $101.90
3" $210.52
4" $295.65
6" $753.55
Commodity Rate ($/kgal)
Residential Monthly (kgal)
Tier 1 5 $3.28
Tier 2 14 $6.31
Tier 3 20 $7.41
Tier 4 21+ $7.64
Non-Residential
Tier 1 5 $3.39
Tier 2 6+ $6.87
Hydrant $6.87
Non-Potable $1.60
Meter Size Meter Ratio Meter Customer/
Billing Total Charges Current Charges Difference
5/8" or 3/4" 1.00 $19.61 $8.55 $28.16 $27.61 2%
1" 1.67 $32.68 $8.55 $41.24 $39.03 6%
1 1/2" 3.33 $65.36 $8.55 $73.91 $67.61 9%
2" 5.33 $104.57 $8.55 $113.13 $101.90 11%
3" 11.67 $228.75 $8.55 $237.31 $210.52 13%
4" 21.00 $411.76 $8.55 $420.31 $295.65 42%
6" 43.33 $849.66 $8.55 $858.20 $753.55 14%

City of Brentwood / Water and Wastewater Rate Study 28
Two components comprise the fixed meter charges: meter capacity and customer service (or billing), both of which are described below. This charge recognizes the fact that even when a customer does not use any water, the City incurs fixed costs in connection with maintaining the ability or readiness to serve each connection.

3.6.2.1. Meter Capacity Component
The meter capacity component collects capacity (also known as peaking) related costs. Capacity-related costs can be allocated to and collected through the meter service charge by meter size. This reflects the fact that larger meters have the potential to demand more capacity compared to smaller meters. The potential capacity demanded is proportional to the potential flow through each meter size as established by the AWWA hydraulic capacity ratios, discussed earlier in Table 3-13, and shown in the “Meter Ratio” column of Table 3-20. The ratios show the potential flow through each meter size compared to the flow through a 3/4- inch meter. For example, the “Meter Ratio” column in Table 3-20 shows that the flow through a 2-inch meter is 5.33 times that of a 3/4-inch; therefore, the meter capacity component of the base charge is 5.33 times that of the 3/4-inch meter. The meter capacity component for a 3/4-inch meter is shown in the “Meter” column of Table 3-20, and the capacity component for larger meters is scaled up using the AWWA capacity ratios shown in the “Meter Ratio” column of Table 3-20.

Allocating capacity costs by meter size is a common way to ensure capacity costs are passed on to customers requiring greater capacity in the system. Meter charges provide revenue stability, especially in light of decreasing revenues during a drought or other water shortage.

3.6.2.2. Customer/Billing Component
The customer/billing component recovers costs associated with meter reading, customer billing, and collection, as well as customer service costs. These costs are the same for all meter sizes, as it costs the same to provide billing and customer services to a small meter as it does a larger meter. The customer/billing component is shown in the “Customer/Billing” column of Table 3-20.

3.6.3. Proposed Commodity Rates

3.6.3.1. Residential Tier Definitions
The City’s current rate structure includes four tiers for residential customers. Tier 1 is from 0 to 5 kgal per month, Tier 2 is 6 to 14 kgal per month, Tier 3 is 15 to 20 kgal per month, and Tier 4 is 21 kgal per month or more. The water use patterns in the last few years have been impacted by drought, the Covid epidemic and economic changes; therefore, we have used the data from the previous rate study. Based on the previous rate study, using the last normal consumption patterns, the first tier provided water from the lowest cost source.

Tier 2 (6 to 14 kgal per month) represents the FY 2013 and FY 2014 average monthly water usage for residential customers. Tier 3 (15 to 20 kgal per month) represents the FY 2013 and FY 2014 average summer water usage between June and September for residential customers. This allocation provides sufficient outdoor water for an average residential customer. Tier 4 represents usage over 20 kgal per month.

Raftelis proposes that the City retain its existing residential tier definitions to minimize customer impacts and provide rate stability.

City of Brentwood / Water and Wastewater Rate Study 29

3.6.3.2. Non-Residential Tier Definitions
The City’s current rate structure includes two tiers for non-residential customers. Tier 1 is from 0 to 5 kgal per month. Tier 2 is 6 kgal per month or more. Raftelis is proposing that the City retains its existing nonresidential tier definitions.

The first tier for both residential and non-residential customers was based on the available local groundwater during the last rate study. The total groundwater production spread on all the users resulted in an allocation of five kgal per month per residential dwelling unit and non-residential account.

3.6.3.3. Unit Cost Definitions
The commodity rates for each class and tier are derived by summing the unit rates ($/kgal) for:
• Supply
• Base Delivery
• Peaking
Supply costs are costs related to the cost of purchasing and producing water. The City has three sources of water, each incurring different costs, as shown in Table 3-21. The City wishes to provide the minimum 5 kgal of water to each residential unit and non-residential account for essential use; however, because of quality considerations, groundwater alone cannot provide the 5 kgal per account. Water from the BWTP will be used to meet this requirement. Since this is incremental water required from BWTP, only the incremental operating cost is considered along with the fixed cost based on the treatment capacity at BWTP. The incremental variable cost of BWTP is $325 per ac-ft. BWTP’s fixed cost of $3.1 million, based on the treatment capacity of 16 mgd, results in $173 per ac-ft for a net cost of $498/ac-ft or $1.14 per kgal. The resultant unit cost shown on Line 8 of Table 3-21 is $1.74 per kgal. It should be noted that both residential and non-residential accounts benefit from this least cost water.

City of Brentwood / Water and Wastewater Rate Study 30
Table 3-21: Allocation of Water Supply
Each source of supply is allocated to each customer class based on the proportional amount of water usage in each class. Within each customer class, each available supply is allocated to each tier based on the use in each tier, with priority given to the lower tiers. For example, the residential class is allocated 1,358,860 kgal of the least-cost water. This principle applies to the non-residential customer class as well.

Base Delivery costs are the operating and capital costs associated with delivering water to all customers at a constant average rate of use – also known as serving customers under average daily demand conditions.

Therefore, base delivery costs are spread over all units of water irrespective of customer class or tiers. Based on Table 3-17, the delivery or base unit cost is $1.35 per kgal.

Line No. Sources Least Cost
Water
RBWTP
Brentwood
WTP
Total
1 Sales Capacity at Source (kgal) 509,092 545,397 2,226,065 3,280,554 2 Production Costs at Source $961,187 $2,938,968 $10,120,077 $14,020,232 3 Unit Cost by Source, $/kGal $1.89 $5.39 $4.55
4 Actual Addn Sales, Tier 1 Requirements, kgal 922,740
5 Total Sales, kgal 1,431,832 545,397 1,303,325
6 Marginal Cost of BWTP $1,534,408 $2,938,968 $8,585,669 $13,059,045 7 Adjusted Cost $2,495,595 $2,938,968 $8,585,669 $14,020,232 8 Unit Cost ($/kgal) $1.74 $5.39 $6.59 $4.27
9 Unit Cost ($/AF) $567.90 $1,755.79 $2,146.40 $1,392.51 Sources (after transfers) Least Cost
Water
RBWTP
Brentwood
WTP
Total
10 Sales (kgal) 1,431,832 545,397 1,303,325 3,280,554
11 Cost $2,495,595 $2,938,968 $8,585,669 $14,020,232
12 Unit Cost ($/kgal) $1.74 $5.39 $6.59 $4.27
Account Usage (kgal) Least-Cost
Water
RBWTP
Brentwood
WTP
Total Unit Cost
13 Residential 22,648 2,575,963 1,358,860 517,602 699,501 2,575,963 $3.79 14 Non-Residential 1,216 694,698 72,972 27,796 593,930 694,698 $6.03 15 Hydrant 0 9,893 0 0 9,893 9,893 $6.59
16 TOTAL 23,864 3,280,554 1,431,832 545,397 1,303,325 3,280,554 $4.27 17 Usage (kgal) Least-Cost
Water
RBWTP
Brentwood
WTP
Total Unit Cost
18 Residential
19 Tier 1 5 1,174,264 1,174,264 0 0 1,174,264 $1.74
20 Tier 2 14 959,379 184,596 517,602 257,182 959,379 $5.01 21 Tier 3 20 226,581 0 0 226,581 226,581 $6.59
22 Tier 4 21+ 215,738 0 0 215,738 215,738 $6.59
23 Subtotal Residential 2,575,963 1,358,860 517,602 699,501 2,575,963 $3.79 24 Non-Residential
25 Tier 1 5 47,077 47,077 0 0 47,077 $1.74
26 Tier 2 6+ 647,621 25,895 27,796 593,930 647,621 $6.34 27 Subtotal Non-Residential 694,698 72,972 27,796 593,930 694,698 $6.03 28 Hydrant 9,893 0 0 9,893 9,893 $6.59
29 TOTAL 3,280,554 1,431,832 545,397 1,303,325 3,280,554 $4.27

City of Brentwood / Water and Wastewater Rate Study 31
Peaking or extra-capacity costs represent costs incurred to meet customer peak demands in excess of base use (or average daily demand). Total extra capacity costs are comprised of maximum day and maximum hour demands. The peaking costs are distributed to each tier and class using peaking factors derived from customer use data. Table 3-22 shows the peaking unit cost for each customer class and tier, which is calculated by dividing the total peaking (max day plus max hour) costs for each class and tier from Table 3-18, by the total usage in each class and tier from Table 3-16.

Table 3-22: Peaking Cost Calculation
Table 3-23 shows the proposed commodity rate for FY 2024 for each customer class, which is the sum of the three previously discussed rate components. The Supply component is from Table 3-21, the Base Delivery component is from Table 3-17, and the Peaking component is from Table 3-22.

