Agenda packet — Brisbane City Council, December 15, 2022 (part 2 of 2)

Compensation Earnable Government Codes
GC section 20636(b)(1) (applicable to Public Agency members) and 20636.1(b)(1) (applicable to School members) require pay amounts to be paid pursuant to publicly available pay schedules.

For example, GC section 20636 (b)(1) states:
“Payrate means the normal monthly rate of pay or base pay of the member paid in cash to similarly situated members of the same group or class of employment for services rendered on a full-time basis during normal working hours, pursuant to publicly available pay schedules. “Payrate,” for a member who is not in a group or class, means the monthly rate of pay or base pay of the member, paid in cash and pursuant to publicly available pay schedules, for services rendered on a full-time basis during normal working hours, subject to the limitations of paragraph (2) of subdivision (e).” CCR 570.5 specifies the required elements necessary to meet the definition of a publicly available pay schedule as follows:
(a) For purposes of determining the amount of “compensation earnable” pursuant to GC sections 20630, 20636, and 20636.1, payrate shall be limited to the amount listed on a pay schedule that meets all of the following requirements:
(1) Has been duly approved and adopted by the employer’s governing body in accordance with requirements of applicable public meetings laws; (2) Identifies the position title for every employee position; (3) Shows the payrate for each identified position, which may be stated as a single amount or as multiple amounts within a range;
(4) Indicates the time base, including, but not limited to, whether the time base is hourly, daily, bi-weekly, monthly, bi-monthly, or annually; (5) Is posted at the office of the employer or immediately accessible and available for public review from the employer during normal business hours or posted on the employer’s internet website;
(6) Indicates an effective date and date of any revisions; (7) Is retained by the employer and available for public inspection for not less than five years; and
(8) Does not reference another document in lieu of disclosing the payrate.

All eight (8) requirements must be met in one salary schedule for each member’s pay, in order for CalPERS to approve the pay amount as payrate and reportable compensation earnable. 169
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Circular Letter: 200-050-16
November 4, 2016

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Publicly Available Pay Schedules Government Code
If an agency cannot provide a document meeting the requirements for a publicly available pay schedule, then CalPERS must determine that the pay amount fails to meet the definition of payrate. CCR 570.5 (b)(1)-(4) outlines the process by which CalPERS may determine a member’s payrate when there is no publicly available pay schedule provided.

CCR 570.5 (b) states:
(b) Whenever an employer fails to meet the requirements of subdivision (a) above, the Board, in its sole discretion, may determine an amount that will be considered to be payrate, taking into consideration all information it deems relevant including, but not limited to, the following:
(1) Documents approved by the employer’s governing body in accordance with requirements of public meetings laws and maintained by the employer; (2) Last payrate listed on a pay schedule that conforms to the requirements of subdivision (a) with the same employer for the position at issue; (3) Last payrate for the member that is listed on a pay schedule that conforms with the requirements of subdivision (a) with the same employer for a different position;
(4) Last payrate for the member in a position that was held by the member and that is listed on a pay schedule that conforms with the requirements of subdivision (a) of a former CalPERS employer.

For assistance or questions, please direct your inquiries to the CalPERS Customer Contact Center at 888 CalPERS (or 888-225-7377).