Table 3-23: Proposed Commodity Rate
Customer Class Monthly Tier
(kgal) Peaking Costs Usage (kgal) Unit Cost
Residential
Tier 1 5 $96,927 1,174,264 $0.08
Tier 2 14 $228,895 959,379 $0.24
Tier 3 20 $89,416 226,581 $0.39
Tier 4 21+ $105,629 215,738 $0.49
Non-Residential
Tier 1 5 $4,844 47,077 $0.10
Tier 2 6+ $183,074 647,621 $0.28
Hydrant $9,609 9,893 $0.97
Monthly Tier Supply Base Total
(kgal) Supply Delivery Rate
Residential
Tier 1 5 $1.74 $1.35 $0.08 $3.18
Tier 2 14 $5.01 $1.35 $0.24 $6.60
Tier 3 20 $6.59 $1.35 $0.39 $8.33
Tier 4 21+ $6.59 $1.35 $0.49 $8.43
Subtotal Residential
Non-Residential
Tier 1 5 $1.74 $1.35 $0.10 $3.20
Tier 2 6+ $6.34 $1.35 $0.28 $7.98
Subtotal Non-Residential
Hydrant $6.59 $1.35 $0.97 $8.91
Non-Potable $1.08
Customer Class Peaking

City of Brentwood / Water and Wastewater Rate Study 32

3.6.3.4. Non-Potable Water
Non-potable water rates are calculated to recover costs associated with providing non-potable water service.

Table 3-24 shows the calculation for the City’s retail non-potable water customers.

Table 3-24: Non-Potable Water Rate Calculation

3.6.4. 5-Year Proposed Monthly Water Rates
Table 3-25 shows the proposed rates for the next five years. These rates are effective on July 1 of each fiscal year. The City reserves the right to pass through costs that are not within the City’s control, such as water purchase costs, electrical costs, chemical costs, etc. to the proposed rates when such an action is deemed necessary. The financial plan has built-in projected increases in these costs. However, if those increases exceed the projected amount, the additional costs may be recovered through the rates.

Table 3-25: Proposed Monthly Water Rates
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Operating Expenses $520,812 $575,329 $598,564 $620,562 $640,287 Capital Expenses $0 $0 $0 $0 $0
Total Expenses $520,812 $575,329 $598,564 $620,562 $640,287 Non-Potable Usage (kgal) 484,299 487,254 488,440 489,834 491,233 Non-Potable Rate ($/kgal) $1.08 $1.19 $1.23 $1.27 $1.31 Current July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 July 1, 2027 Monthly Base Rate
Meter Size
5/8" or 3/4" $27.61 $28.16 $30.00 $31.95 $34.03 $36.25
1" $39.03 $41.24 $43.93 $46.79 $49.84 $53.08
1 1/2" $67.61 $73.91 $78.72 $83.84 $89.29 $95.10
2" $101.90 $113.13 $120.49 $128.33 $136.68 $145.57
3" $210.52 $237.31 $252.74 $269.17 $286.67 $305.31
4" $295.65 $420.31 $447.64 $476.74 $507.73 $540.74
6" $753.55 $858.20 $913.99 $973.40 $1,036.68 $1,104.07
Commodity Rate ($/kgal)
Residential Monthly (kgal)
Tier 1 5 $3.28 $3.18 $3.39 $3.62 $3.86 $4.12
Tier 2 14 $6.31 $6.60 $7.03 $7.49 $7.98 $8.50
Tier 3 20 $7.41 $8.33 $8.88 $9.46 $10.08 $10.74
Tier 4 21+ $7.64 $8.43 $8.98 $9.57 $10.20 $10.87
Non-Residential
Tier 1 5 $3.39 $3.20 $3.41 $3.64 $3.88 $4.14
Tier 2 6+ $6.87 $7.98 $8.50 $9.06 $9.65 $10.28
Hydrant $6.87 $8.91 $9.49 $10.11 $10.77 $11.48
Non-Potable $1.60 $1.08 $1.19 $1.23 $1.27 $1.31

City of Brentwood / Water and Wastewater Rate Study 33

3.7. Water Bill Impacts
Table 3-26 shows the impacts of an average residential customer with a 1-inch meter using an average 10 kgal of water monthly.

Table 3-26: Residential Water Monthly Rate Impacts
Residential Usage (kgal) Current Bill Proposed Bill Difference $ Difference % Bills at or below
Average 10 $86.98 $90.14 3.6% $3.16 65.2%

City of Brentwood / Water and Wastewater Rate Study 34

4. Wastewater Rates
The following subsections present the findings and recommendations of the wastewater rate study, including system background information, study assumptions, financial plan, cost-of-service analysis, rate design, and projected customer impacts.

4.1. Wastewater System Background
The City wastewater system collects, treats, and disposes of wastewater from over 20,800 connections as of FY 2023. Wastewater is treated at the City’s Wastewater Treatment Plant (WWTP), which has a current capacity of 5.0 million gallons per day (MGD). The WWTP is an extended aeration/activated sludge facility.

Its treatment system includes preliminary screening and grit removal, oxidation ditches, and denitrification basins providing biological treatment, secondary clarification, tertiary filtration, chlorine disinfection, dechlorination, and a cascade aeration system.2 Treated effluent, if not recycled, is discharged into Marsh Creek. In addition to the treatment plant, the wastewater system includes approximately 200 miles of sewer mains and lateral connections.

4.2. Wastewater Account and Usage Assumptions
Table 4-1 shows that the majority of the City’s wastewater accounts are residential customers. Both the number of accounts and dwelling units are shown for multi-family residential customers, as residential customers are assessed a base and variable charge per dwelling unit but are charged a lateral maintenance fee per account. For single-family residential customers, each dwelling unit corresponds to a single account.

Table 4-1: Projected Wastewater Accounts by Customer Class 2 2015 Urban Water Management Plan.

Actual Projected Budgeted Projected Projected Projected Projected Customer Accounts FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 SFR (units) 19,993 20,235 20,502 20,681 20,754 20,839 20,925 MFR (accounts) 72 73 74 75 75 75 76
MFR (units) 2,200 2,227 2,256 2,276 2,284 2,293 2,303
Auto Sales and Repair 20 20 21 21 21 21 21
Barber & Beauty Shop 11 11 11 11 12 12 12
Bakery 2 2 2 2 2 2 2
Car Washes 6 6 6 6 6 6 6
Gas Stations 17 17 18 18 18 18 18
Grocery Stores 12 12 12 12 12 12 12
Hotels without Restaurants 3 3 3 3 3 3 3
Institutions, Churches, HOAs 49 49 50 50 50 51 51
Laundromats 2 2 2 2 2 2 2
Laundry, Commercial 1 1 1 1 1 1 1
Office Buildings, Banks 113 114 115 116 117 117 118
Restaurants 85 86 87 87 88 88 89
Retail Stores 93 94 95 96 96 97 97
Schools 36 36 37 37 37 38 38
Other Commercial 65 66 67 67 67 68 68
Mixed Use 2 2 2 2 2 2 2
TOTAL ACCOUNT 20,581 20,830 21,105 21,290 21,365 21,452 21,540

City of Brentwood / Water and Wastewater Rate Study 35
The wastewater accounts are projected to increase by approximately 435 accounts from FY 2024 to FY 2028, based on the City’s General Plan population growth rates, and are typically driven by new residential and nonresidential development, as shown in Table 4-2.

Table 4-2: Wastewater Account Growth
Table 4-3 shows the projected billed wastewater flow over the study period by customer class. The revenue calculated for each of the fiscal years in the Financial Plan is a function of the number of dwelling units/accounts, billed wastewater flow, and existing rates. Note that billed wastewater flow for residential customers is based on monthly water usage during the two lowest production winter months when irrigation water is typically not used, and indoor water makes its way to the treatment plant and is capped at 7 kgal per dwelling unit per month. Non-residential billed wastewater flow is based on actual monthly water use since nonresidential customers typically have separate “irrigation only” water service, and water usage does not fluctuate seasonally. Although billed wastewater flow is projected to increase due to account growth, wastewater generation per account is assumed to stay constant throughout the study period since wastewater flow is generated by “indoor” use and does not tend to fluctuate as would “outdoor” or irrigation usage.

Table 4-3: Projected Billed Wastewater Flow by Customer Class, kgal Fiscal Year Account Growth
2023 1.2%
2024 1.3%
2025 0.9%
2026 0.4%
2027 0.4%
2028 0.4%
Actual Budgeted Budgeted Projected Projected Projected Projected Billed Water Use FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 SFR 1,145,264 1,159,122 1,174,422 1,184,703 1,188,891 1,193,746 1,198,640 MFR 109,569 110,895 112,359 113,342 113,743 114,207 114,676 Auto Sales and Repair 2,055 2,080 2,107 2,126 2,133 2,142 2,151 Barber & Beauty Shop 677 685 694 700 703 706 709
Bakery 213 216 218 220 221 222 223
Car Washes 13,093 13,251 13,426 13,544 13,592 13,647 13,703 Gas Stations 18,090 18,309 18,551 18,713 18,779 18,856 18,933 Grocery Stores 15,256 15,441 15,644 15,781 15,837 15,902 15,967 Hotels without Restaurants 4,468 4,522 4,582 4,622 4,638 4,657 4,676 Institutions, Churches, HOAs 15,820 16,011 16,223 16,365 16,423 16,490 16,557 Laundromats 3,726 3,771 3,821 3,854 3,868 3,884 3,900
Laundry, Commercial 88 89 90 91 91 92 92
Office Buildings, Banks 20,684 20,934 21,211 21,396 21,472 21,560 21,648 Restaurants 45,400 45,949 46,556 46,963 47,129 47,322 47,516 Retail Stores 21,947 22,213 22,506 22,703 22,783 22,876 22,970 Schools 19,950 20,191 20,458 20,637 20,710 20,795 20,880 Other Commercial 14,716 14,894 15,091 15,223 15,277 15,339 15,402 Mixed Use 691 699 709 715 717 720 723
TOTAL BILLED FLOW 1,451,707 1,469,273 1,488,667 1,501,699 1,507,007 1,513,162 1,519,366

City of Brentwood / Water and Wastewater Rate Study 36

4.3. Inflationary and Other Assumptions
This subsection describes the assumptions used in projecting operating and capital expenses as well as reserve coverage requirements that determine the overall revenue adjustments required to ensure the financial stability of the City’s wastewater enterprise. Revenue adjustments represent the average increase in wastewater rates for the City as a whole. Note that rate changes for individual classes will depend on the cost of service.

As with the water rate study, non-rate revenue and O&M projections are based on the City’s FY 2024 projections and projected budgetary increases in FY 2025 through FY 2028. The City uses different inflation factors that are indicative of industry increases for different expenditures within the budget, such as personnel, supplies, or fuel, to capture the impact of market forces over time. On average, the O&M costs are increasing at approximately 6 percent per year.