Renee Ostrander, Chief
Employer Account Management Division
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Appendix A
Job Classification Hourly
Grade A
Hourly
Grade B
Hourly
Grade C
Hourly
Grade D
Hourly
Grade E Monthly Fixed Hourly Hourly Range Effective Date Bargaining Group FLSA Status Accounting Assistant I $ 26.75 $ 28.09 $ 29.50 $ 30.98 $ 32.53 1/2/2023 General Employees Non-Exempt Accounting Assistant II $ 29.45 $ 30.93 $ 32.48 $ 34.09 $ 35.80 1/2/2023 General Employees Non-Exempt Accounting Systems Analyst $ 40.44 $ 42.57 $ 44.70 $ 46.93 $ 49.28 1/2/2023 General Employees Non-Exempt Administrative Assistant $ 35.39 $ 37.16 $ 39.01 $ 40.96 $ 43.01 1/2/2023 General Employees Non-Exempt Administrative Management Analyst $ 45.04 $ 47.28 $ 49.66 $ 52.13 $ 54.75 1/2/2023 Confidential Employee Exempt Administrative Services Director $ 90.94 $ 95.48 $ 100.26 $ 105.26 $ 110.54 1/2/2023 Confidential Management Exempt Assistant Engineer I $ 41.20 $ 43.27 $ 45.43 $ 47.71 $ 50.09 1/2/2023 General Employees Non-Exempt Assistant Engineer II $ 45.33 $ 47.58 $ 49.97 $ 52.46 $ 55.09 1/2/2023 General Employees Non-Exempt Assistant City Manager $ 104.58 $ 109.80 $ 115.30 $ 121.05 $ 127.12 1/2/2023 Confidential Management Exempt Assistant to the City Manager $ 69.68 $ 73.16 $ 76.83 $ 80.66 $ 84.71 1/2/2023 Executive Management Exempt Assistant Fire Marshal $ 78.22 $ 82.13 $ 86.24 $ 90.55 $ 95.08 1/2/2023 Brisbane Fire Management Exempt Associate Civil Engineer $ 53.97 $ 56.66 $ 59.49 $ 62.47 $ 65.60 1/2/2023 Mid-Management/Professional Exempt Associate Planner $ 47.68 $ 50.07 $ 52.58 $ 55.20 $ 57.97 1/2/2023 General Employees Non-Exempt Cashier $ 15.50 $ 16.28 $ 17.09 $ 17.94 $ 18.84 1/2/2023 Unrepresented Non-Exempt C/CAG Stormwater Program Director $ 71.29 $ 74.86 $ 78.60 $ 82.54 $ 86.66 1/2/2023 Mid-Management/Professional Exempt City Clerk $ 56.39 $ 59.21 $ 62.17 $ 65.29 $ 68.54 1/2/2023 Executive Management Exempt City Manager $ - $ - $ - $ - $ - $ 142.14 1/2/2023 Unrepresented Exempt Code Enforcement Officer $ 38.45 $ 40.38 $ 42.39 $ 44.51 $ 46.74 1/2/2023 General Employees Non-Exempt Communications Digital and Media Coordinator $ 36.11 $ 37.91 $ 39.81 $ 41.80 $ 43.88 1/2/2023 General Employees Non-Exempt Communications Manager $ 52.68 $ 55.45 $ 58.36 $ 61.43 $ 64.67 1/2/2023 Mid-Management/Professional Exempt Community Development Director $ 87.94 $ 92.34 $ 96.96 $ 101.81 $ 106.91 1/2/2023 Executive Management Exempt Community Development Technician $ 36.11 $ 37.91 $ 39.81 $ 41.80 $ 43.88 1/2/2023 General Employees Non-Exempt Community Services Officer $ 31.48 $ 33.51 $ 35.19 $ 36.95 $ 38.79 1/2/2023 General Employees Non-Exempt Council Member $ - $ - $ - $ - $ - $ 400.00 1/2/2023 Elected Position Crossing Guard $ 15.50 $ 16.28 $ 17.09 $ 17.94 $ 18.84 1/2/2023 Unrepresented Non-Exempt Deputy City Clerk/Executive Assistant $ 42.39 $ 44.51 $ 46.74 $ 49.09 $ 51.53 1/2/2023 Confidential Exempt Deputy Director of Public Works $ 79.65 $ 83.63 $ 87.82 $ 92.21 $ 96.82 1/2/2023 Mid-Management/Professional Exempt Deputy Finance Director $ 71.29 $ 74.86 $ 78.60 $ 82.54 $ 86.66 1/2/2023 Mid-Management/Professional Exempt Director of Marina/Aquatics Services $ 58.37 $ 61.29 $ 64.36 $ 67.58 $ 70.95 1/2/2023 Executive Management Exempt Engineering Technician $ 39.72 $ 41.71 $ 43.79 $ 45.96 $ 48.28 1/2/2023 General Employees Non-Exempt Executive Administrative Assistant $ 36.68 $ 38.50 $ 40.43 $ 42.46 $ 44.58 1/2/2023 General Employees Non-Exempt Facility Attendant $ 18.20 $ 19.11 $ 20.07 $ 21.07 $ 22.12 1/2/2023 Unrepresented Non-Exempt Finance Director $ 87.04 $ 91.38 $ 95.96 $ 100.77 $ 105.78 1/2/2023 Confidential Management Exempt Financial Services Manager $ 61.58 $ 64.65 $ 67.89 $ 71.29 $ 74.86 1/2/2023 Mid-Management/Professional Exempt Fire Captain $ 43.01 $ 45.14 $ 47.41 $ 49.78 $ 52.27 1/2/2023 IAFF Local 2400 Non-Exempt Fire Prevention Officer $ 50.38 $ 55.67 $ 58.45 $ 61.36 $ 64.43 1/2/2023 IAFF Local 2400 Non-Exempt Fire Trainee $ - $ - $ - $ - $ - $ 25.06 1/2/2023 IAFF Local 2400 Non-Exempt Firefighter $ 35.99 $ 37.78 $ 39.67 $ 41.64 $ 43.73 1/2/2023 IAFF Local 2400 Non-Exempt Firefighter II $ 39.59 $ 41.56 $ 43.64 $ 45.81 $ 48.10 1/2/2023 IAFF Local 2400 Non-Exempt Firefighter/Paramedic $ 35.99 $ 37.78 $ 39.67 $ 41.64 $ 43.73 1/2/2023 IAFF Local 2400 Non-Exempt Firefighter/Paramedic II $ 39.59 $ 41.56 $ 43.64 $ 45.81 $ 48.10 1/2/2023 IAFF Local 2400 Non-Exempt Geographic Information System Manager $ 52.68 $ 55.45 $ 58.36 $ 61.43 $ 64.67 1/2/2023 Mid-Management/Professional Exempt Habitat Restoration Lead Worker $ - $ - $ - $ - $ - $ 15.50 1/2/2023 Unrepresented Non-Exempt Harbormaster $ 49.66 $ 52.13 $ 54.74 $ 57.48 $ 60.36 1/2/2023 Mid-Management/Professional Exempt Head Lifeguard $ 21.82 $ 22.92 $ 24.06 $ 25.28 $ 26.53 1/2/2023 Unrepresented Non-Exempt History Project Asst $ 36.94 $ 38.79 $ 40.72 $ 42.75 $ 44.90 1/2/2023 Unrepresented Non-Exempt Human Resources Administrator $ 72.75 $ 76.39 $ 80.21 $ 84.22 $ 88.43 1/2/2023 Confidential Exempt Human Resources Technician $ 36.11 $ 37.91 $ 39.81 $ 41.80 $ 43.88 1/2/2023 General Employees Non-Exempt Information Technology & Systems Administrator $ 54.29 $ 57.00 $ 59.85 $ 62.85 $ 66.00 1/2/2023 Mid-Management/Professional Exempt Intern $ - $ - $ - $ - $ - $15.50 - $20.00 1/2/2023 Unrepresented Non-Exempt Lifeguard $ 16.56 $ 17.39 $ 18.26 $ 19.17 $ 20.12 1/2/2023 Unrepresented Non-Exempt Management Analyst (Part-time) $ 40.84 $ 42.90 $ 45.03 $ 47.28 $ 49.65 1/2/2023 Unrepresented Non-Exempt City of Brisbane Master Pay Schedule
Approved per Resolution No. 2022-XX
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Job Classification Hourly
Grade A
Hourly
Grade B
Hourly
Grade C
Hourly
Grade D
Hourly
Grade E Monthly Fixed Hourly Hourly Range Effective Date Bargaining Group FLSA Status Marina Maintenance Worker I $ 30.96 $ 32.50 $ 34.13 $ 35.84 $ 37.64 1/2/2023 General Employees Non-Exempt Marina Maintenance Worker II $ 34.05 $ 35.75 $ 37.54 $ 39.41 $ 41.38 1/2/2023 General Employees Non-Exempt Marina Maintenance Worker I ( Part-time) $ 31.57 $ 33.15 $ 34.80 $ 36.56 $ 38.38 1/2/2023 Unrepresented Non-Exempt Marina Maintenance Worker II ( Part-time) $ 34.71 $ 36.48 $ 38.27 $ 40.17 $ 42.21 1/2/2023 Unrepresented Non-Exempt Marina Services Director $ 54.56 $ 57.29 $ 60.16 $ 63.16 $ 66.32 1/2/2023 Executive Management Exempt Office Assistant $ 28.38 $ 29.75 $ 31.24 $ 32.80 $ 34.45 1/2/2023 General Employees Non-Exempt Office Assistant (Part-Time) $ 28.90 $ 30.33 $ 31.84 $ 33.46 $ 35.13 1/2/2023 Unrepresented Non-Exempt Office Specialist $ 33.27 $ 34.92 $ 36.68 $ 38.50 $ 40.43 1/2/2023 General Employees Non-Exempt Office Specialist (Part-Time) $ 33.94 $ 35.62 $ 37.40 $ 39.28 $ 41.24 1/2/2023 Unrepresented Non-Exempt Park/Beach/Recreation Commissioner $ - $ - $ - $ - $ - $ 100.00 1/2/2023 Appointed Position Parks & Recreation Director $ 83.85 $ 88.06 $ 92.45 $ 97.07 $ 101.93 1/2/2023 Executive Management Exempt Parks/Facilities Maintenance Worker I $ 30.96 $ 32.50 $ 34.13 $ 35.84 $ 37.64 1/2/2023 General Employees Non-Exempt Parks/Facilities Maintenance Worker I (Part-Time) $ 31.57 $ 33.15 $ 34.80 $ 36.56 $ 38.38 1/2/2023 Unrepresented Non-Exempt Parks/Facilities Maintenance Worker II $ 34.05 $ 35.75 $ 37.54 $ 39.41 $ 41.38 1/2/2023 General Employees Non-Exempt Payroll/Utility Billing Technician $ 36.11 $ 37.91 $ 39.81 $ 41.80 $ 43.88 1/2/2023 General Employees Non-Exempt Planning Commissioner $ - $ - $ - $ - $ - $ 100.00 1/2/2023 Appointed Position Police Chief $ 102.63 $ 107.76 $ 113.14 $ 118.81 $ 124.73 1/2/2023 Police Chief Exempt Police Commander $ 92.52 $ 97.15 $ 102.01 $ 107.11 $ 112.46 1/2/2023 Police Commander Exempt Police Officer $ 47.02 $ 49.37 $ 51.84 $ 54.43 $ 57.16 1/2/2023 Brisbane Police Officers Association* Non-Exempt Police Officer - 40 hour shift (Detective/SRO) $ 49.37 $ 51.84 $ 54.43 $ 57.16 $ 60.01 1/2/2023 Brisbane Police Officers Association* Non-Exempt Police Sergeant $ 56.65 $ 59.48 $ 62.46 $ 65.58 $ 68.86 1/2/2023 Brisbane Police Officers Association* Non-Exempt Police Trainee $ - $ - $ - $ - $ - $ 34.80 1/2/2023 Unrepresented Non-Exempt Pre-School Teacher $ 18.31 $ 19.24 $ 20.19 $ 21.22 $ 22.28 1/2/2023 Unrepresented Non-Exempt Principal Analyst $ 63.00 $ 66.16 $ 69.46 $ 72.92 $ 76.58 1/2/2023 Confidential Exempt Principal Planner $ 67.10 $ 70.46 $ 73.98 $ 77.68 $ 81.57 1/2/2023 Mid-Management/Professional Exempt Program Manager - SMCWPPP $ 66.37 $ 69.70 $ 73.18 $ 76.84 $ 80.69 1/2/2023 Mid-Management/Professional Exempt Public Service Aide $ 16.29 $ 17.12 $ 17.96 $ 18.85 $ 19.81 1/2/2023 Unrepresented Non-Exempt Public Works Director/City Engineer $ 102.96 $ 108.11 $ 113.50 $ 119.19 $ 125.15 1/2/2023 Executive Management Exempt Public Works Inspector $ 50.81 $ 53.36 $ 56.02 $ 58.81 $ 61.76 1/2/2023 General Employees Non-Exempt Public Works Lead Maintenance Worker $ 40.87 $ 42.91 $ 45.04 $ 47.31 $ 49.66 1/2/2023 General Employees Non-Exempt Public Works Maintenance Worker I $ 30.96 $ 32.50 $ 34.13 $ 35.84 $ 37.64 1/2/2023 General Employees Non-Exempt Public Works Maintenance Worker I (Part-time) $ 31.57 $ 33.15 $ 34.80 $ 36.56 $ 38.38 1/2/2023 Unrepresented Non-Exempt Public Works Maintenance Worker II $ 34.05 $ 35.75 $ 37.54 $ 39.41 $ 41.38 1/2/2023 General Employees Non-Exempt Public Works Superintendent $ 66.05 $ 69.35 $ 72.82 $ 76.47 $ 80.29 1/2/2023 Mid-Management/Professional Exempt Public Works Supervisor $ 50.48 $ 53.01 $ 55.66 $ 58.44 $ 61.37 1/2/2023 Mid-Management/Professional Exempt Public Works Team Leader $ 45.80 $ 48.21 $ 50.75 $ 53.42 $ 56.23 1/2/2023 Mid-Management/Professional Exempt Receptionist $ 28.34 $ 29.75 $ 31.24 $ 32.80 $ 34.45 1/2/2023 General Employees Non-Exempt Receptionist (Part-time) $ 28.90 $ 30.33 $ 31.84 $ 33.46 $ 35.13 1/2/2023 Unrepresented Non-Exempt Recreation Leader $ 18.28 $ 19.19 $ 20.16 $ 21.16 $ 22.22 1/2/2023 Unrepresented Non-Exempt Recreation Leader Aide $ 15.50 $ 16.28 $ 17.09 $ 17.94 $ 18.84 1/2/2023 Unrepresented Non-Exempt Recreation Manager $ 62.13 $ 65.23 $ 68.49 $ 71.92 $ 75.51 1/2/2023 Mid-Management/Professional Exempt Recreation Program Coordinator $ 31.43 $ 33.54 $ 35.21 $ 36.97 $ 38.82 1/2/2023 General Employees Non-Exempt Recreation Supervisor $ 45.89 $ 48.21 $ 50.60 $ 53.13 $ 55.79 1/2/2023 Mid-Management/Professional Exempt Regional Compliance Program Manager $ 52.68 $ 55.45 $ 58.36 $ 61.43 $ 64.67 1/2/2023 Mid-Management/Professional Exempt Reserve Police Officer $ 33.59 $ 35.27 $ 37.03 $ 38.88 $ 40.83 1/2/2023 Unrepresented Non-Exempt Senior Accounting Assistant $ 33.36 $ 35.04 $ 36.78 $ 38.63 $ 40.54 1/2/2023 General Employees Non-Exempt Senior Civil Engineer $ 66.37 $ 69.70 $ 73.18 $ 76.84 $ 80.69 1/2/2023 Mid-Management/Professional Exempt Senior Human Resources Analyst $ 50.32 $ 52.83 $ 55.48 $ 58.25 $ 61.16 1/2/2023 Confidential Exempt Senior Management Analyst $ 49.33 $ 51.79 $ 54.38 $ 57.10 $ 59.94 1/2/2023 Mid-Management/Professional Exempt Senior Planner $ 56.75 $ 59.59 $ 62.57 $ 65.71 $ 68.98 1/2/2023 Mid-Management/Professional Exempt Senior Recreation Leader $ 23.46 $ 24.63 $ 25.86 $ 27.15 $ 28.52 1/2/2023 Unrepresented Non-Exempt Sustainability Manager $ 52.68 $ 55.45 $ 58.36 $ 61.43 $ 64.67 1/2/2023 Mid-Management/Professional Exempt Special Assistant $ - $ - $ - $ - $ - $15.50-$75.00 1/2/2023 Unrepresented Non-Exempt Spe Coun-Maj Dev Pro $ - $ - $ - $ - $ - $ 175.04 1/2/2023 Confidential Management Exempt Swim Instructor $ 18.06 $ 18.97 $ 19.92 $ 20.92 $ 21.97 1/2/2023 Unrepresented Non-Exempt 172
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Job Classification Hourly
Grade A
Hourly
Grade B
Hourly
Grade C
Hourly
Grade D
Hourly
Grade E Monthly Fixed Hourly Hourly Range Effective Date Bargaining Group FLSA Status Van Driver $ 16.99 $ 17.85 $ 18.75 $ 19.69 $ 20.67 1/2/2023 Unrepresented Non-Exempt Water Quality Technician $ 34.05 $ 35.75 $ 37.54 $ 39.41 $ 41.38 1/2/2023 General Employees Non-Exempt 173
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File Attachments for Item:

AA. Review Projected Water and Sewer Rate Increases and Direct Staff to begin the 218 Process to increase Rates
(The following rate increases are being proposed: Fixed water charge increase from $22.67 to $33.52 for 5/8th inch meter and 9% increase each year until 2026/27. Water rate will increase 9% a year until 2026/27. Wastewater rate increase of approximately 25% rate increase each year until 2026/27)
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CITY COUNCIL AGENDA REPORT
Meeting Date: 12/15/2022
From: Stuart Schillinger, Assistant City Manager
Subject: Review Projected Water and Sewer Rate Increases and Direct Staff to begin the 218 Process to increase Rates Community Goal/Result
Community Prudent
Safe Community
Ecological Sustainability
Purpose
Ensure the City’s water and sewer rates reflect the full cost of providing clean water and effective wastewater disposal to the various users while encouraging conservation of resources.

Recommendation
Direct staff to begin the Proposition 218 process for increasing water and sewer rates.

Background
On August 13, 2001, the City Council discussed Ordinance No. 458, which set the process for determining future water and sewer rate increases.

Subsequent to passing Ordinance No. 458, the California Supreme Court ruled that water and sewer charges are property related and subject to Proposition 218, the Right to Vote on Taxes Act. As such, we are required to notify property owners regarding any increase and hold a public hearing at least 45 days later to allow time for community input. As a courtesy to our customers, we also notify renters of the forthcoming change in rates.

The last rate study the City had performed was in 2000. The City hired FCSG and Carollo Engineers to complete a rate structure study and Capital Improvement Plan. The City has been working from this rate study for the last twenty years. The City has taken the rates recommended in the Plan and adopted them based on need. The last operational rate increase went into effect in 2012. Additionally, the City has implemented its first capital improvement charge to pay for bonds issued in 2015. This was the first of an anticipated series of Capital Rate Charges in order to pay for the water and wastewater Capital Improvement Plan. The plan is to sell bonds approximately every five years over 20 years. The bonds would have a duration 175
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of 20 years so after 20 years there will be a set Capital Charge that will only be reviewed to ensure it can continue to pay for the necessary Capital Improvements.

A drought reserve charge was implemented in 2019. This would ensure that during a drought the City would not need to raise rates as customers lowered their water usage as other water providers do.

In 2022 the City Council approved the second of four increases for capital improvements.

Since 2012 the amount we have paid for water has increased from $2.69 per unit to $4.50 per unit, an increase of 67%. Wastewater treatment has gone from $4.81 per unit to $11.63 per unit, an increase of 242%. The City has been able to keep operational rates constant due to an increase in usage among users and the use of one-time revenue sources (i.e. Connection fees).

In April 2021 the City retained the firm Lechowicz and Tseng to review the City’s operational water and sewer rates.

Over the past 18 months, the City Council Infrastructure Subcommittee has worked with Lechowicz and Tseng to develop the proposed rate increases presented this evening.

Discussion
Water and Sewer rates to pay for the operations of the system Currently the City’s water and sewer bill has a number of lines:
• Water Service Charge – This is the charge for having a meter connected to the system and for the City to ensure that we have enough treated water available to provide the full capacity of that meter and all other meters at any given time. • Water Usage – This is based on the number of units of water used during the billing period (Billing is every two months). 1 unit equals 100 cubic ft. of water or approximately 748 gallons
• Sewer Charge – For residential customers it is based on the average water usage from October through January. It changes every April. For commercial customers it is based on the actual water used during the billing period.
• Capital Project Charge – This is to pay for capital projects. The current charge is for the repayment of the 2015 water and sewer bonds. It is anticipated that this charge will be increased every 5 years between 2015 and 2035. City Council previously approved a plan to create a 20 year capital project plan paid for by the Capital Project Charge.

Overtime the Capital Project Charge will get to a rate which will provide a source of funding for Capital Projects without a need for large increases. The charge is based on the amount of water used between February and June.
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• Drought Contingency Fund – This charge was adopted on February 1, 2018. It was set to create a reserve fund to cover loss of revenue during a drought. Traditionally, utilities have increased rates during droughts since lower water usage, due to customers conserving water, results in lower revenues but often not as large of a decrease in costs.

The reason for this is approximately 70% of our costs are fixed but 70% of revenue is dependent on water usage. The City anticipates that the Drought Reserve will be fully funded by 2025 if a drought does not occur.

Lechowicz and Tseng reviewed the City’s Water Service Charge, Water Usage, and Sewer Charge. The firm reviewed the City’s rates, usage and revenue produced from the rates. Their analysis showed that for FY 2020/21 and FY 2021/22 the Utility Fund was operating at a loss.

The City used fund balance to cover these losses. However, in the long term the Utility Fund should be able to operate at least at a breakeven and possibly at net positive.

There are two reasons the Utility Fund has operated at a net loss over the past two years. First, there has been a decrease of water usage among our commercial accounts due to COVID.

Many of our main users had a reduction in their water usage. Six of largest 25 users in 2018/19 reduced their water usage by 12,300 units during 2019/20. Additionally, the cost of wastewater treatment has increased. For wastewater treatment the cost per unit has increased from $7.26 per unit in 2019/20 to $11.63 in 2021/22. This is an increase of 60% in two years.

This means it is time for the City to look at increasing its rates for both water and wastewater.

One proposal from our consultant is to increase the base charge for water service from $22.67 to $33.52 for 5/8th inch meters (the prevalent meter for residential and small business use).

This will help the City move from a variable rate for water usage to a fixed so that we will not be as impacted by reduced water usage in the future. This is an increase of 50% in the first year and the proposal is 9% each year thereafter through 2026/27. In 2026/27 the Fixed Charge would be $46.38.

The proposal is also to reduce the number of tiers of charges for water users. The reason for this is to ensure that users are not subsidizing other users. State law over the past 20 years has been interpreted by the courts to be stricter on the use of tier rates and using them to allow smaller users to pay less of the cost of the overall system. Therefore, the proposal is to reduce the number of tiers from six to two.

Since the cost of wastewater, treatment has increased so dramatically over the years the increase needed for sewer is higher. The proposal is to decrease the flat charge in the first year by 7% but increase it by 25% each year through 2027/28. The proposal for the variable charge is to combine both tiers into one and increase the variable charge to $8.29 for each unit used and then increase it by 25% for each year through 2027/28. The flat charge would range from 177
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$64.20 in 2023/24 to $153.66 in 2027/28. The Variable Charge for residential customers would range from $8.29 in 2023/24 to $18.67 in 2027/28.

If Council approves this proposal, we would probably still reduce our cash reserves for fiscal years 2023/24 through 2026/27 but would see a replenishment of reserves in 2027/28.

As stated in the background the City has not increased it operational rate since 2012. By controlling costs, increases to usage in the early years, and one-time revenue sources the City has been able to postpone needed increases until this year. The City reviewed the rates and determined due to recessions, COVID, and increases for the drought contingency fund and capital projects it was better to delay the increases. If the City had increased the rates incrementally throughout the last 10 years the average customer who uses 10 units of water every two months would have paid an additional $5,100 more over the decade.

Low Income Rate Assistance Program
The City offers all users who are enrolled in the PG&E CARE program the ability to be enrolled in the City’s Low Income Rate Assistance (LIRA) Program. Over the years the percentage reduction in rates has increased. As the City Council increased rates it determined it did not want to increase water and sewer rates on low-income individuals. However, there is no LIRA reduction for either the Capital Charge or Drought Contingency Charge. The reason for this is an absolute dollar amount was being raised by these rates. The decrease in revenue due to the LIRA program is offset by the City’s General Fund. This is because, according to State Law, users can not offset the cost for other users. Currently, the City spends approximately $40,000 a year from the General Fund for the LIRA program. The current reductions are as follows:

Water Service 36.75% discount
Water Use 49.90% discount
Sewer 42.40% discount
Fire Service 36.75% discount
If the City Council wishes to allocate the same dollar amount in the future then a discount of 25% on the bill would do this. If the Council wishes to allocate additional General Fund dollars to this program it can increase the amount of the discount. Staff would recommend setting a flat discount rate for the bill instead of different discount rates for each type service.

Proposition 218 Process
As stated in the background we will need to mail a letter letting our property owners and our utility users know about the proposed rate increase. If more than 50% of the property owners and utility users protest the rate increase it cannot be imposed and the City will not be able to 178
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increase the rates to ensure the continued ability to provide clean drinking water and safe conveyance of wastewater to the treatment plan.

Fiscal Impact
Current Bill Proposed Rates – July 1, 2023
4 units Water Charge - $22.67
Water Usage – $14.80
Sewer Charge - $80.11
Drought Reserve -$2.32
Water Charge - $33.35
Water Usage - $18.89
Sewer Charge -$97.36
Drought Reserve -$2.32
10 units Water Charge - $22.67
Water Usage - $60.18
Sewer Charge - $106.67
Drought Reserve $2.32
Water Charge-$33.35
Water Usage - $56.68
Sewer Charge - $147.09
Drought Reserve -$2.32
20 units Water Charge - $22.67
Water Usage - $ 170.68
Sewer Charge - $183.27
Drought Reserve $6.99
Water Charge- $33.35
Water Usage - $183.18
Sewer Charge - $229.98
Drought Reserve - $6.99
100 units irrigation – 2
inch meter
Water Charge – $92.47
Water Usage -$1,225.46
Sewer Charge $0
Drought Reserve $102.14
Water Charge - $88.95
Water Usage - $1,131.64
Sewer Charge - $0
Drought Reserve - $102.14
Measure of Success
The City is able to provide clean-safe drinking water and effectively disposes of wastewater as economically as possible while being financially sustainable.

Stuart Schillinger ________________________
Stuart Schillinger, Assistant City Manager Clay Holstine, City Manager Attachment Report from Lechowicz and Tseng
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CITY OF BRISBANE
Water and Sewer Utility
Rate Study

DRAFT REPORT
December 7, 2022
909 Marina Village Parkway #135
Alameda, CA 94501
(510) 545-3182
www.LTmuniconsultants.com
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City of Brisbane
Water and Sewer Utility Rate Study 2022

TABLE OF CONTENTS

Section 1: INTRODUCTION.........................................................................................................................1

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

1.2 Requirements of Proposition 218.................................................................................................1

1.3 Rate Study Process........................................................................................................................2 Section 2: WATER RATE STUDY..................................................................................................................5

2.1 Current Water Rates.....................................................................................................................5

2.2 Water System Overview .............................................................................................................10

2.3 Water Financial Plan ...................................................................................................................13

2.4 Water Cost Allocation .................................................................................................................31

2.5 Water Rate Design Considerations.............................................................................................32

2.6 Water Rate Design for Scenario #3.............................................................................................36

2.7 Water Low Income Discount.......................................................................................................48 Section 3: SEWER RATE STUDY ................................................................................................................49

3.1 Current Wastewater Rates..........................................................................................................49

3.2 Wastewater System Overview....................................................................................................50

3.3 Wastewater Financial Plan..........................................................................................................51

3.4 Sewer Cost Allocation .................................................................................................................69

3.5 Sewer Rate Design ......................................................................................................................71

3.6 Sewer Rate Design for Scenario #3.............................................................................................73

3.7 Sewer Low Income Discount.......................................................................................................81 Section 4: UTILITY FUND 540 – COMBINED CASH FLOW.........................................................................83

4.1 Combined Cash Flow Projection .................................................................................................83