4.4. Wastewater Enterprise Financial Plan
This subsection of the report provides a discussion of the O&M and capital expenditures, capital improvement financing plan, debt service requirements, and revenue adjustments required to ensure the financial stability of the wastewater enterprise.

4.4.1. Revenue Requirement
A utility’s yearly revenue requirement is the amount of yearly revenue needed to operate, maintain, and ensure fiscal solvency. The revenue requirement includes O&M expenses, rate funded capital expenditures, debt service payments, and reserve funding.

4.4.1.1. O&M Expenses
The City’s wastewater enterprise’s projected O&M expenses are shown in Table 4-4. The Wastewater Financial Plan study period is from FY 2024 to FY 2028. O&M expenses include the cost of wastewater collection, wastewater treatment, billing, and providing lateral maintenance. Table 4-4 summarizes the projected O&M expenses by function.

Table 4-4: Projected Wastewater Enterprise O&M Expenses

4.4.1.2. Capital Improvement Program
Table 4-5 shows the City’s wastewater enterprise rate-funded CIP for FY 2024 through FY 2028, which totals approximately $5.1 million.

Budgeted Projected Projected Projected Projected
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Collection $3,382,876 $3,755,002 $3,926,215 $4,090,700 $4,241,368 Treatment $7,451,701 $8,736,141 $9,117,555 $9,478,856 $9,810,965 Utility Billing $1,126,916 $1,183,929 $1,232,390 $1,280,597 $1,322,346 Lateral Maintenance $384,016 $400,829 $416,848 $432,948 $447,344 TOTAL O&M EXPENSES $12,345,509 $14,075,900 $14,693,008 $15,283,101 $15,822,023

City of Brentwood / Water and Wastewater Rate Study 37
Table 4-5: Detailed Wastewater Enterprise Capital Improvement Plan – Inflated

4.4.1.3. Debt Service
The City has debt service associated with an existing SRF loan, which was used to finance an initial WWTP expansion, as well as a planned debt issuance for the WWTP Phase II expansion and recycled water projects.

Table 4-6 shows the City’s debt service payments associated with the wastewater enterprise through FY 2028.

These schedules were provided by City staff. The financial plan does not include any additional debt issuances. The wastewater treatment plant note was paid off in FY 2023.

Table 4-6: Wastewater Enterprise Debt Service Payments

4.4.1.4. Proposed Financial Plan and Revenue Adjustment The proposed wastewater revenue adjustments help ensure adequate revenue to fund operating expenses, capital expenditures, and compliance with bond covenants. The Financial Plan model assumes the revenue adjustment occurs on July 1 of each year. The proposed revenue adjustments would enable the City to execute the CIP shown in Table 4-5 and meet its debt service coverage requirements over the study period.

Without these adjustments, the City would not be able to make debt coverage in FY 2029, just past the ratesetting period, and would have to delay necessary capital projects.

Budgeted Budgeted Budgeted Budgeted Budgeted
Capital Improvement Plan (CIP) FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 Fund #590 - Wastewater
80466.00 Transfer to 2015 Lease Rev Bond $71,147 $70,243 $67,261 $64,385 $56,171 80562.00 Transfer to Water Capital Proj - Corp Yard $0 $400,000 $0 $0 $0 80562.00 Transfer to Water Capital Proj - Headworks Rehabilitation $0 $1,875,000 $0 $0 $0 Water and WW Laboratory $510,000 $1,290,000 $0 $0 $0
Anaergia Organics $0 $0 $243,379 $243,379 $243,379
Total Wastewater CIP $581,147 $3,635,243 $310,640 $307,764 $299,550 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Wastewater Treatment Plant Note
Principal $0 $0 $0 $0 $0
Interest $0 $0 $0 $0 $0
Total Wastewater Treatment Plant Note $0 $0 $0 $0 $0
Wastewater Treatment Plant Expansion II
Principal $0 $0 $494,602 $501,032 $507,546
Interest $0 $0 $246,821 $240,042 $233,174
Total Wastewater Treatment Plant Expansion II $0 $0 $741,424 $741,074 $740,719 Non-Potable Storage Facility
Principal $118,761 $119,948 $121,148 $122,359 $123,583
Interest $41,311 $40,123 $38,924 $37,712 $36,489
Total Non-Potable Storage Facility $160,071 $160,071 $160,071 $160,071 $160,071 Citywide Non-Potable Water Distribution System
Principal $0 $90,603 $91,509 $92,425 $93,349
Interest $31,204 $30,307 $29,401 $28,486 $27,562
Total Citywide Non-Potable Water Distribution System $31,204 $120,910 $120,910 $120,911 $120,911 TOTAL EXISTING DEBT SERVICE $191,275 $280,982 $1,022,406 $1,022,056 $1,021,702

City of Brentwood / Water and Wastewater Rate Study 38
Table 4-7 shows the proposed wastewater enterprise revenue adjustments for FY 2024 through FY 2028.

These increases are needed to finance the operating and capital expenses and reserve funding, as well as meeting the debt coverage requirements for the SRF loans.

Table 4-7: Proposed Wastewater Revenue Adjustments
Table 4-8 shows the City’s wastewater enterprise cash flow detail over the next five years.

Table 4-8: Proposed Wastewater Enterprise Cash Flow
Table 4-9 shows the calculated debt coverage for the City’s wastewater enterprise. The City’s debt service payments associated with the wastewater enterprise are split between the wastewater rate fund and the Fiscal Year Effective Date Revenue Increase
FY 2024 July 1, 2023 2.0%
FY 2025 July 1, 2024 2.0%
FY 2026 July 1, 2025 2.0%
FY 2027 July 1, 2026 2.0%
FY 2028 July 1, 2027 2.0%
Budgeted Projected Projected Projected Projected
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Revenue from Existing Rates $16,048,529 $16,189,020 $16,246,245 $16,312,593 $16,379,474 Additional Revenue Required from Rates
Fiscal Revenue Month
Year Adjustment Effective
FY 2024 2.0% July $320,971 $323,780 $324,925 $326,252 $327,589 FY 2025 2.0% July $330,256 $331,423 $332,777 $334,141
FY 2026 2.0% July $338,052 $339,432 $340,824
FY 2027 2.0% July $346,221 $347,641
FY 2028 2.0% July $354,593
Total Additional Revenue from Rates $320,971 $654,036 $994,400 $1,344,682 $1,704,789 Total Rate Revenue $16,369,500 $16,843,057 $17,240,645 $17,657,275 $18,084,263 Current Services $39,981 $41,916 $43,545 $45,044 $46,391 Other Revenue $236,283 $244,570 $252,015 $259,835 $267,925 Standby Charges $50,973 $50,463 $49,959 $49,459 $48,964 Operating Transfers $0 $0 $0 $0 $0
Interest Income $487,347 $391,963 $363,026 $344,417 $321,289 TOTAL REVENUES $17,184,084 $17,571,969 $17,949,190 $18,356,031 $18,768,833 O&M Expenses (excluding Depreciation)
Collection $3,382,876 $3,755,002 $3,926,215 $4,090,700 $4,241,368 Treatment $7,451,701 $8,736,141 $9,117,555 $9,478,856 $9,810,965 Utility Billing $1,126,916 $1,183,929 $1,232,390 $1,280,597 $1,322,346 Lateral Maintenance $384,016 $400,829 $416,848 $432,948 $447,344 Existing and Proposed Debt Service $191,275 $280,982 $1,022,406 $1,022,056 $1,021,702 Proposed Debt Service $0 $0 $0 $0 $0
Proposed SRF Debt Service $0 $0 $0 $0 $0
Rate Funded Capital Projects $581,147 $3,635,243 $310,640 $307,764 $299,550 Transfer from Operating to Capital R&R $11,579,321 $1,700,438 $2,725,188 $2,820,573 $2,884,081 TOTAL EXPENSES $24,697,252 $19,692,562 $18,751,241 $19,433,493 $20,027,355 Net Income ($7,513,168) ($2,120,593) ($802,051) ($1,077,463) ($1,258,522)

City of Brentwood / Water and Wastewater Rate Study 39
development impact fee fund. To calculate debt coverage ratios for the wastewater enterprise, total revenue (including development impact fee revenue) and total debt service payments are included. The wastewater enterprise’s debt coverage requirement is 110 percent. With the proposed increases, the City meets and exceeds its debt coverage requirement throughout the study period.

Table 4-9: Wastewater Enterprise Debt Coverage Calculation The next four figures display the Wastewater Enterprise Financial Plan in graphical format. Figure 4-1 shows the modeled revenue adjustments (blue bars) for the next five years on the left-hand axis and the calculated and required debt coverage requirements shown by the green and red lines respectively on the right-hand axis.

The green line, representing debt coverage calculations with proposed increases is above the required debt coverage as shown by the red line. Without the proposed increases, the calculated coverage would drop to just above the requirement in FY 2028 and below the requirement in FY 2029.

Figure 4-1: Proposed Wastewater Enterprise Revenue Adjustments and Debt Coverage Ratio Figure 4-2 graphically illustrates the Wastewater Enterprise Financial Plan – it compares existing and proposed revenues with projected expenses. The expenses (O&M, debt service, capital costs, and reserves transfer) are shown by the stacked bars, and total revenues at existing and proposed rates are shown by the horizontal blue and orange lines, respectively.

FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Projected Wastewater Revenue $17,184,084 $17,571,969 $17,949,190 $18,356,031 $18,768,833 Projected O&M Expenses, less depreciation $12,345,509 $14,075,900 $14,693,008 $15,283,101 $15,822,023 Total Debt Service (for coverage) $191,275 $280,982 $1,022,406 $1,022,056 $1,021,702 Calculated Debt Coverage 2530% 1244% 318% 301% 288%
Required Debt Coverage 110% 110% 110% 110% 110%
318% 301% 288%
0%
100%
200%
300%
400%
500%
600%
0%
1%
2%
3%
4%
5%
6%
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Rev Adj Revenue Adjustments & Debt Coverage Debt Covg
Rev. Adj Debt Coverage - Reqd, 110% Debt Coverage - Calc

City of Brentwood / Water and Wastewater Rate Study 40
Figure 4-2: Proposed Wastewater Enterprise Financial Plan Figure 4-3 summarizes the projected CIP to be funded by wastewater rates.