4.2 Combined Sample Bill Impacts....................................................................................................85 182
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LIST OF TABLES
Table 1: Current Bi-Monthly Residential Water Rates..................................................................................7 Table 2: Current Bi-Monthly Commercial Water Rates................................................................................8 Table 3: Current Bi-Monthly Irrigation Water Rates.....................................................................................9 Table 4: Number of Water Accounts by Meter Size & Customer Class for 2020 .......................................11 Table 5: Annual Water Consumption..........................................................................................................12 Table 6: Utility Fund (Fund 540) Reserves..................................................................................................14 Table 7: Utility Fund (Fund 540) Budgeted Revenues ................................................................................15 Table 8: Water Utility Revenues .................................................................................................................16 Table 9: Water Utilities (Fund 1110) Operating Expenses..........................................................................17 Table 10: GVMID Combined Utility (Fund 6120) Operating Expenses .......................................................18 Table 11: Water Utility Combined Operating Expenses .............................................................................19 Table 12: Water Utility Projection of Future Operating Expenses .............................................................19 Table 13: SFPUC Water Purchase Costs......................................................................................................20 Table 14: Water Net Revenues...................................................................................................................22 Table 15: 2015 Utility Revenue Bonds - Debt Service Schedule.................................................................23 Table 16: Scenario #1: No Rate Increases - Water Cash Flow Projection...................................................26 Table 17: Scenario #2: 8% Annual Rate Increases - Water Cash Flow Projection ......................................27 Table 18: Scenario #3: 9% Annual Rate Increases - Water Cash Flow Projection ......................................28 Table 19: Water Scenario Comparison .......................................................................................................29 Table 20: Water Cost Allocation .................................................................................................................32 Table 21: Projected Water Consumption with 1 Unit Allotment................................................................34 Table 22: Projected Customer Growth & Water Consumption..................................................................35 Table 23: Current Water Sales - Fixed vs. Variable Water Service Revenue ..............................................36 Table 24: Annual Revenue Requirement Allocation...................................................................................37 Table 25: Water Fixed Charge Derivation...................................................................................................38 Table 26: Consumption Charge Rate Derivation.........................................................................................39 Table 27: Proposed Bimonthly Water Rates...............................................................................................40 Table 28: Sample Bimonthly Water Bill Impacts.........................................................................................41 Table 29: Water Low Income Discount.......................................................................................................48 Table 30: Current Bi-Monthly Sewer Rates (Effective 10/15/12)...............................................................50 Table 31: Current Sewer Accounts & Flow by Customer Class...................................................................51 Table 32: Utility Fund (Fund 540) Reserves................................................................................................52 Table 33: Utility Fund (Fund 540) Budgeted Revenues ..............................................................................53 Table 34: Sewer Utility Revenues ...............................................................................................................54 Table 35: Sewer Utility (Fund 6130) Operating Expenses...........................................................................55 Table 36: GVMID Combined Utility (Fund 6120) Operating Expenses .......................................................56 Table 37: Sewer Utility Combined Operating Expenses .............................................................................57 Table 38: Sewer Utility Projection of Future Operating Expenses..............................................................58 183
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Table 39: Sewer Treatment Processing Costs.............................................................................................58 Table 40: Sewer Net Revenues...................................................................................................................60 Table 41: 2015 Utility Revenue Bonds - Debt Service Schedule.................................................................61 Table 42: Sewer Scenario #1: No Rate Increases – Sewer Cash Flow Projection .......................................64 Table 43: Sewer Scenario #2: 8% Annual Rate Increases – Sewer Cash Flow Projection...........................65 Table 44: Sewer Scenario #3: 25% Annual Rate Increases – Sewer Cash Flow Projection.........................66 Table 45: Sewer Scenario Comparison .......................................................................................................67 Table 46: Current Sewer Service Revenues – Fixed vs. Variable Revenue Recovery..................................70 Table 47: Sewer Cost Allocation – 30% Fixed/70% Variable.......................................................................71 Table 48: Sewer Flow and Loadings............................................................................................................72 Table 49: Projected Growth, Sewer Flow, and Loadings............................................................................73 Table 50: Sewer Flat Charge Rate Derivation .............................................................................................74 Table 51: Sewer Scenario #3 - Sewer Variable Unit Rate Derivation for 2023/24......................................75 Table 52: Sewer Scenario #3 - Volume Rate by Customer Classes for 2023/24.........................................75 Table 53: Proposed Bi-Monthly Sewer Rates..............................................................................................76 Table 54: Sewer Scenario #3 – Sample Bimonthly Sewer Bills ...................................................................77 Table 55: Sewer Low Income Discount.......................................................................................................82 Table 56: Combined Water and Sewer Cash Flow Projection ....................................................................84 Table 57: Sample Residential Combined Bill Impacts.................................................................................85

LIST OF FIGURES
Figure 1: Comprehensive Cost of Service Study Process..............................................................................3 Figure 2: Historical SFPUC Water Purchases...............................................................................................13 Figure 3: Historical SFPUC Wholesale Water Rates....................................................................................21 Figure 4: Water Scenario Comparison - Ending Water Fund Reserve Fund Balance..................................30 Figure 5: Comparison of Bimonthly Water Bill for Typical Residential Customer......................................46 Figure 6: Bimonthly Water Bill Survey ........................................................................................................47 Figure 7: Historical San Francisco Treatment Processing Rates .................................................................59 Figure 8: Sewer Scenario Comparison - Ending Water Fund Reserve Fund Balance..................................68 Figure 9: Comparison of Bimonthly Sewer Bill for Typical Residential Customer ......................................80 Figure 10: Bimonthly Sewer Bill Survey ......................................................................................................81 Figure 11: Bimonthly Combined Utility Bill.................................................................................................86 184
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APPENDIX A: WATER TABLES/APPENDIX B: SEWER TABLES
Appendix 1: Sewer Variable Unit Rate Derivation .....................................................................................88 Appendix 2: Volume Rate by Customer Class............................................................................................91 185
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SECTION 1: INTRODUCTION

1.1 Background
The City of Brisbane (City) is situated in Northern San Mateo County on the west side of San Francisco Bay. Brisbane borders the cities of San Francisco, Daly City, and South San Francisco. The City provides water and wastewater (sewer) service to about 2,000 customers, serving a total population of about 4,800 people. Both water and sewer rates are billed bimonthly on the same bill. The City’s last rate study for water and sewer utility services was prepared in 2001.

In 2021, the City engaged Lechowicz & Tseng Municipal Consultants to complete a comprehensive water and wastewater (sewer) rate study to recommend utility rates to ensure the financial health and stability of the City’s water and sewer funds. This study focuses only on the water and sewer rates used to pay for operations, including salaries, wholesale water purchases, treatment charges, supplies and services, and other operating expenses. The operational water and sewer rates do not pay for capital projects, which are funded separately with the Capital Project Charge. Additionally, customers also pay a separate Drought Contingency Surcharge that is set aside in a specific reserve fund to avoid raising rates during a drought. This study recommends water and sewer rates for the five-year period beginning in 2023/24 through 2027/28.

The City’s Utility Fund (Fund 540) includes four funds - 1) City Water Utilities (Fund 6110), 2) City Water Maintenance (Fund 6115), 3) City Sewer Utilities (Fund 6130), and 4) the Guadalupe Valley Municipal Improvement District (GVMID) Utility (Fund 6120). The GVMID provides water, sewer, and stormwater services to business and residents located within its district boundaries. The City of Brisbane provides both the management and staff for GVMID, and the water and sewer systems are maintained by the City’s Public Works Department as part of the City’s overall water and sewer systems.

In order to determine the revenue requirements and rate increases needed for water and sewer separately, the City Water Utilities (Fund 6110), City Water Maintenance (Fund 6115), and GVMID Water funds have been combined into a single fund called the “Water Utility.” Similarly, the City Sewer Utilities (Fund 6130) and GVMID Sewer have been combined into a single fund called the “Sewer Utility.” GVMID storm water revenues and expenses are not included in this study.

1.2 Requirements of Proposition 218
The implementation of utility rates in California is governed by the substantive and procedural requirements of Proposition 218 the “Right to Vote on Taxes Act” which is codified as Articles XIIIC and XIIID of the California Constitution. The City must follow the procedural requirements of Proposition 218 for all utility rate increases. These requirements include:

1. Noticing Requirement – The City must mail a notice of the proposed rate increases to all affected property owners or ratepayers. The notice must specify the amount of the fee, the 186
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basis upon which it was calculated, the reason for the fee, and the date/time/location of a public rate hearing at which the proposed rates will be considered/adopted.

2. Public Hearing – The City must hold a public hearing prior to adopting the proposed rate increases. The public hearing must be held not less than 45 days after the required notices are mailed.

3. Rate Increases Subject to Majority Protest – At the public hearing, the proposed rate increases are subject to majority protest. If more than 50% of affected property owners or ratepayers submit written protests against the proposed rate increases, the increases cannot be adopted.

Proposition 218 also established substantive requirements that apply to water and sewer rates and charges, including:

1. Cost of Service – Revenues derived from the fee or charge cannot exceed the funds required to provide the service. In essence, fees cannot exceed the “cost of service”.

2. Intended Purpose – Revenues derived from the fee or charge can only be used for the purpose for which the fee was imposed.

3. Proportional Cost Recovery – The amount of the fee or charge levied on any customer shall not exceed the proportional cost of service attributable to that customer.

4. Availability of Service – No fee or charge may be imposed for a service unless that service is used by, or immediately available to, the owner of the property.

5. General Government Services – No fee or charge may be imposed for general governmental services where the service is available to the public at large.

Charges for water and sewer collection are exempt from additional voting requirements of Proposition 218, provided the charges do not exceed the cost of providing service and are adopted pursuant to the procedural requirements of Proposition 218.

1.3 Rate Study Process
This section details the development of the City’s water and sewer rates via the Proposition 218 process as shown in the following figure.
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Figure 1: Comprehensive Cost of Service Study Process
The following is a brief description of the rate study process:
 Revenue Requirements - Revenue requirements are analyzed via financial plans developed from the Water and Sewer Fund budgets. Based on the best information currently available, the financial plans incorporate projected operation and maintenance costs, debt service, and growth to estimate annual revenue requirements. The plans serve as a roadmap for funding the City’s future operating expenses while maintaining long-term fiscal stability.  Cost of Service Allocation - The cost of service process builds on the financial plan analysis and assigns water and sewer system costs to functional cost components: metering and customer service, base, and extra for water, and customer service, capital, and treatment/disposal for sewer.
 Rate Design - Rate design involves developing a rate structure that proportionately recovers costs from customers. Final rate recommendations are designed to (a) fund the utilities’ shortand long-term costs of providing service; (b) proportionately allocate costs to all customers and customer classes; and (c) comply with the substantive requirements of Proposition 218. 188
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The rates developed in this report were based on the best information available at the time of the study.

This information was taken from City budgets, audits, billing information, water consumption data, and input from staff. The cost allocations proposed herein are based on American Water Works Association methodologies and industry standard practice. The proposed rates are based on the reasonable cost of providing service and are proportional to the benefits received by each customer. 189
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SECTION 2: WATER RATE STUDY
The City of Brisbane provides water service to approximately 1,300 City water accounts and 700 GVMID water accounts. On average, the City consumes over 270,000 ccf (hundred cubic feet) of water each year. The last water rate study was conducted in 2001, and water rates for operations have not increased since 2012. Based on City billing records, the current average monthly residential water use is 5 ccf per month, or a total of 10 ccf per bimonthly billing period. The average water bill is currently $120.17 per bimonthly billing period, including Drought Contingency and Capital Project charges.

2.1 Current Water Rates
Schedules of current bimonthly water rates for residential, commercial, and irrigation customers are provided in Table 1, Table 2, and Table 3. The City’s current water rate structure includes two components: (a) a Fixed Charge and (b) a Consumption Rate. Moreover, customers are levied two additional charges on their bimonthly utility bill - a Capital Project Charge and a Drought Contingency Charge.

2.1.1 Fixed Charge
All customers are charged a base service charge based on the size of their water meter. The Fixed Charge is levied regardless of water consumption and recognizes that even when a customer does not use any water, the City incurs fixed costs associated with maintaining the ability or readiness to serve each connection. The current Fixed Charges also vary based on customer class. For example, a residential customer with a 5/8”or 3/4” meter currently pays $22.67 while a commercial or irrigation customer with the same meter size pays $35.07.

The Fixed Charges are designed to recover the City’s fixed expenses and currently generate about 15% of total water rate revenues. Fixed costs include staffing, customer service, debt service, system maintenance, and repairs.

2.1.2 Consumption Rate
In addition to the Fixed Charges, all customers pay a Consumption Rate per ccf of water consumption per billing period. One ccf is equal to 748 gallons of water. The charges for water usage are based on a tiered rate system where the price per unit of water is higher as more water is used. The highest rates start at 16 ccf of water usage for each customer class. Most customers pay based on a three-tiered rate structure. However, residential customers with a 5/8” meter receive one unit of water for free and have a five-tiered rate structure and residential customers with a 3/4” meter have four tiers.