Figure 4-3: Projected Wastewater Enterprise CIP and Funding Sources Figure 4-4 displays the resulting fund balance for the wastewater utility. The red line represents the total current target, which is equal to 30 percent of annual operating expenses and debt service payments, based on Budget and Fiscal Policy 2.7.3, adopted April 25, 2017. ($5)
$0
$5
$10
$15
$20
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions Wastewater Financial Plan
O&M Expenses Debt Service-CIP CIP Reserves Rev - Current Rev - Proposed $0.6
$3.6
$0.3 $0.3 $0.3
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions Capital Financing Plan
Rate Funded

City of Brentwood / Water and Wastewater Rate Study 41
Figure 4-4: Wastewater Enterprise Total Cash Balance
Table 4-10 shows the projected cash balance for the wastewater enterprise. This table corresponds with Figure 4-4.

Table 4-10: Wastewater Enterprise Projected Cash Balance

4.5. Wastewater Cost-of-Service Analysis
The total revenue requirement is, by definition, the net cost of providing service. This cost-of-service is then used as the basis to develop unit rates for the wastewater parameters and to allocate costs to the various user classes. The concept of proportionate allocation to user classes implies that allocations should take into consideration the quantity of wastewater a user contributes as well as the strength (i.e., treatment requirements) of the wastewater.

The cost-of-service analysis and rate calculations consist of the following steps:

1. Determination of the total costs to be recovered from rates (cost-of-service)

2. Determination of the wastewater loadings for each customer class, to ensure costs are allocated to each class proportionately

3. Allocation of the cost-of-service to the loading parameters- Flow, Biochemical Oxygen Demand (BOD) and Total Suspended Solids (TSS)

4. Calculation of unit costs for the three parameters and the costs to serve the various user classes based on their loadings

5. Calculation of rates for each user class
$20.9M
$18.7M $17.9M $16.9M $15.6M
$0
$5
$10
$15
$20
$25
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Millions WW Fund Balance
Total Funds Target with 30% Reserve
WW Fund FY 2024 FY 2025 FY 2026 FY 2027 FY 2028
Beginning Balance $28,367,621 $20,854,452 $18,733,860 $17,931,808 $16,854,345 Net Cash Flow ($7,513,168) ($2,120,593) ($802,051) ($1,077,463) ($1,258,522) Change in Payables/Receivables
Use of Reserves $0 $0 $0 $0 $0
Ending Balance $20,854,452 $18,733,860 $17,931,808 $16,854,345 $15,595,823 Interest Income $487,347 $391,963 $363,026 $344,417 $321,289

City of Brentwood / Water and Wastewater Rate Study 42
This section of the report discusses the allocation of operating and capital costs to the Flow, BOD, and TSS parameters, the determination of unit rates, and the calculation of user class cost responsibility.

In this study, wastewater rates were calculated for FY 2024, and accordingly FY 2024 revenue requirements are used in the cost allocation process.

4.5.1. Costs-of-Service to be Allocated
The annual cost-of-service to be recovered from wastewater rates (i.e., revenue requirement) includes O&M expenses (Table 4-4Error! Reference source not found.), costs associated with annual renewal and replacements, and other capital-related costs (Table 4-5). O&M expenses include costs directly related to the collection, treatment, and disposal of wastewater and maintenance of system facilities. Renewals and replacements represent the annual recurring capital outlay for minor system improvements and purchase of equipment.

The total FY 2024 net cost-of-service to be recovered from the City’s wastewater users, as shown on the last line in Table 4-11, is estimated at $16.4 million, of which $11.5 million are operating costs and the remaining $4.9 million are net capital costs including debt service costs. The cost-of-service analysis is based on the need to generate revenues adequate to meet this estimated revenue requirement. As part of the cost-of-service analysis, revenues from sources other than wastewater rates and charges are deducted from the appropriate cost elements. Additional deductions are made for interest income and other non-operating income during FY 2024. Adjustments are also made for transfers from reserves.

Table 4-11: Allocation of Wastewater Revenue Requirements To allocate the cost-of-service to the various user classes in proportion to their flow and strength contributions, costs first need to be allocated to selected wastewater cost causation parameters. The following subsection describes the allocation of the operating and capital cost-of-service amounts to the parameters of Flow, BOD, and TSS.

FY 2024
Operating Capital Total
Revenue Requirements
O&M Expenses $12,345,509 $12,345,509
Existing and Proposed Debt Service $191,275 $191,275
Rate Funded Capital Projects $581,147 $581,147
Transfer from Operating to Capital R&R $11,579,321 $11,579,321 Total Revenue Requirements $12,345,509 $12,351,743 $24,697,252 Revenue Offsets
Current Services $39,981 $39,981
Other Revenue $236,283 $236,283
Standby Charges $50,973 $50,973
Interest Income $487,347 $487,347
Total Revenue Offsets $814,584 $0 $814,584
Adjustments
Transfer to (from) reserves $0 ($7,513,168) ($7,513,168) Total Adjustments $0 ($7,513,168) ($7,513,168)
Cost-of-Service to be Recovered from Rates $11,530,925 $4,838,575 $16,369,500

City of Brentwood / Water and Wastewater Rate Study 43

4.5.2. Cost Allocation to Wastewater Cost Causation Parameters The cost-of-service allocations in this study are based on Raftelis’ experience with secondary/tertiary treatment plants and are consistent with the revenue program guidelines of the Water Environment Federation (WEF).

The three main cost causation parameters are Flow, BOD, and TSS. BOD and TSS constitute the strength components of the wastewater discharge. Additional parameters include infiltration and inflow, customers, and laterals. Costs are assigned based on the parameters that dictate the design of each process. The allocation of costs to the three main parameters involves:
• Detailed breakdown and functionalization of O&M costs. • Itemization of the capital costs by functions such as collection, treatment, outfall, etc. • Allocation of the functional costs to the wastewater cost causation parameters.

In the absence of a detailed breakdown of fixed assets by process, the WWTP costs are allocated to flow, BOD, and TSS at 50 percent, 25 percent, and 25 percent, respectively. This allocation is representative of other similar treatment plants. Pipelines, outfall, and pumping stations costs are all allocated to flow.

Similarly, operating costs identified with the collection system are allocated to infiltration and inflow (I&I) and wastewater flow, and operating treatment costs are allocated in the same manner as the fixed asset costs.

Costs that could not be specifically identified were categorized as general costs. General costs are ultimately reallocated based on the proportions of other costs (see Table 4-14 below). Costs of lateral maintenance are allocated to laterals and costs of utility billing to customers. The allocation of O&M and capital costs is shown in Appendix B.

4.5.3. Unit Cost-of-Service
The next step of the cost-of-service analysis is to calculate unit costs for Flow, BOD, and TSS. The unit costs of service are developed by dividing the total annual costs allocated to each parameter by the total annual loadings for each parameter. Raftelis determined the total billed residential wastewater flow based on City data for the lowest two winter water production months, when most usage is typically “indoor” and generates wastewater to be treated, and estimated the non-residential flow at 100 percent of the water use since separate irrigation meters measure the “outdoor” use that does not generate wastewater. The remaining influent was assumed to be infiltration and inflow (I&I) that comes from storm or irrigation runoff or groundwater leakage into the pipes. Raftelis calculated an I&I of just under 10 percent of the total plant influent based on the estimated wastewater flow from customers. The net plant loadings (total influent less I&I) provide a basis for determining unit costs.

The strength of different types of non-residential customers is based on data from the City of Los Angeles and the County Sanitation Districts of Los Angeles County (LACSD). Table 4-12 shows the calculation of the units of service for I&I, residential and non-residential customers using the method described above.

City of Brentwood / Water and Wastewater Rate Study 44
Table 4-12: Mass Balance
To verify the validity of the assumptions made, the net calculated strength for a residential account is compared against the expected flow and strength from a residential customer. The City serves 22,461 residential units in FY 2023. The calculated loading for each residential unit is:

Flow 44 gal/capita/day*
BOD 272 mg/L
TSS 387 mg/L
*Based on an average density of 3.2 persons per household from the 2021 American Community Survey 5-Year Estimates for the City of Brentwood The residential and non-residential wastewater loadings are used in Table 4-13 to develop the FY 2024 units of service. These units of service are then used in Table 4-14 to determine the unit costs for each of the wastewater parameters. These unit costs are then used along with the loadings to develop the cost to be collected from the different customer classes. Note that general costs are reallocated based on the proportions of the other costs. Since the majority of the collection system costs are fixed, to ensure fairness and revenue stability, a portion of the costs allocated to flow are moved to the fixed category under customers. The resultant fixed revenue, which also covers the City’s fixed costs that are not dependent upon water volume, is 40 percent of the total rate revenue, which compares with the current fixed rate revenue of 35 percent.

Table 4-13: Units of Service
WW Flow BOD TSS
(MG/yr) (lbs/yr) (lbs/yr)
Total Plant Influent 1,474.76 3,446,091 4,406,074
Less: I&I 9.9% 146.00 243,688 243,688
Net Plant Influent 1,328.76 3,202,403 4,162,386
Non-Residential 179.33 596,408 452,588
Residential 1,149.43 2,605,995 3,709,798
Customer Class WW Flow (kgal) BOD (lbs/yr) TSS (lbs/yr) Units Accounts Bills/Year Residential WW 1,286,781 2,917,402 4,153,105 22,758 20,576 273,094 SFR (capped at 7 kgal/mo) 1,182,635 2,681,281 3,816,972 20,502 20,502 246,022 MFR (capped at 7 kgal/mo) 104,146 236,121 336,133 2,256 74 27,072 Non-Residential Rate Classes
Low Strength 30,496 21,992 30,492 43 43 517
Medium Low Strength 90,183 124,651 117,623 378 378 4,542 Medium Strength 4,761 11,865 5,194 5 5 62
Medium High Strength 81 454 461 1 1 12
High Strength 56,177 445,318 304,792 101 101 1,212
TOTAL 1,468,478 3,521,683 4,611,667 23,287 21,105 279,439

City of Brentwood / Water and Wastewater Rate Study 45
Table 4-14: Development of Unit Costs

4.6. Wastewater Rate Derivation

4.6.1. Existing Rate Structure and Rates
The current wastewater rate structure consists of a base charge, a variable charge, and a lateral maintenance fee. Customers are currently billed monthly. The base charge is levied per dwelling unit for residential customers and per account for non-residential customers. The lateral maintenance fee is levied per account for residential customers only.

Residential customers are subject to a monthly variable charge per unit (kgal) of water used in the two lowest winter months subject to a cap of 7 kgal/mo. Residential monthly billed flow is recalculated each July.

Variable charges for new residential customers are based on the citywide residential average wastewater usage. A maximum charge currently caps monthly residential wastewater bills at $67.64 per month.

Non-residential customers are subject to a monthly variable charge per unit (kgal) of monthly water usage.

Non-residential customers fall into one of five strength classes: low, medium low, medium, medium high, and high. Existing rates and fees are shown in Table 4-15.

I&I WW Flow BOD TSS Customer Laterals General TOTAL
Operating Expenses $312,807 $6,326,870 $1,740,005 $1,740,005 $1,052,560 $358,678 $0 $11,530,925 Capital Expenses $189,832 $2,511,749 $439,981 $439,981 $0 $95,875 $1,161,158 $4,838,575 Total Cost of Service $502,639 $8,838,619 $2,179,986 $2,179,986 $1,052,560 $454,552 $1,161,158 $16,369,500 Allocation of General Cost $38,377 $674,829 $166,442 $166,442 $80,363 $34,705 ($1,161,158) $0 Allocated Cost of Service $541,015 $9,513,448 $2,346,428 $2,346,428 $1,132,923 $489,258 $0 $16,369,500 Adjustments to Fixed Charges $0 ($4,317,987) $4,317,987 $0 Adjusted Cost of Service $541,015 $5,195,462 $2,346,428 $2,346,428 $5,450,909 $489,258 $0 $16,369,500 Unit of Service 21,105 1,468,478 3,521,683 4,611,667 279,439 21,105 Units accounts kgal WW lbs/yr lbs/yr bills/yr Accounts
Unit Cost $2.14 $3.538 $0.666 $0.509 $19.51 $1.93
per month per kgal WW per lb per lb per month per month

City of Brentwood / Water and Wastewater Rate Study 46
Table 4-15: Existing Monthly Wastewater Rates

4.6.2. Proposed Rates
During the 2018 rate study, the non-residential customers were consolidated into broader strength categories recognizing that wastewater strength can vary widely day-to-day and measurement of strength is not very accurate. Table 4-16 shows each of the five consolidated non-residential customer classes defined by combined strength (the sum of BOD and TSS in mg/L).

Table 4-16: Consolidated Non-Residential Wastewater Customer Classes Table 4-17 shows the proposed wastewater rates for the next five years. Rates are adjusted by the cost-ofservice for FY 2024 and then by two percent on July 1 through the rate setting period, FY 2028.

FY 2023 (Current Rates)
Monthly Base Charge (per dwelling unit) $16.92
Monthly Lateral Maintenance Fee (per account) $3.33
Residential Variable Charge per unit ($/kgal)* $6.77
Residential Monthly Maximum Charge $67.64
Non-Residential Variable Charge ($/kgal of actual water use) Low Strength $5.33
Medium Low Strength $6.06
Medium Strength $6.66
Medium High Strength $13.64
High Strength $15.08
*Residential users' variable charge is based on water usage during two lowest-use winter months. It is capped at 7 kgal/mo.

Non-Residential Class
Combined
Strength
(mg/L)
Low Strength 0 - 250
Medium Low Strength 251 - 400
Medium Strength 401 - 800
Medium High Strength 801 - 1,400
High Strength > 1,400

City of Brentwood / Water and Wastewater Rate Study 47
Table 4-17: Proposed Monthly Wastewater Rates

4.7. Wastewater Bill Impacts
Table 4-18 shows the monthly bill impact of the proposed rates on a residential customer billed the residential average of 4 kgal per month.

Table 4-18: Average Residential Wastewater Monthly Rate Impacts July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 July 1, 2027 Monthly Base Charge (per dwelling unit) $19.51 $19.91 $20.31 $20.72 $21.14 Monthly Lateral Maintenance Fee (per account) $4.07 $4.16 $4.25 $4.34 $4.43 Residential Variable Charge per unit ($/kgal)* $6.70 $6.84 $6.98 $7.12 $7.27 Residential Monthly Maximum Charge (capped 7 kgal/mo) $70.48 $71.95 $73.42 $74.90 $76.46 Non-Residential Variable Charge ($/kgal of actual water use) Low Strength $4.53 $4.63 $4.73 $4.83 $4.93
Medium Low Strength $5.13 $5.24 $5.35 $5.46 $5.57
Medium Strength $5.76 $5.88 $6.00 $6.12 $6.25
Medium High Strength $10.16 $10.37 $10.58 $10.80 $11.02 High Strength $11.60 $11.84 $12.08 $12.33 $12.58
*Residential users' variable charge is based on water usage during two lowest production winter months. Capped at 7 kgal/mo.

Monthly Usage
(kgal)
Current
Monthly Bill
Proposed
Monthly Bill
Difference
($) Difference %
% of Bills At
or Below
Average 4 $47.33 $50.38 $3.05 6.4% 44%

City of Brentwood / Water and Wastewater Rate Study 48

5. Drought Surcharge
As part of the study, Raftelis calculated the demand reduction surcharge to recover the revenue shortfall that occurs as a result of demand reduction during water shortage situations.

A Drought Surcharge may be imposed during times of a declared drought when a certain level of reduction from the base usage has been mandated. A Drought Surcharge is charged on each unit of water used and is calculated to recover costs resulting from loss of revenue due to reduced water use. The amount of the Drought Surcharge at different levels of usage reduction is based upon the City’s projected revenue shortfall adjusted for changes in costs.

To determine the demand reduction surcharge, the first step is to project the water demand reduction for each customer class under different levels of shortage. Table 5-1 shows the projected water demand for each customer class and tier at different levels of reduction. Raftelis analyzed individual customer usage data, assuming that customers using more water are expected to reduce more since they have more discretionary water use. The analysis shows the increase in commodity rates that need to be applied to all usage including the tiers for each percentage reduction in usage. A magnified version of this table is presented in Appendix C.

Note that the actual reduction achieved under each drought stage is lower than the target.

Table 5-1: Projected Water Demand by Percent Usage Reduction The next step is to estimate the water supply cost savings that result when there is a reduction in demand. The City has a take-or-pay contract with CCWD; therefore, the City would continue to take its full allotment from CCWD. Proportional reduction in supply from BWTP and groundwater is used to ensure water quality. The variable costs associated with each supply are used to determine the cost savings. Almost all other costs are fixed and will not vary based on water demand. Table 5-2 shows the estimated cost savings in the water supply costs for each stage due to the reduction in usage. The total supply assumes a 12 percent water loss from the water usage shown in Table 5-1.

Usage Data
(kgal) Monthly Tier
Proposed
Rates FY 2024 % Reduction
10%
Reduction % Reduction
20%
Reduction % Reduction
30%
Reduction % Reduction
40%
Reduction % Reduction
50%
Reduction
Residential
Tier 1 5 $3.18 1,174,264 -2.0% 1,150,779 -7.0% 1,092,066 -10.0% 1,056,838 -15.0% 998,125 -20.0% 939,411 Tier 2 14 $6.60 959,379 -12.0% 844,254 -25.0% 719,534 -30.0% 671,565 -45.0% 527,659 -55.0% 431,721 Tier 3 20 $8.33 226,581 -20.0% 181,265 -30.0% 158,607 -50.0% 113,291 -70.0% 67,974 -85.0% 33,987 Tier 4 21+ $8.43 215,738 -30.0% 151,017 -50.0% 107,869 -75.0% 53,935 -90.0% 21,574 -100.0% 0 Subtotal Residential 2,575,963 -10% 2,327,314 -19% 2,078,076 -26% 1,895,628 -37% 1,615,331 -45% 1,405,119 Non-Residential
Tier 1 5 $3.20 47,077 -1% 46,779 -5.0% 44,723 -8.0% 43,311 -10.0% 42,369 -10.0% 42,369 Tier 2 6+ $7.98 647,621 -5% 615,240 -10.0% 582,859 -15.0% 550,478 -20.0% 518,097 -25.0% 485,716 Subtotal Non-Residential 694,698 -5% 662,019 -10% 627,582 -15% 593,788 -19% 560,466 -24% 528,085 Hydrant $8.91 9,893 0% 9,893 0% 9,893 0% 9,893 0% 9,893 0% 9,893 Total Potable Water (kgal) 3,280,554 2,999,227 2,715,551 2,499,310 2,185,690 1,943,097 Total Potable Water (AF) 10,068 9,205 8,334 7,671 6,708 5,964 % Total Reduction -9% -17% -24% -33% -41%

City of Brentwood / Water and Wastewater Rate Study 49
Table 5-2: Estimated Cost Savings by Percent Usage Reduction The final step is to calculate the drought surcharge, shown in Table 5-3. First, the projected potable water revenue is calculated by multiplying the demand projections from Table 5-1 for each level of reduction in use or scenario and the proposed water rates in FY 2024. The revenue shortfall is determined by comparing this revenue for each scenario with the FY 2024 revenues. Next, we add the estimated cost savings from Table 5-2 for each scenario. The total shortfall is divided by the projected demand in each scenario to arrive at a uniform dollar increase per unit of water for each scenario. Table 5-3 shows the proposed surcharge that will be effective July 1, 2023. Surcharges for subsequent years would increase by the overall revenue percentage increase of 6.5% shown in Table 3-7. Rates for intermediate conservation goals may be determined by linearly prorating the increases per unit.