The Consumption Rate is intended to recover costs that vary based on the amount of water consumed and currently generate roughly 85% of total water rate revenues. Variable expenses include water purchases, utilities, and chemicals.
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2.1.3 Capital Project Charge
In April of 2014, the City Council approved the first Capital Project Charge to pay for infrastructure projects for the water and sewer systems. The projects are based on the City’s Capital Improvement Plan which outlines the need for approximately $5 million in projects every five years. The policy adopted in 2014 included placing a new Capital Project Charge on the water and sewer bill four times over a twenty-year period. The second charge should have been implemented in 2020 but was delayed due to the impacts of COVID. To prevent further delays in completing the projects, the City Council adopted the second of four increases to the Capital Project Charge in October 2022.

The Capital Project Charge is levied according to a tiered rate system based on springtime usage (midFebruary through mid-June) to ensure that lower water users pay less than higher users. Total Capital Project Charge revenue is evenly split between the water and sewer funds. The Capital Project Charge will not be reviewed or analyzed in this study.

2.1.4 Drought Contingency Charges
Approved by the City in 2018, the Drought Contingency Charge was enacted to create a separate drought reserve fund with the objective of avoiding having to raise rates in times of severe water shortages. For residential and commercial accounts, the charge is $2.32 per bimonthly billing period for customers whose annual average consumption is below the median use of 12 ccf. For customers whose use is above the median, the bimonthly charge is $6.99. For irrigation customers, the charge is $102.14 per billing period. The Drought Contingency Charge will not be reviewed or analyzed in this study. 191
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Table 1: Current Bi-Monthly Residential Water Rates
City of Brisbane
Water Utility Rate Study 2022

RESIDENTIAL WATER RATES

FIXED CHARGES
Meter Size Bimonthly Charge
5/8" $22.67
3/4" $22.67
1" $30.60
1-1/2" $61.14
2" $97.85
3" $195.73
4" $305.78

CONSUMPTION CHARGES
Meter Size Tier Bimonthly Charge
5/8" 0 - 1 ccf $0.00
1 - 2 ccf $2.17
3 ccf $5.63
4 - 8 ccf $7.00
9 - 16 ccf $8.69
Over 16 ccf $11.05
3/4" 0 - 3 ccf $5.19
4 - 8 ccf $7.00
9 - 16 ccf $8.69
Over 16 ccf $11.05
All Other Meter Sizes 0 - 8 ccf $7.00
9 - 16 ccf $8.69
Over 16 ccf $11.05
Effective 10/15/2012
ccf = cubic feet. 1 ccf = 748 gallons
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Table 2: Current Bi-Monthly Commercial Water Rates
City of Brisbane
Water Utility Rate Study 2022

COMMERCIAL WATER RATES

FIXED CHARGES
Meter Size Bimonthly Charge
5/8" $35.07
3/4" $41.46
1" $58.41
1-1/2" $116.80
2" $186.90
3" $373.75
4" $587.00
6" $1,168.00

CONSUMPTION CHARGES
Meter Size Tier Bimonthly Charge
5/8" & 3/4" 0 - 8 ccf $5.20
9 - 16 ccf $8.69
Over 16 ccf $11.05
All Other Meter Sizes 0 - 8 ccf $7.00
9 - 16 ccf $8.69
Over 16 ccf $11.05
Effective 10/15/2012
ccf = cubic feet. 1 ccf = 748 gallons
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Table 3: Current Bi-Monthly Irrigation Water Rates
City of Brisbane
Water Utility Rate Study 2022

IRRIGATION WATER RATES

FIXED CHARGES
Meter Size Bimonthly Charge
5/8" $35.07
3/4" $41.46
1" $44.64
1-1/2" $66.95
2" $92.47
3" $178.56
4" $521.55

CONSUMPTION CHARGES
Meter Size Tier Bimonthly Charge
All except for
4" 0 - 8 ccf $5.18
9 - 16 ccf $11.35
Over 16 ccf $13.19
4" Meter 0 - 8 ccf $8.49
9 - 16 ccf $11.35
Over 16 ccf $13.19
Effective 10/15/2012
ccf = cubic feet. 1 ccf = 748 gallons
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2.2 Water System Overview

2.2.1 Water System
The City obtains all of its water from the San Francisco Public Utilities Commission (SFPUC) through five turnouts of the Crystal Springs Pipeline. Approximately 80% of the SFPUC’s water supply is from the Hetch Hetchy Reservoir in Yosemite National Park, with the Alameda and Peninsula Watersheds supplying the remainder.

The City operates two separate water districts—the City of Brisbane Water District and the Guadalupe Valley Municipal Improvement District (GVMID). GVMID serves Crocker Industrial Park and the Northeast Ridge Development, while the City of Brisbane Water District serves the remainder of the City including Central Brisbane, Sierra Point, and the Baylands. The City Water Enterprise is interconnected with the GVMID Combined Enterprise, allowing for maximum circulation and flow within the system.

The combined water distribution system includes 5 water storage tanks, 4 booster pump stations serving 7 pressure zones, more than 25 miles of underground pipeline, and over 700 valves.

2.2.2 Water Customers
The City of Brisbane provides water service to approximately 1,284 City water accounts and 754 GVMID water accounts as shown on Table 4. The majority of customers are single family residential customers with 5/8” meters.
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Table 4: Number of Water Accounts by Meter Size & Customer Class for 2020 City of Brisbane
Water Utility Rate Study 2022

2.2.3 Water Consumption
Table 5 summarizes annual water consumption by customer class for the past 3 calendar years. In 2020, total consumption increased approximately 8.0%. In total, residential customers (single family and multifamily) account for roughly 36% of overall consumption. Commercial accounts represent approximately 35% of total use. Irrigation use accounts for 26% of total consumption, followed by hydrant use at nearly 3%.
5/8" 3/4" 1" 1-1/2" 2" 3" 4" TOTAL % of Total
CITY
Single Family Residential 832 89 90 19 0 0 0 1,030 50.5% Multi-Family Residential 79 7 12 7 6 1 1 113 5.5%
Commercial/Government 55 9 6 4 12 9 3 98 4.8%
Landscape 1 3 6 2 16 4 0 32 1.6%
Hydrant 0 0 0 0 0 11 0 11 0.5%
Total City 967 108 114 32 34 25 4 1,284 63.0%
GVMID
Single Family Residential 351 26 50 77 0 0 0 504 24.7%
Multi-Family Residential 0 0 0 0 0 0 0 0 0.0%
Commercial/Government 90 19 21 31 21 6 0 188 9.2%
Landscape 1 3 7 24 25 0 0 60 2.9%
Hydrant 0 0 0 0 0 2 0 2 0.1%
Total GVMID 442 48 78 132 46 8 0 754 37.0%
Customer Class
Single Family Residential 1,183 115 140 96 0 0 0 1,534 75.3% Multi-Family Residential 79 7 12 7 6 1 1 113 5.5%
Commercial/Government 145 28 27 35 33 15 3 286 14.0%
Landscape 2 6 13 26 41 4 0 92 4.5%
Hydrant 0 0 0 0 0 13 0 13 0.6%
TOTAL WATER ACCOUNTS 1,409 156 192 164 80 33 4 2,038 100.0% Source: Number of Accts & Total Water Use by Class 2018-2020 196
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Table 5: Annual Water Consumption
City of Brisbane
Water Utility Rate Study 2022

2.2.4 SFPUC Wholesale Water
This chart shows the City’s historical SFPUC water purchases over the past 35 years by calendar year.

The five-year average from 2016 through 2020 is 310,819 ccf.

Calendar Year 2018 2019 2020 3-Year Average % of Total
CITY
Single Family Residential 56,169 55,666 61,134 57,656 20.4% Multi-Family Residential 15,312 16,603 17,437 16,451 5.8% Commercial/Government 33,983 32,443 28,959 31,795 11.2% Landscape 37,177 31,786 39,283 36,082 12.7%
Hydrant 0 0 22,998 7,666 2.7%
Total City 142,641 136,498 169,811 149,650 52.9%
Percent Change -4% 24%
GVMID
Single Family Residential 26,197 26,553 30,662 27,804 9.8% Multi-Family Residential 0 0 0 0 0.0%
Commercial/Government 79,437 69,714 51,947 67,033 23.7% Landscape 38,456 37,544 39,409 38,470 13.6%
Hydrant 0 0 184 61 0.0%
Total GVMID 144,090 133,811 122,202 133,368 47.1%
Percent Change -7.1% -8.7%
TOTAL
Single Family Residential 82,366 82,219 91,796 85,460 30.2% Multi-Family Residential 15,312 16,603 17,437 16,451 5.8% Commercial/Government 113,420 102,157 80,906 98,828 34.9% Landscape 75,633 69,330 78,692 74,552 26.3%
Hydrant 0 0 23,182 7,727 2.7%
TOTAL WATER USE 286,731 270,309 292,013 283,018 100.0%
Percent Change -5.7% 8.0%
Source: Number of Accts & Total Water Use by Class 2018-2020 197
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Figure 2: Historical SFPUC Water Purchases
City of Brisbane
Water Utility Rate Study 2022

2.3 Water Financial Plan

2.3.1 Water Reserves
For accounting, the City’s Utility Fund (Fund 540) combines water and sewer finances into one fund. As of July 1, 2021, the total fund balance for the Utility Fund (Fund 540) in “Cash and investments” was approximately $7.7 million. However, for the purposes of this study, the total reserves have been allocated between the water and sewer funds as shown on Table 6. Because the Sewer Utility is currently operating in a deficit, additional reserves have been assigned to the sewer utility to mitigate rate impacts. Cash reserves are not split evenly between the water and sewer funds. The allotted beginning fund balance for the water utility is $2.8 million. 198
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Table 6: Utility Fund (Fund 540) Reserves
City of Brisbane
Water Utility Rate Study 2022
Adequate fund reserves protect the City when faced with unforeseen financial challenges such as emergency expenses or revenue deficits. Fund reserves allow the City to maintain its financial health and positive credit ratings, especially during emergencies. Moreover, funding can be drawn from reserves to supplement rate revenues lost during drought conditions or other unexpected situations. It is acceptable if reserves dip below the target on a temporary basis, provided the City takes action to attain the target over the longer run.

The City currently has two water reserve fund targets:
o Operating Reserve: The fund balance target is equal to 35% of annual operating expenses per City policy. This is in line with industry standards that recommend an operating reserve target of at least 25% of annual expenses to account for the time (at least 4 months) that it would take an agency to approve new rate increases to comply with Proposition 218. o Drought Reserve: The fund balance target is $700,000 which the City would draw on only if needed during times of severe drought. This reserve is funded by the Drought Contingency Surcharges.

2.3.2 Water Revenues
Table 7 shows a history of revenues for Utility Fund (Fund 540). The “Water Sales” revenues are evenly split between City Water and GVMID Water. “Sewer Service Charges” are evenly split between City Sewer and GVMID Sewer. The “GVMID Only” tax revenues are divided evenly between the three GVMID utilities (GVMID water, sewer, and storm drain). The GVMID storm drain revenues are not included in this study. All Other Revenues including “Investment Earnings,” “Low Income Rate Assistance,” and “Capital Charge” are divided evenly amongst the four utilities.