Table 5-3: Drought Surcharge by Percent Usage Reduction FY 2024
10%
Reduction
20%
Reduction
30%
Reduction
40%
Reduction
50%
Reduction

SUPPLY (AF)
Groundwater Wells 1,775 1,623 1,344 704 234 0
CCWD Randall-Bold Treatment Plant 1,902 1,902 1,902 1,902 1,902 1,902 Surface Water 7,763 6,935 6,225 6,111 5,487 4,875
Surface Water - Rock Slough 5,434 4,855 4,358 4,278 3,841 3,413 Sufrace Water - Old River 2,329 2,080 1,867 1,833 1,646 1,462 Total Potable Supply 11,440 10,460 9,471 8,717 7,623 6,777 FIXED COST ($)
Groundwater Wells $0
CCWD Randall-Bold Treatment Plant (1) $2,842,965
Surface Water $3,097,331
TOTAL FIXED COSTS $5,940,296 $5,940,296 $5,940,296 $5,940,296 $5,940,296 $5,940,296 VARIABLE COST ($/AF)
Groundwater Wells $456 $456 $456 $456 $456 $456
Surface Water $325 $325 $325 $325 $325 $325
Surface Water - Rock Slough $282 $282 $282 $282 $282 $282 Sufrace Water - Old River $587 $587 $587 $587 $587 $587 TOTAL VARIABLE COSTS $6,226,291 $5,579,030 $4,956,348 $4,585,127 $3,935,641 $3,401,903 TOTAL WATER SUPPLY COSTS $12,166,587 $11,519,326 $10,896,643 $10,525,422 $9,875,936 $9,342,198 Cost Savings $647,261 $1,269,944 $1,641,164 $2,290,650 $2,824,388 (1) Take-or-pay contract.

FY 2024
10%
Reduction
20%
Reduction
30%
Reduction
40%
Reduction
50%
Reduction
Projected Potable Variable Revenue $19,178,966 $17,162,016 $15,334,702 $13,811,009 $11,762,816 $10,219,536 Revenue Shortfall ($2,016,951) ($3,844,264) ($5,367,958) ($7,416,150) ($8,959,430) Cost Savings $647,261 $1,269,944 $1,641,164 $2,290,650 $2,824,388 Net Revenue Shortfall to be Recovered ($1,369,690) ($2,574,321) ($3,726,793) ($5,125,500) ($6,135,042) % Revenue Shortfall 8% 17% 27% 44% 60%
$ Increase per unit - July 1, 2023 $0.46 $0.95 $1.50 $2.35 $3.16

City of Brentwood / Water and Wastewater Rate Study 50
APPENDIX A:

Water Cost-of-Service Tables

City of Brentwood / Water and Wastewater Rate Study 51
Table A-1: Allocation of Functionalized O&M Expenses to Cost Causation Components – Water O&M Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Supply (Surface Water) 100% 100%
Production (Wells) 100% 100%
Treatment 48% 52% 100%
Distribution 22% 24% 44% 10% 100%
Utility Billing 100% 100%
Transfer to Capital R&R 36% 37% 18% 6% 1% 2% 100%
O&M Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Supply (Surface Water) $12,090,971 $0 $0 $0 $0 $0 $0 $0 $0 $12,090,971 Production (Wells) $2,503,519 $0 $0 $0 $0 $0 $0 $0 $0 $2,503,519 Treatment $0 $1,090,869 $1,199,956 $0 $0 $0 $0 $0 $0 $2,290,824 Distribution $0 $1,094,220 $1,220,477 $2,230,526 $505,025 $0 $0 $0 $0 $5,050,248 Utility Billing $0 $0 $0 $0 $0 $0 $0 $2,309,529 $0 $2,309,529 Transfer to Capital R&R $0 $977,032 $987,766 $490,392 $151,322 $0 $19,924 $0 $59,861 $2,686,296 TOTAL O&M EXPENSES $14,594,490 $3,162,121 $3,408,198 $2,720,918 $656,347 $0 $19,924 $2,309,529 $59,861 $26,931,388 TOTAL O&M Allocation, % 54.2% 11.7% 12.7% 10.1% 2.4% 0.0% 0.1% 8.6% 0.2% 100%

City of Brentwood / Water and Wastewater Rate Study 52
Table A-2: Allocation of Functionalized Capital Expenses to Cost Causation Components – Water Capital Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Land 100% 100%
Well 100% 100%
Reservoir 43% 47% 10% 100%
Distribution 22% 24% 44% 10% 100%
Transmission 43% 47% 10% 100%
Buildings 100% 100%
Machinery & Equipment 100% 100%
Vehicles 100% 100%
Pumps 48% 52% 100%
Treatment Plant 48% 52% 100%
Non-Potable
Capital Allocation Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Land $0 $0 $0 $0 $0 $0 $0 $0 $62,556 $62,556
Well $0 $4,925,469 $0 $0 $0 $0 $0 $0 $0 $4,925,469
Reservoir $0 $4,470,940 $4,970,486 $0 $1,049,047 $0 $0 $0 $0 $10,490,474 Distribution $0 $14,062,805 $15,685,436 $28,666,486 $6,490,525 $0 $0 $0 $0 $64,905,252 Transmission $0 $5,566,622 $6,188,591 $0 $1,306,135 $0 $0 $0 $0 $13,061,348 Buildings $0 $0 $0 $0 $0 $0 $0 $0 $3,436,693 $3,436,693 Machinery & Equipment $0 $0 $0 $0 $0 $0 $1,164,664 $0 $0 $1,164,664 Vehicles $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pumps $0 $1,191,739 $1,310,913 $0 $0 $0 $0 $0 $0 $2,502,653 Treatment Plant $0 $26,896,087 $29,585,696 $0 $0 $0 $0 $0 $0 $56,481,783 TOTAL ASSETS $0 $57,113,662 $57,741,123 $28,666,486 $8,845,707 $0 $1,164,664 $0 $3,499,249 $157,030,892 Total Asset Allocation, % 0% 36.4% 36.8% 18.3% 5.6% 0.0% 0.7% 0.0% 2.2% 100%

City of Brentwood / Water and Wastewater Rate Study 53
Table A-3: Derivation of Service Units – Water
Table A-4: Unit Cost Calculation – Water
Annual Average Capacity Total Extra Capacity Total Extra No. of No. of No. of Monthly Use Daily Use Factor Capacity Capacity Factor Capacity Capacity Fire Meters Meters Bills Tiers (kgal) (kgal) (kgal/day) (kgal/day) (kgal/day) (kgal/day) (kgal/day) ( Equiv.) ( Equiv.) (No.) Residential
Tier 1 5 1,174,264 3,217 1.06 3,410 193 2.02 6,496 3,085 Tier 2 14 959,379 2,628 1.52 3,995 1,367 2.90 7,610 3,615 Tier 3 20 226,581 621 1.98 1,229 608 3.77 2,341 1,112
Tier 4 21+ 215,738 591 2.26 1,336 745 4.30 2,544 1,209
Non-Residential
Tier 1 5 47,077 129 1.12 144 15 2.13 275 131
Tier 2 6+ 647,621 1,774 1.65 2,928 1,153 3.14 5,576 2,649 Hydrant 9,893 27 3.68 100 73 7.01 190 90
TOTAL 3,280,554 4,154 11,891 0 34,663 261,803
Maximum Day Requirements Maximum Hour Requirements
Supply Base Delivery Max Day Max Hour Fire Pumping Meter Customer General TOTAL Operating Expenses $14,020,232 $3,037,699 $3,274,094 $2,613,856 $630,521 $0 $19,140 $2,218,654 $57,506 $25,871,702 Capital Expenses $0 $1,336,855 $1,351,542 $670,994 $207,051 $0 $27,261 $0 $81,907 $3,675,609 Total Cost of Service $14,020,232 $4,374,554 $4,625,635 $3,284,851 $837,572 $0 $46,401 $2,218,654 $139,412 $29,547,311 Allocation of General Cost $39,633 $41,908 $29,761 $7,588 $0 $420 $20,101 ($139,412) $0 Allocation of Public Fire Protection Cost ($845,160) $845,160 $0 Allocation of Peaking Cost to Meter ($4,247,465) ($3,016,296) $7,263,761 $0 Total Adjusted Cost of Service $14,020,232 $4,414,187 $420,079 $298,315 $0 $0 $8,155,742 $2,238,755 $0 $29,547,311 Unit of Service 3,280,554 3,280,554 4,154 11,891 34,663 261,803 Unit kgal kgal kgal/day kgal/day equiv meters bills
Unit Cost $4.27 $1.35 $101.12 $25.09 $19.61 $8.55

City of Brentwood / Water and Wastewater Rate Study 54
APPENDIX B:

Wastewater Cost-of-Service
Tables

City of Brentwood / Water and Wastewater Rate Study 55
Table B-1: Allocation of Functionalized O&M and Capital Expenses to Cost Causation Components – Wastewater O&M Categories I&I Flow BOD TSS Customer Laterals General TOTAL Collection 9.9% 90.1% 100.0%
Treatment 50.0% 25.0% 25.0% 100.0%
Utility Billing 100.0% 100.0%
Lateral Maintenance 100.0% 100.0%
Colletion Depreciation 9.9% 90.1% 100.0%
Treatment Depreciation 50.0% 25.0% 25.0%
O&M Categories I&I Flow BOD TSS Customer Laterals General Total Collection $334,905 $3,047,972 $0 $0 $0 $0 $0 $3,382,876 Treatment $0 $3,725,850 $1,862,925 $1,862,925 $0 $0 $0 $7,451,701 Utility Billing $0 $0 $0 $0 $1,126,916 $0 $0 $1,126,916 Lateral Maintenance $0 $0 $0 $0 $0 $384,016 $0 $384,016 TOTAL O&M EXPENSES $334,905 $6,773,822 $1,862,925 $1,862,925 $1,126,916 $384,016 $0 $12,345,509 % allocation 2.7% 54.9% 15.1% 15.1% 9.1% 3.1% 0.0% 100.0% Assets Categories I&I Flow BOD TSS Customer Laterals General TOTAL Land 100.0% 100.0%
Treatment 50.0% 25.0% 25.0% 100.0%
Collection 9.9% 85.1% 5.0% 100.0%
Buildings 100.0% 100.0%
Machinery & Equipment 100.0% 100.0%
Recycled Water 100.0% 100.0%
Assets Categories I&I Flow BOD TSS Customer Laterals General TOTAL Land $0 $0 $0 $0 $0 $0 $97,376 $97,376
Treatment $0 $18,264,540 $9,132,270 $9,132,270 $0 $0 $0 $36,529,081 Collection $3,940,166 $33,869,509 $0 $0 $0 $1,989,983 $0 $39,799,658 Buildings $0 $0 $0 $0 $0 $0 $1,061,610 $1,061,610
Machinery & Equipment $0 $0 $0 $0 $0 $0 $23,158 $23,158 Recycled Water $0 $0 $0 $0 $0 $0 $22,918,942 $22,918,942 TOTAL ASSETS $3,940,166 $52,134,049 $9,132,270 $9,132,270 $0 $1,989,983 $24,101,086 $100,429,824 % allocation 3.9% 51.9% 9.1% 9.1% 0.0% 2.0% 24.0% 100.0%

City of Brentwood / Water and Wastewater Rate Study 56
Table B-2: Derivation of Service Units – Wastewater
Table B-3: Unit Cost Calculation – Wastewater
Customer Class WW Flow (kgal) BOD (lbs/yr) TSS (lbs/yr) Units Accounts Bills/Year Residential WW 1,286,781 2,917,402 4,153,105 22,758 20,576 273,094 SFR (capped at 7 kgal/mo) 1,182,635 2,681,281 3,816,972 20,502 20,502 246,022 MFR (capped at 7 kgal/mo) 104,146 236,121 336,133 2,256 74 27,072 Non-Residential Rate Classes
Low Strength 30,496 21,992 30,492 43 43 517
Medium Low Strength 90,183 124,651 117,623 378 378 4,542 Medium Strength 4,761 11,865 5,194 5 5 62
Medium High Strength 81 454 461 1 1 12
High Strength 56,177 445,318 304,792 101 101 1,212
TOTAL 1,468,478 3,521,683 4,611,667 23,287 21,105 279,439 I&I WW Flow BOD TSS Customer Laterals General TOTAL
Operating Expenses $312,807 $6,326,870 $1,740,005 $1,740,005 $1,052,560 $358,678 $0 $11,530,925 Capital Expenses $189,832 $2,511,749 $439,981 $439,981 $0 $95,875 $1,161,158 $4,838,575 Total Cost of Service $502,639 $8,838,619 $2,179,986 $2,179,986 $1,052,560 $454,552 $1,161,158 $16,369,500 Allocation of General Cost $38,377 $674,829 $166,442 $166,442 $80,363 $34,705 ($1,161,158) $0 Allocated Cost of Service $541,015 $9,513,448 $2,346,428 $2,346,428 $1,132,923 $489,258 $0 $16,369,500 Adjustments to Fixed Charges $0 ($4,317,987) $4,317,987 $0 Adjusted Cost of Service $541,015 $5,195,462 $2,346,428 $2,346,428 $5,450,909 $489,258 $0 $16,369,500 Unit of Service 21,105 1,468,478 3,521,683 4,611,667 279,439 21,105 Units accounts kgal WW lbs/yr lbs/yr bills/yr Accounts
Unit Cost $2.14 $3.538 $0.666 $0.509 $19.51 $1.93
per month per kgal WW per lb per lb per month per month

City of Brentwood / Water and Wastewater Rate Study 57
Table B-4: Allocation of Cost to Customer Class – Wastewater Customer Class I&I WW Flow BOD TSS Customer Laterals General TOTAL Residential WW $527,462 $4,552,617 $1,943,808 $2,113,110 $5,327,149 $477,001 $14,941,147 SFR $525,559 $4,184,149 $1,786,485 $1,942,085 $4,799,063 $475,279 $13,712,620 MFR $1,904 $368,468 $157,323 $171,025 $528,086 $1,722 $1,228,527 Non-Residential
Low Strength $1,104 $107,894 $14,653 $15,514 $10,082 $998 $150,246 Medium Low Strength $9,702 $319,065 $83,052 $59,847 $88,594 $8,774 $569,035 Medium Strength $131 $16,845 $7,906 $2,643 $1,200 $119 $28,844 Medium High Strength $26 $287 $303 $235 $240 $24 $1,115 High Strength $2,589 $198,753 $296,706 $155,079 $23,644 $2,342 $679,113

City of Brentwood / Water and Wastewater Rate Study 58
APPENDIX C:

Projected Water Demand
Based on Reduction Level

City of Brentwood / Water and Wastewater Rate Study 59
Table 5-1: Projected Water Demand by Percent Usage Reduction Usage Data
(kgal) Monthly Tier
Proposed
Rates FY 2024 % Reduction
10%
Reduction % Reduction
20%
Reduction % Reduction
30%
Reduction % Reduction
40%
Reduction % Reduction
50%
Reduction
Residential
Tier 1 5 $3.18 1,174,264 -2.0% 1,150,779 -7.0% 1,092,066 -10.0% 1,056,838 -15.0% 998,125 -20.0% 939,411 Tier 2 14 $6.60 959,379 -12.0% 844,254 -25.0% 719,534 -30.0% 671,565 -45.0% 527,659 -55.0% 431,721 Tier 3 20 $8.33 226,581 -20.0% 181,265 -30.0% 158,607 -50.0% 113,291 -70.0% 67,974 -85.0% 33,987 Tier 4 21+ $8.43 215,738 -30.0% 151,017 -50.0% 107,869 -75.0% 53,935 -90.0% 21,574 -100.0% 0 Subtotal Residential 2,575,963 -10% 2,327,314 -19% 2,078,076 -26% 1,895,628 -37% 1,615,331 -45% 1,405,119 Non-Residential
Tier 1 5 $3.20 47,077 -1% 46,779 -5.0% 44,723 -8.0% 43,311 -10.0% 42,369 -10.0% 42,369 Tier 2 6+ $7.98 647,621 -5% 615,240 -10.0% 582,859 -15.0% 550,478 -20.0% 518,097 -25.0% 485,716 Subtotal Non-Residential 694,698 -5% 662,019 -10% 627,582 -15% 593,788 -19% 560,466 -24% 528,085 Hydrant $8.91 9,893 0% 9,893 0% 9,893 0% 9,893 0% 9,893 0% 9,893 Total Potable Water (kgal) 3,280,554 2,999,227 2,715,551 2,499,310 2,185,690 1,943,097 Total Potable Water (AF) 10,068 9,205 8,334 7,671 6,708 5,964 % Total Reduction -9% -17% -24% -33% -41%

CITY COUNCIL AGENDA ITEM NO. H.1
05/28/2024
SUBJECT: Capital Improvement Program (CIP) for 2024/25 – 2028/29 DEPARTMENT: Finance and Information Systems
STAFF: Kerry Breen, Director of Finance and Information Systems Rachel Corona, Accountant II

TITLE/RECOMMENDATION
A resolution adopting the 2024/25 – 2028/29 Capital Improvement Program (CIP).

FISCAL IMPACT
The associated FY 2024/25 budgets for revenues, appropriations, project funding transfers, and development impact fee revenue and expenditure budgets, as detailed in the 2024/25 – 2028/29 Capital Improvement Program, will be included in the draft 2024/25 – 2025/26 Operating Budget being brought forward to Council for consideration of adoption on June 25, 2024.

Future year costs and revenues will be reviewed every year by the City Council as part of the annual update and adoption of a new five-year CIP.

BACKGROUND
The City’s CIP is updated and approved annually and outlines the City of Brentwood’s five-year infrastructure and capital planning needs. The proposed 2024/25 – 2028/29 CIP includes projects that have been carefully evaluated to ensure: 1) the City’s capital improvement needs are met, both now and in the future, and 2) they support the City’s Mission Statement, General Plan and two-year City of Brentwood Strategic Plan adopted by the City Council in February 2022. An approved five-year CIP also assists in the preparation of the City’s Development Impact Fee Program updates along with Enterprise Rate Studies, which incorporate the City’s future capital needs where applicable.

In January of this year, the City Council approved the creation of the 2023/24 – 2025/26 Budget Ad Hoc Committee to provide oversight and guidance to the budgeting process by providing policy level direction related to the both the City’s

CITY COUNCIL AGENDA ITEM NO. H.1
05/28/2024
Capital and Operating Budgets. On March 4th, 2024, City Finance staff met with the Budget Ad Hoc committee and reviewed a preliminary draft of the 2024/25 – 2028/29 CIP. Staff incorporated feedback from that Ad Hoc meeting into the draft CIP.

On April 9, 2024, the proposed 2024/25 – 2028/29 CIP was presented to the City Council at the CIP Workshop and the draft CIP has been updated to incorporate Council direction from that workshop.

The following changes have been made to the proposed 2024/25 – 2028/29 CIP since the April 9th workshop:
 Fleet Electrification – This project was added to the 2024/25 – 2028/29 CIP.

This project supports compliance with regulations requiring public fleets to be converted to zero emissions vehicles, which make it necessary to design and install charging stations and other related infrastructure at City facilities for the charging of government-owned electric and plug in hybrid vehicles. The project is in the planning phase and design is anticipated to begin in FY 2024/25. Funding for this project will consist of the General Fund, Solid Waste Enterprise, Water Enterprise, and Wastewater Enterprise funds.  Comprehensive General Plan Update – The project timing was adjusted, with the project now set to begin in FY 2028/29, and funding contributions for the project spread over that timeframe.
 Canal Replacement Cost Share – Segment 5 (CIP #562-56420) – Funding and expenditure budgets have increased due to updated cost assumptions provided by the Contra Costa Water District (CCWD). The project timing was also moved out.

Other changes since the workshop include project manager updates for staffing changes, minor verbiage updates and minor typographical corrections. The CIP is attached to this staff report as Exhibit “A”.

On May 7, 2024, the proposed 2024/25 – 2028/29 CIP was presented to the Planning Commission for consistency with the City’s General Plan. A copy of the Planning Commission Resolution No. 24-020 is attached.