Fund
Beginning Balance as
of June 30, 2021
Total Utility Fund (Fund 540) Reserves (1) $7,656,890
Water Utility Reserves (2) $2,828,445
Sewer Utility Reserves (2) $4,828,445
1) Cash and investments (Unaudited Financials).

Source: Proprietry Funds, Statement of Net Position, June 30, 2020 2) Includes GVMID
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Table 7: Utility Fund (Fund 540) Budgeted Revenues
City of Brisbane
Water Utility Rate Study 2022
Actual Budgeted
REVENUE CATEGORY 2018/19 2019/20 2020/21 2021/22
WATER ONLY (1)
40801 Water Sales $3,050,110 $2,950,000 $2,750,000 $3,000,000 40804 Meter Connection Fees $68,663 $20,000 $20,000 $20,000 40805 Fire Service Charges $118,952 $115,000 $115,000 $115,000 40806 Altamar Meter Reading Fee $7,656 $7,500 $7,500 $7,500 Drought Reserve Charge $95,481 $120,000 $100,000 $100,000 Total Water Only $3,340,862 $3,212,500 $2,992,500 $3,242,500 SEWER ONLY (2)
40820 Sewer Service Charges $2,188,866 $2,200,000 $2,000,000 $2,000,000 40821 Sewer Connection Fees $123,706 $3,000 $3,000 $3,000 Total Sewer Only $2,312,572 $2,203,000 $2,003,000 $2,003,000 GVMID ONLY (3)
40101 Current Secured Tax $27,358 $29,000 $29,000 $29,000 40102 Current Unsecured Tax $1,513 $1,500 $1,500 $1,500 40103 Prior Year Tax ($1) $0 $0 $0
40105 Supplemental Property Taxes $1,048 $0 $0 $0
40108 Property Tax from RDA $2,866 $100 $100 $100
40150 ERAF $134 $100 $100 $100
Total GVMID $32,918 $30,700 $30,700 $30,700
ALL OTHER REVENUES (4)
40501 Investment Earnings $133,599 $50,000 $50,000 $50,000 40503 Unrealized-Gain/Loss $96,152 $0 $0 $0
40609 H.O.P.T R $121 $100 $100 $100
40770 Processing Fee $5,472 $0 $0 $0
40802 Account Open/Reconnections $2,987 $3,000 $3,000 $3,000 40803 Late Payment Charges $8,117 $10,000 $10,000 $10,000 40810 Less: Low Income Rate Assistance ($42,336) ($50,000) ($75,000) ($75,000) 40825 Capital Charge $378,443 $365,000 $365,000 $365,000 40941 Returned Check Fees $75 $0 $0 $0
40959 Reimbursed Expenses - Current Year $3,541 $0 $0 $0 40961 Transfers from Other Funds $43,000 $50,000 $75,000 $75,000 Total All Other Revenues $629,172 $428,100 $428,100 $428,100 TOTAL REVENUES $6,315,524 $5,874,300 $5,454,300 $5,704,300 Source: Budget 2020_2022
1 - Divided by 2 between City Water & GVMID Water
2 - Divided by 2 between City Sewer & GVMID Sewer
3 - Divided by 3 between GVMID Water, Sewer, & Stormwater 4 - Divided by 4 between City Water, City Sewer, GVMID Water, & GVMID Sewer 200
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Table 8 summarizes total revenues for the Water Utility. For 2021/22, Water Sales are estimated at $3 million with total water revenues projected at $3.4 million.

Table 8: Water Utility Revenues
City of Brisbane
Water Utility Rate Study 2022

2.3.3 Water Expenses
Table 9 summarizes the operating expenses for Water Utilities (Fund 1110). On average, operating expenses have increased by 7% over the past 4 years.

Actual
2018/19 2019/20 2020/21 2021/22

WATER REVENUES
Water Sales $3,050,110 $2,950,000 $2,750,000 $3,000,000 Other Water Only Revenues (1) $195,271 $142,500 $142,500 $142,500 Drought Reserve Charge $95,481 $120,000 $100,000 $100,000 All Other Revenues (2) $314,586 $214,050 $214,050 $214,050 Total $3,655,448 $3,426,550 $3,206,550 $3,456,550
Percent Change -6.3% -6.4% 7.8%
1 - Includes Meter Connection Fees, Fire Service Charges, and Altamar Meter Reading Fees 2 - All Other Revenues divided by 2 (Table 7)
Budget
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Table 9: Water Utilities (Fund 1110) Operating Expenses City of Brisbane
Water Utility Rate Study 2022
Table 10 summarizes the operating expenses for GVMID Utility (Fund 6120). On average, total GVMID operating expenses have increased by 7% over the past 4 years. Each expense category is divided by 3 to determine how much should be allocated to the Water Utility, Sewer Utility, and GVMID storm water.

GVMID storm water expenses are not included in this study.

Avg Annual
Expense (1) 2018/19 2019/20 2020/21 2021/22 Increase
Salaries $176,372 $270,136 $369,070 $383,832
Percent Change 12.9% 53.2% 36.6% 4.0% 21.5%
Payroll Taxes $2,642 $3,884 $5,308 $5,522
Percent Change 13.1% 47.0% 36.7% 4.0% 20.2%
Benefits $112,905 $180,750 $186,854 $217,088
Percent Change 28.0% 60.1% 3.4% 16.2% 17.8%
Insurance $26,657 $28,196 $45,594 $45,764
Percent Change 36.3% 5.8% 61.7% 0.4% 14.5%
Supplies and Services $1,092,293 $1,111,297 $1,247,416 $1,236,584 Percent Change 4.8% 1.7% 12.2% -0.9% 3.2%
Admin Charges and Credits $300,162 $323,897 $322,357 $346,290 Percent Change 7.0% 7.9% -0.5% 7.4% 3.6%
TOTAL FUND 1110 OPERATING EXPENSES $1,711,033 $1,918,160 $2,176,599 $2,235,080 Percent Change 7.7% 12.1% 13.5% 2.7% 6.9%
Source: Budget 2020_2022
1 - Does not include depreciation
Actual Budgeted
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Table 10: GVMID Combined Utility (Fund 6120) Operating Expenses City of Brisbane
Water Utility Rate Study 2022
Table 11 combines the Water Utilities (Fund 1110) Operating Expenses from Table 9 with the GVMID Combined Utility (Fund 6120) Operating Expenses from Table 10 to calculate the total Water Utility expenses. As described above, only one third of the GVMID Combined Utility expenses are categorized as Water Utility expenses.

Avg Annual 2021/22 Budget
Expense (1) 2018/19 2019/20 2020/21 2021/22 Increase per Utility (2) Salaries $180,809 $179,236 $333,150 $345,879 $115,293
Percent Change -5.3% -0.9% 85.9% 3.8% 17.6%
Payroll Taxes $3,987 $2,306 $4,584 $4,769 $1,590
Percent Change 39.2% -42.2% 98.8% 4.0% 4.6%
Benefits $98,172 $95,450 $153,452 $181,974 $60,658
Percent Change 0.8% -2.8% 60.8% 18.6% 16.7%
Insurance $15,567 $16,406 $39,376 $39,521 $13,174
Percent Change -7.8% 5.4% 140.0% 0.4% 26.2%
Supplies and Services $1,105,804 $1,166,543 $1,165,054 $1,291,240 $430,413 Percent Change 41.8% 5.5% -0.1% 10.8% 4.0%
Admin Charges and Credits $303,900 $335,321 $341,554 $380,262 $126,754 Percent Change -2.0% 10.3% 1.9% 11.3% 5.8%
TOTAL GVMID UTILITY OPERATING EXPENSES $1,708,239 $1,795,263 $2,037,171 $2,243,645 $747,882 Percent Change 22.2% 5.1% 13.5% 10.1% 7.1%
Source: Budget 2020_2022
1 - Does not include expenses to "Operate a Storm Drain System" or Depreciation 2 - Budget divided by the 3 GVMID utilties (water, sewer, & storm water) Actual Budgeted
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Table 11: Water Utility Combined Operating Expenses
City of Brisbane
Water Utility Rate Study 2022
Table 12 includes a projection of future water operating expenses over the next five years through 2027/28. Escalation factors were determined using City input. Supplies and Services, which includes water purchases, is projected to increase by 10.0% each year. Salaries and Benefits are projected to increase by 4.0% each year. Insurance is increased by 5.0% per year, and Admin Charges and Credits are escalated by 3.0% each year. Overall, water operating expenses are projected to increase by approximately 7 to 8% each year.

Table 12: Water Utility Projection of Future Operating Expenses City of Brisbane
Water Utility Rate Study 2022
Expense (1) 2018/19 2019/20 2020/21 2021/22
Salaries $236,642 $329,881 $480,120 $499,125
Payroll Taxes $3,971 $4,653 $6,836 $7,112
Benefits $145,629 $212,567 $238,005 $277,746
Insurance $31,846 $33,664 $58,719 $58,938
Supplies and Services $1,460,895 $1,500,145 $1,635,767 $1,666,998 Admin Charges and Credits $401,462 $435,670 $436,209 $473,044 TOTAL WATER OPERATING EXPENSES $2,280,446 $2,516,581 $2,855,656 $2,982,962 Percent Change 11.0% 10.4% 13.5% 4.5%
Source: Budget 2020_2022
1 - Does not include Depreciation
Actual Budget
Escalation Projected
Expense (1) 2021/22 Factor 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Salaries $499,125 4.0% $519,000 $540,000 $562,000 $584,000 $607,000 $631,000 Payroll Taxes $7,112 4.0% $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Benefits $277,746 4.0% $289,000 $301,000 $313,000 $326,000 $339,000 $353,000 Insurance (2) $58,938 5.0% $65,000 $68,000 $71,000 $75,000 $79,000 $83,000 Supplies and Services $1,666,998 10.0% $1,932,000 $2,125,000 $2,338,000 $2,572,000 $2,829,000 $3,112,000 Admin Charges and Credits $473,044 3.0% $487,000 $502,000 $517,000 $533,000 $549,000 $565,000 TOTAL WATER OPERATING EXPENSES $2,982,962 $3,299,000 $3,543,000 $3,808,000 $4,097,000 $4,410,000 $4,751,000 Percent Change 4.5% 10.6% 7.4% 7.5% 7.6% 7.6% 7.7%
Source: Budget 2020_2022
1 - Does not include Depreciation
Budget Years 1 -5: Proposition 218
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2.3.4 Water Purchases
As shown on Table 13, wholesale water purchases are the largest expense for the Water Utility, accounting for nearly half of total operating expenses in 2022/23.

Table 13: SFPUC Water Purchase Costs
City of Brisbane
Water Utility Rate Study 2022
In 2022/23, the SFPUC implemented a 16% increase for its water rates to $4.75 per ccf. The SFPUC is nearing its completion of the $4.8 billion Water System Improvement Project (WSIP) to upgrade the Hetch Hetchy Water System; however, the SFPUC is projecting significant increases to its operating costs over the next five years and rates are projected to continue to increase. Figure 3 shows historical SFPUC wholesale water rates.