CITY COUNCIL STRATEGIC INITIATIVE
The 2024/25 – 2028/29 CIP includes the following projects that are designated as a part of the City’s Strategic Plan, listed by focus area and corresponding goal and initiative number:

Focus Area 1: Public Works

CITY COUNCIL AGENDA ITEM NO. H.1
05/28/2024
 1.1.a. Sand Creek Road Extension (CIP #336-31700)
 1.1.c. Brentwood Boulevard Widening North - Phase I (CIP #336-31620)  1.1.e. Parking Garage Security and Safety Enhancements (CIP #337-37262)  1.2.a. Solid Waste Organics Diversion (CIP #542-54021) Focus Area 4: Community Development
 4.1. Zoning Ordinance Update (CIP #337-37228)
 4.4.a. Housing Element Update and Safety Element Update (CIP #337-37258) Focus Area 5: Parks & Recreation Services
 5.2.a. Sand Creek Sports Complex (CIP #352-52446)
 5.3.a. Vineyards at Marsh Creek – Event Center/Amphitheater Phase I (CIP #337-37231)

PREVIOUS ACTION
Previous Action by the City Council is included on Attachment 1.

DATE OF NOTICE
Beginning May 17th, a copy of the draft 2024/25 – 2028/29 CIP was made available for public review at the following website:
https://www.brentwoodca.gov/financial-documents/CIP

ENVIRONMENTAL DETERMINATION
Not Applicable.

ALTERNATIVE OPTION(S)
Alternative Options to the Staff Recommendation:

1. Do not approve staff’s recommendation. This could result in delays in funding for capital projects.

2. Make changes to projects and/or budgets to be incorporated into the final version of the Capital Improvement Program.

3. Continue item with direction for staff to return with additional information. This would result in delays in funding for capital projects.

ATTACHMENT(S)

CITY COUNCIL AGENDA ITEM NO. H.1
05/28/2024

1. Previous Action

2. Exhibit “A” – 2024/25 – 2028/29 CIP

3. Resolution

4. Planning Commission Resolution No. 24-020

ATTACHMENT “1”
Previous actions related to this agenda item that were taken by the Council are listed below. To view prior actions and materials, and Brentwood Municipal Code references in the staff report, as applicable:
 Visit www.brentwoodca.gov/meetings, and select the meeting date(s) desired to see the reference materials and videos.
 Visit www.brentwoodca.gov/municipalcode to research references to the Brentwood Municipal Code and search by the code section(s) cited.

On July 26, 1994, the City Council approved the first five-year CIP. The CIP budget was added to the City’s adopted 1994/95 budget. The City Council also authorized the creation of the CIP Team to plan, design and administer the projects outlined in the CIP. The CIP Team was also made responsible for updating the CIP and preparing the report annually.

On July 22, 2014, the City Council approved a General Plan amendment (GPA 14- 002) to adopt the General Plan update project.

On February 22, 2022, by Resolution 2022-25, the City Council a) adopted the City of Brentwood Strategic Plan FY 2022/23 – FY 2023/24, and b) directed staff to incorporate strategic plan costs into the Operating and CIP Budgets, as well as in the City’s ten-year General Fund Fiscal Model.

On June 1, 2022, by Resolution 2022-86, the City Council adopted the 2022/23 – 2023/24 Operating Budget.

On June 13, 2023, by Resolution 2023-80, the City Council: 1) adopted the 2023/24 – 2027/28 Capital Improvement Program (CIP); 2) amended the FY 2023/24 Operating Budget as detailed in the CIP; and 3) amended the 2022/23 – 2026/27 CIP and 2022/23 Operating Budget for the Sand Creek Sports Complex.

On April 9, 2024, the City Council held a public workshop on the proposed 2024/25 – 2028/29 CIP.

150 City Park Way
Brentwood, CA 94513

CAPITAL

IMPROVEMENT

PROGRAM
2024/25 - 2028/29
DRAFT

EXHIBIT A

2 2024/25 – 2028/29 Capital Improvement Program
Introduction
City Council
Joel Bryant .................................................................................................................................................................................. Mayor Susannah Meyer ............................................................................................................................................................. Vice Mayor Jovita Mendoza .................................................................................................................................................... Council Member Tony Oerlemans ................................................................................................................................................... Council Member Pa’tanisha Pierson ............................................................................................................................................... Council Member Executive Team
Tim Ogden ................................................................................................................................................................... City Manager Katherine Wisinski ...................................................................................................................................... Interim City Attorney Allen Baquilar ............................................................................................................. Director of Engineering/City Engineer Sukari Beshears ............................................................................................ Director of Human Resources/Risk Manager Kerry Breen ...................................................................... City Treasurer/Director of Finance and Information Systems Darin Gale .................................................................................................................................................. Assistant City Manager Tim Herbert ................................................................................................................................................................ Chief of Police Alexis Morris ................................................................................................................ Director of Community Development Bruce Mulder ........................................................................................................................ Director of Parks and Recreation Casey Wichert ....................................................................................................................................... Director of Public Works

3 2024/25 – 2028/29 Capital Improvement Program
Introduction
Capital Improvement Program Field Team
Sonia Agostini, Accounting Manager Elaine McGurk, Project Services Specialist Christine Andrews, Asst. Director of Finance and I.S. Tim Nielsen, Development Services Manager Mike Baria, Chief Information Systems Officer Erik Nolthenius, Planning Manager Stephanie Butler, Administrative Supervisor Sheila Ogden, Accounting Technician Chris Chatburn, Engineering Technician Meghan Oliveira, Associate Engineer Rachel Corona, Accountant II Vatsal Patel, Engineering Manager Scott Dempsey, Fleet/Facilities Maint. Mgr. Renee Payette, Project Services Specialist Janice Ellis, Parks Planner Christine Quinn, Accountant II Debra Galey, Senior Analyst Corina Ramon, Accounting Technician Katie Germann, Administrative Supervisor Abraham Salinas, Senior Analyst Aman Grewal, Associate Engineer Heather Silfies, Engineering Services Specialist Matt Griggs, Information Systems Technician James Wolfe, Water Operations Manager Tammy Homan, Management Analyst Aaron Wanden, Park Maintenance Manager Michelle Inglis, Technical Assistant II Brant Wilson, Senior Associate Engineer Brian Johnson, Park/Maintenance Supervisor Chris Ziemann, Streets Manager Steve Kersevan, Engineering Manager

4 2024/25 – 2028/29 Capital Improvement Program
Table of Contents
City Council and Executive Team ........................................................................................................................................................ 2 Capital Improvement Program Field Team ..................................................................................................................................... 3 Table of Contents ...................................................................................................................................................................................... 4 Transmittal Letter ....................................................................................................................................................................................... 6 Budget Overview ........................................................................................................................................................................... 6 CIP Accomplishments .................................................................................................................................................................. 8 CIP Priorities .................................................................................................................................................................................... 9 Legislative Issues Affecting the Capital Budget .............................................................................................................. 12 Conclusion ..................................................................................................................................................................................... 13 Mission Statement/Vision and Culture/Core Values .................................................................................................................14 Certificate of Award - CSMFO ............................................................................................................................................................15 City Council Resolution No. 2024-XX ..............................................................................................................................................16 Planning Commission Resolution No. 24-XX ...............................................................................................................................17 Overview .....................................................................................................................................................................................................19 Basis of Accounting .................................................................................................................................................................... 20 How the Capital Improvement Program is Developed ................................................................................................ 20 How the Capital Improvement Program is Prioritized ................................................................................................. 21 How the Capital Improvement Program is Funded ...................................................................................................... 22 Funding Analysis ...........................................................................................................................................................22 Project Funding Limitations .....................................................................................................................................22 Capital Improvement Program Key Funding Sources .................................................................................................. 22 General Fund .................................................................................................................................................................. 22 Development Impact Fees ........................................................................................................................................ 22 Enterprise ......................................................................................................................................................................... 25 Federal/State/Agency ................................................................................................................................................. 25 Development Contributions .................................................................................................................................... 25 Replacement .................................................................................................................................................................. 25 Other ................................................................................................................................................................................. 25 State Loans and Bonds ............................................................................................................................................... 26 Future Financing and Alternate Funding ............................................................................................................ 26 How the Capital Improvement Program is Managed .................................................................................................. 26 How the Capital Improvement Program is Organized ................................................................................................. 28 How to Read the Project Detail Sheets .............................................................................................................................. 29 Summary Data
Building Permit Projections and Five-Year Population Growth Projection ..........................................................32 Capital Improvement Program Funding by Source ......................................................................................................33 Capital Revenue Summary – Sources by Fund ................................................................................................................34 Capital Revenue Summary – Sources of Funds in Detail ............................................................................................35 Capital Improvement Program Expenditures by Category ........................................................................................39 Project Expenditures by Category ........................................................................................................................................40 Summary of Capital Improvement Projects by Priority ...............................................................................................43

5 2024/25 – 2028/29 Capital Improvement Program
Table of Contents
Roadway Improvements
Expenditures by Project ..............................................................................................................................................................45 Summary ..........................................................................................................................................................................................46 Various Projects Map ..................................................................................................................................................................47 Individual Project Detail Sheets ..............................................................................................................................................48 Parks and Trails Improvements
Expenditures by Project ..............................................................................................................................................................58 Summary ..........................................................................................................................................................................................59 Various Projects Map ..................................................................................................................................................................60 Individual Project Detail Sheets ..............................................................................................................................................61 Water Improvements
Expenditures by Project ...............................................................................................................................................................75 Summary ..........................................................................................................................................................................................76 Various Projects Map ..................................................................................................................................................................77 Individual Project Detail Sheets ..............................................................................................................................................78 Wastewater Improvements
Expenditures by Project ...............................................................................................................................................................92 Summary ..........................................................................................................................................................................................93 Various Projects Map ..................................................................................................................................................................94 Individual Project Detail Sheets ..............................................................................................................................................95 Community Facilities Improvements
Expenditures by Project ............................................................................................................................................................ 103 Summary ....................................................................................................................................................................................... 104 Various Projects Map ............................................................................................................................................................... 105 Individual Project Detail Sheets ........................................................................................................................................... 106 Future Improvements ......................................................................................................................................................................... 117 Development Improvements ........................................................................................................................................................... 122 Appendix
Acronyms ...................................................................................................................................................................................... 129 Glossary of Terms ...................................................................................................................................................................... 130 Guide to Funds – Description of Funds ............................................................................................................................. 139 Index by Project Title ................................................................................................................................................................ 147