Projected
2018/19 2019/20 2020/21 2021/22 2022/23
Estimated SFPUC Rate ($ per ccf) (1) $4.49 $4.49 $4.50 $4.50 $5.15 % Increase 0.0% 0.2% 0.0% 14.5%
Estimated Total Water Purchased (ccf) 352,347 306,221 302,003 302,003 311,063 % Increase -13.1% -1.4% 0.0% 3.0%
Total Water Purchases $1,582,038 $1,374,932 $1,359,014 $1,359,014 $1,602,566 % Increase -13.1% -1.2% 0.0% 17.9%
Total Water Operating Expenses $2,280,446 $2,516,581 $2,855,656 $2,982,962 $3,299,000 % Increase 10.4% 13.5% 4.5% 10.6%
% of Water Purchases / Total Operating Expenses 69.4% 54.6% 47.6% 45.6% 48.6% 1 - Includes both the water rate and BAWSCA Surcharge
Budget
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Figure 3: Historical SFPUC Wholesale Water Rates
City of Brisbane
Water Utility Rate Study 2022
The chart above shows SFPUC’s historical wholesale water rates since 2002/03. Since 2013/14, SFPUC wholesale rates have increased from $2.45 per ccf to $4.75 per ccf, representing a 94% increase. To be conservative, this study estimates that wholesale rates will increase by 10.0% each year during the rate study period. The chart shows the actual wholesale water rate as well as the separate BAWSCA bond surcharge.

In 2013, BAWSCA issued Revenue Bonds (Series 2013A and 2013B) to prepay the remaining capital cost recovery payments that the BAWSCA member agencies owed the SFPUC as of June 30, 2013. Beginning in 2013/14, BAWSCA began collecting a fixed bond surcharge from each member agency as a separate item on their monthly water bills from the SFPUC. The payments are used to make debt service payments on the revenue bonds, reimburse bond administration expenses, and, as necessary, replenish a stabilization fund set up to limit the volatility in annual changes in the payments.

The allocation of the bond surcharge among the BAWSCA member agencies in a given year is based on the prior year’s actual water sales to each agency. The following year, a financial reconciliation is 206
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performed where each agency’s final payments are adjusted based on actual water sales during the prior year. The current BAWSCA bond surcharge is $0.40 per ccf.

2.3.5 Water Net Revenues
The water utility has been doing well for the past few years, fully covering costs while building reserves.

For 2021/22, total net revenues are projected at approximately $155,245, as noted below in Table 14.

Table 14: Water Net Revenues
City of Brisbane
Water Utility Rate Study 2022
Actual Budget
2018/19 2019/20 2020/21 2021/22

WATER REVENUES
Water Sales Revenues $3,050,110 $2,950,000 $2,750,000 $3,000,000 Other Revenues $605,338 $476,550 $456,550 $456,550
Total $3,655,448 $3,426,550 $3,206,550 $3,456,550

WATER EXPENSES
Operating $2,280,446 $2,516,581 $2,855,656 $2,982,962
Debt Service $312,156 $313,906 $315,156 $318,344
Subtotal $2,592,602 $2,830,487 $3,170,812 $3,301,305
TOTAL NET REVENUES $1,062,846 $596,063 $35,738 $155,245 207
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2.3.6 Debt Service
The Water Utility currently has one outstanding debt obligation that is shared with the Sewer Utility – the 2015 Utility Revenue Bonds for $8.3 million. Total debt service for 2022/23 is $632,063, see Table 15. Debt service payments are split evenly between the Water Utility and Sewer Utility.

Table 15: 2015 Utility Revenue Bonds - Debt Service Schedule City of Brisbane
Water Utility Rate Study 2022
Debt Service Coverage
A chief covenant for the City to secure State loans/grants or revenue bonds/Certificates of Participation (COPs) is to maintain a specific debt service coverage ratio. A debt service coverage ratio is a financial measure of an agency’s ability to repay outstanding debt. For the 2015 Utility Revenue Bonds, the debt service coverage ratio means that annual water net revenues (gross revenues less operating and maintenance expenses) must be at least 1.25 times the combined annual debt service payments on all Fiscal Year
Ending June 30 Principal Interest Total Debt Service (1) 2016 $170,000 $247,103 $417,103
2017 $305,000 $327,763 $632,763
2018 $310,000 $318,513 $628,513
2019 $320,000 $304,313 $624,313
2020 $340,000 $287,813 $627,813
2021 $360,000 $270,313 $630,313
2022 $385,000 $251,688 $636,688
2023 $400,000 $232,063 $632,063
2024 $415,000 $211,688 $626,688
2025 $440,000 $190,313 $630,313
2026 $455,000 $167,938 $622,938
2027 $480,000 $149,363 $629,363
2028 $490,000 $134,813 $624,813
2029 $510,000 $119,175 $629,175
2030 $525,000 $102,356 $627,356
2031 $540,000 $84,713 $624,713
2032 $570,000 $65,625 $635,625
2033 $305,000 $50,313 $355,313
2034 $320,000 $39,175 $359,175
2035 $330,000 $23,063 $353,063
2036 $340,000 $6,375 $346,375
TOTALS $8,310,000 $3,584,471 $11,894,471
(1) Debt service is allocated 50% to the Water Utility and 50% to the Sewer Utility. 208
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parity obligations. Failure to meet the debt service coverage ratio on an annual basis is considered to be technical default, thereby making the revenue bonds/COPs callable or payable upon demand. Thus, rates and fees must be set to meet this legal requirement. Moreover, failing to meet debt service coverage may hinder the City’s ability to qualify for future bond funding.

2.3.7 Water Cash Flow Objectives
With input from City Staff, L&T developed three water cash flow scenarios based on various rate increase options. The following three goals are indicators of the overall fiscal health of the Water Utility, and the proposed rate adjustments for the rate scenarios have been designed to meet these objectives.

1. Meet debt service coverage (1.25x)
a. The debt service coverage ratio for the 2015 Utility Revenue Bonds is 1.25x. b. Ratio is calculated as Net Operating Revenue/Total Debt Service.

2. Meet Water Utility reserve targets
a. Operating Reserve Target = 25.0% of annual operating costs b. Drought Reserve Target = $700,000

3. Maintain positive net operating revenues
a. To ensure that the Water Utility is covering its cost of service b. To avoid an operating deficit and dipping into reserves The three cash flow scenarios considered are:
 Water Scenario #1: No Rate Increases
o This scenario demonstrates what would happen if the City did not raise the water rates.

Without rate increases, the projections show that the Water Utility would not meet debt service coverage beginning in 2022/23. Additionally, the Water Utility would be operating in a deficit and would run down its reserves by the end of 2026/27.  Water Scenario #2: 8.0% Annual Rate Increases
o This scenario shows the impact to the Water Utility with 8.0% annual rate increases to cover operating cost inflation. With Scenario #2, the projections show that the Water Utility would not meet debt service coverage beginning in 2022/23. Additionally, the Water Utility would be operating in a deficit for the next 10 years.  Water Scenario #3: 9.0% Annual Rate Increases
o This scenario shows the impact to the Water Utility with annual 9.0% rate increases.

With Scenario #3, the Water Utility would meet debt service coverage by 2024/25. The Water Utility would meet its reserve targets each year and would be maintaining positive net operating revenue by 2027/28.

2.3.8 Water Scenario #1: Water Cash Flow Projection with No Rate Increases Table 16 forecasts the financial health of the water utility over the next 10 years if the City does not implement any rate increases. Using 2021/22 as the base year, the cash flow for Scenario #1 shows that the Water Utility will miss debt service coverage (line 54) and will have negative net operating 209
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revenues beginning in 2022/23 (line 43). Additionally, the Water Utility will run down its reserves by the end of 2026/27 (line 45).

The cash flow uses the 2021/22 budget as the base year and includes the following assumptions:

Revenues
- Total Water Sales revenues are estimated at $3.0 million based on the 2021/22 budget. - Rate increases will go into effect on July 1 of each year, beginning in 2023 through 2027. - Meter Connection Fees, Fire Service Charges, and Altamar Meter Reading Fee revenues are increased by the Overall Rate Adjustment percentage.
- Drought Charge remains in effect through 2026/27.
- The Capital Charge is increased by $85,000 beginning in December 2022 and then $170,000 in 2023/24. The total estimated increase in the Capital Charge is estimated at $700,000 and is split evenly with the Sewer Utility.
- The Capital Charge will be increased again in 2027/28. - Interest is increased by 1.0% each year.
- All other revenues are increased by 3.0% each year.
- The Low Income Rate Assistance contribution from the General Fund remains at $75,000 per year and is divided evenly between water and sewer.
- Growth is estimated at 0.5% each year.
- Water consumption is based on 2020 usage and is projected to increase on average approximately 2.0% each year through 2027/28.

Expenses
- Expenses are increased based on the escalation factors from Table 12. - The only current debt obligation is the 2015 Utility Revenue Bonds. Total debt service is approximately $625,000 per year and is split evenly with the Sewer Utility. - Debt service coverage is estimated at 1.25x and is calculated by dividing Net Revenues by Total Debt Service.
- Assuming that the City will issue $5 million in debt to pay for capital projects in 2027/28, total debt service is projected at $300,000 and is split evenly with the Sewer Utility beginning in 2027/28.
- No capital project expenditures are included.
- Annual depreciation is not included.
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Table 16: Water Scenario #1: No Rate Increases - Water Cash Flow Projection City of Brisbane
Water Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 Overall Revenue Adjustment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2 Rate Increase Effective Jul 1, 2023 Jul 1, 2024 Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Jul 1, 2030 Jul 1, 2031 Jul 1, 2032 3 4 z
5 BEGINNING FUND BALANCE $2,828,445 $2,983,640 $2,643,640 $2,062,640 $1,214,640 $81,640 ($1,368,360) ($2,903,860) ($4,813,360) ($7,125,860) ($9,878,360) ($13,118,860) 6 7 REVENUES
8 Water Sales 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 9 Meter Connection Fees 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 10 Fire Service Charges 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 11 Altamar Meter Reading Fee 7,500 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 12 Drought Reserve Charge 100,000 100,000 100,000 100,000 100,000 100,000 0 0 0 0 0 0 13 Capital Charge (1) 182,500 267,500 352,500 352,500 352,500 352,500 502,500 502,500 502,500 502,500 502,500 502,500 14 Investment Earnings 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 15 Account Open/Reconnection Fees 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 16 Late Payment Charges 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 17 Transfers from Other Funds 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 18 Less: Low Income Rate Assistance (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) 19 Grant Revenue 0 0 0 0 0 0 0 0 0 0 0 0
20 Total Revenues 3,456,500 3,542,500 3,627,500 3,627,500 3,627,500 3,627,500 3,677,500 3,677,500 3,677,500 3,677,500 3,677,500 3,677,500 21 22 EXPENSES
23 Operating & Maintenance
24 Salaries 499,125 519,000 540,000 562,000 584,000 607,000 631,000 656,000 682,000 709,000 737,000 766,000 25 Payroll Taxes 7,112 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 26 Benefits 277,746 289,000 301,000 313,000 326,000 339,000 353,000 367,000 382,000 397,000 413,000 430,000 27 Insurance 58,938 65,000 68,000 71,000 75,000 79,000 83,000 87,000 91,000 96,000 101,000 106,000 28 Supplies and Services 1,666,998 1,932,000 2,125,000 2,338,000 2,572,000 2,829,000 3,112,000 3,423,000 3,765,000 4,142,000 4,556,000 5,012,000 29 Admin Charges and Credit 473,044 487,000 502,000 517,000 533,000 549,000 565,000 582,000 599,000 617,000 636,000 655,000 30 Subtotal O&M 2,982,962 3,299,000 3,543,000 3,808,000 4,097,000 4,410,000 4,751,000 5,122,000 5,526,000 5,968,000 6,450,000 6,976,000 31 32 Net Operating Revenue 473,538 243,500 84,500 (180,500) (469,500) (782,500) (1,073,500) (1,444,500) (1,848,500) (2,290,500) (2,772,500) (3,298,500) 33 34 Debt Service
35 2015 Utility Bonds (2) 318,344 316,000 313,000 315,000 311,000 315,000 312,000 315,000 314,000 312,000 318,000 159,000 36 New Bonds 0 0 0 0 0 0 150,000 150,000 150,000 150,000 150,000 150,000 37 Subtotal Debt Service 318,344 316,000 313,000 315,000 311,000 315,000 462,000 465,000 464,000 462,000 468,000 309,000 38 39 Capital Projects 0 267,500 352,500 352,500 352,500 352,500 0 0 0 0 0 0 40 41 Total Expenses 3,301,305 3,882,500 4,208,500 4,475,500 4,760,500 5,077,500 5,213,000 5,587,000 5,990,000 6,430,000 6,918,000 7,285,000 42 43 Total Net Revenues 155,195 (340,000) (581,000) (848,000) (1,133,000) (1,450,000) (1,535,500) (1,909,500) (2,312,500) (2,752,500) (3,240,500) (3,607,500) 44 45 ENDING FUND BALANCE 2,983,640 2,643,640 2,062,640 1,214,640 81,640 (1,368,360) (2,903,860) (4,813,360) (7,125,860) (9,878,360) (13,118,860) (16,726,360) 46 47
48 Reserve Funds
49 Operating Reserve Target (25% of O&M) 745,700 824,800 885,800 952,000 1,024,300 1,102,500 1,187,800 1,280,500 1,381,500 1,492,000 1,612,500 1,744,000 50 Drought Reserve ($700,000) 447,499 547,499 647,499 747,499 847,499 947,499 947,499 947,499 947,499 947,499 947,499 947,499 51 Total Water Reserves 1,193,199 1,372,299 1,533,299 1,699,499 1,871,799 2,049,999 2,135,299 2,227,999 2,328,999 2,439,499 2,559,999 2,691,499 52 Target Met? yes yes yes yes no no no no no no no no
53 54 Debt Service Coverage - 1.25x (3) 1.49 0.77 0.27 -0.57 -1.51 -2.48 -2.32 -3.11 -3.98 -4.96 -5.92 -10.67 55 Target Met? yes no no no no no no no no no no no
56 1 - Assumes Capital Charge will increase every 5 years. First increase will go into effect on Dec 1, 2022. Second increase is anticipated in 2027/28 and assumes that the City will issue $5M in new debt (combined water & sewer 2 - Total debt service for New Bonds is estimated at $300,000 and is split evenly with the Sewer Utility. 3 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 211
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2.3.9 Water Scenario #2: Water Cash Flow Projection with 8.0% Annual Rate Increases Water Scenario #2 includes the same assumptions for the Revenues and Expenses as Table 16 but includes annual rate increases of 8.0% each year to cover operating cost inflation. With Scenario #2, the projections show that the Water Utility would not meet debt service coverage beginning in 2022/23 (line 54). Additionally, the Water Utility would be operating in a deficit for the next 10 years (line 43).

Table 17: Scenario #2: 8% Annual Rate Increases - Water Cash Flow Projection City of Brisbane
Water Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 Overall Revenue Adjustment 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 2 Rate Increase Effective Jul 1, 2023 Jul 1, 2024 Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Jul 1, 2030 Jul 1, 2031 Jul 1, 2032 3 4
5 BEGINNING FUND BALANCE $2,828,445 $2,983,640 $2,643,640 $2,314,640 $1,990,640 $1,675,640 $1,360,640 $1,302,140 $1,239,640 $1,174,140 $1,099,640 $1,002,140 6 7 REVENUES
8 Water Sales 3,000,000 3,000,000 3,240,000 3,499,000 3,779,000 4,081,000 4,407,000 4,760,000 5,141,000 5,552,000 5,996,000 6,476,000 9 Meter Connection Fees 20,000 20,000 22,000 24,000 26,000 28,000 30,000 32,000 35,000 38,000 41,000 44,000 10 Fire Service Charges 115,000 115,000 124,000 134,000 145,000 157,000 170,000 184,000 199,000 215,000 232,000 251,000 11 Altamar Meter Reading Fee 7,500 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 12 Drought Reserve Charge 100,000 100,000 100,000 100,000 100,000 100,000 0 0 0 0 0 0 13 Capital Charge (1) 182,500 267,500 352,500 352,500 352,500 352,500 502,500 502,500 502,500 502,500 502,500 502,500 14 Investment Earnings 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 15 Account Open/Reconnection Fees 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 16 Late Payment Charges 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 17 Transfers from Other Funds 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 18 Less: Low Income Rate Assistance (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) 19 Grant Revenue 0 0 0 0 0 0 0 0 0 0 0 0
20 Total Revenues 3,456,500 3,542,500 3,879,500 4,151,500 4,445,500 4,762,500 5,154,500 5,524,500 5,924,500 6,355,500 6,820,500 7,323,500 21 22 EXPENSES
23 Operating & Maintenance
24 Salaries 499,125 519,000 540,000 562,000 584,000 607,000 631,000 656,000 682,000 709,000 737,000 766,000 25 Payroll Taxes 7,112 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 26 Benefits 277,746 289,000 301,000 313,000 326,000 339,000 353,000 367,000 382,000 397,000 413,000 430,000 27 Insurance 58,938 65,000 68,000 71,000 75,000 79,000 83,000 87,000 91,000 96,000 101,000 106,000 28 Supplies and Services 1,666,998 1,932,000 2,125,000 2,338,000 2,572,000 2,829,000 3,112,000 3,423,000 3,765,000 4,142,000 4,556,000 5,012,000 29 Admin Charges and Credit 473,044 487,000 502,000 517,000 533,000 549,000 565,000 582,000 599,000 617,000 636,000 655,000 30 Subtotal O&M 2,982,962 3,299,000 3,543,000 3,808,000 4,097,000 4,410,000 4,751,000 5,122,000 5,526,000 5,968,000 6,450,000 6,976,000 31 32 Net Operating Revenue 473,538 243,500 336,500 343,500 348,500 352,500 403,500 402,500 398,500 387,500 370,500 347,500 33 34 Debt Service
35 2015 Utility Bonds (2) 318,344 316,000 313,000 315,000 311,000 315,000 312,000 315,000 314,000 312,000 318,000 159,000 36 New Bonds 0 0 0 0 0 0 150,000 150,000 150,000 150,000 150,000 150,000 37 Subtotal Debt Service 318,344 316,000 313,000 315,000 311,000 315,000 462,000 465,000 464,000 462,000 468,000 309,000 38 39 Capital Projects 0 267,500 352,500 352,500 352,500 352,500 0 0 0 0 0 0 40 41 Total Expenses 3,301,305 3,882,500 4,208,500 4,475,500 4,760,500 5,077,500 5,213,000 5,587,000 5,990,000 6,430,000 6,918,000 7,285,000 42 43 Total Net Revenues 155,195 (340,000) (329,000) (324,000) (315,000) (315,000) (58,500) (62,500) (65,500) (74,500) (97,500) 38,500 44 45 ENDING FUND BALANCE 2,983,640 2,643,640 2,314,640 1,990,640 1,675,640 1,360,640 1,302,140 1,239,640 1,174,140 1,099,640 1,002,140 1,040,640 46 47
48 Reserve Funds
49 Operating Reserve Target (25% of O&M) 745,700 824,800 885,800 952,000 1,024,300 1,102,500 1,187,800 1,280,500 1,381,500 1,492,000 1,612,500 1,744,000 50 Drought Reserve ($700,000) 447,499 547,499 647,499 747,499 847,499 947,499 947,499 947,499 947,499 947,499 947,499 947,499 51 Total Water Reserves 1,193,199 1,372,299 1,533,299 1,699,499 1,871,799 2,049,999 2,135,299 2,227,999 2,328,999 2,439,499 2,559,999 2,691,499 52 Target Met? yes yes yes yes yes yes yes no no no no no 53 54 Debt Service Coverage - 1.25x (3) 1.49 0.77 1.08 1.09 1.12 1.12 0.87 0.87 0.86 0.84 0.79 1.12 55 Target Met? yes no no no no no no no no no no no
56 1 - Assumes Capital Charge will increase every 5 years. First increase will go into effect on Dec 1, 2022. Second increase is anticipated in 2027/28 and assumes that the City will issue $5M in new debt (combined water & sewer 2 - Total debt service for New Bonds is estimated at $300,000 and is split evenly with the Sewer Utility. 3 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 212
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2.3.10 Water Scenario #3: Water Cash Flow Projection with 9.0% Annual Rate Increases Water Scenario #3 includes the same assumptions for the Revenues and Expenses as Table 16 but includes rate increases of 9.0% per year to meet the three financial goals. With Scenario #3, the projections show that the Water Utility would meet debt service coverage beginning in 2023/24 (line 54). Additionally, the Water Utility will meet its reserve fund targets (line 45) and maintain positive net revenues for the next 10 years (line 43).

Table 18: Scenario #3: 9% Annual Rate Increases - Water Cash Flow Projection City of Brisbane
Water Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 Overall Revenue Adjustment 9.0% 9.0% 9.0% 9.0% 9.0% 8.0% 8.0% 8.0% 8.0% 8.0% 2 Rate Increase Effective Jul 1, 2023 Jul 1, 2024 Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Jul 1, 2030 Jul 1, 2031 Jul 1, 2032 3 4
5 BEGINNING FUND BALANCE $2,828,445 $2,983,640 $2,643,640 $2,345,640 $2,088,640 $1,882,640 $1,725,640 $1,882,140 $2,050,640 $2,234,140 $2,428,640 $2,622,140 6 7 REVENUES
8 Water Sales 3,000,000 3,000,000 3,270,000 3,564,000 3,885,000 4,235,000 4,616,000 4,985,000 5,384,000 5,815,000 6,280,000 6,782,000 9 Meter Connection Fees 20,000 20,000 22,000 24,000 26,000 28,000 31,000 33,000 36,000 39,000 42,000 45,000 10 Fire Service Charges 115,000 115,000 125,000 136,000 148,000 161,000 175,000 189,000 204,000 220,000 238,000 257,000 11 Altamar Meter Reading Fee 7,500 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 12 Drought Reserve Charge 100,000 100,000 100,000 100,000 100,000 100,000 0 0 0 0 0 0 13 Capital Charge (1) 182,500 267,500 352,500 352,500 352,500 352,500 502,500 502,500 502,500 502,500 502,500 502,500 14 Investment Earnings 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 15 Account Open/Reconnection Fees 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 16 Late Payment Charges 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 17 Transfers from Other Funds 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 18 Less: Low Income Rate Assistance (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) 19 Grant Revenue 0 0 0 0 0 0 0 0 0 0 0 0
20 Total Revenues 3,456,500 3,542,500 3,910,500 4,218,500 4,554,500 4,920,500 5,369,500 5,755,500 6,173,500 6,624,500 7,111,500 7,636,500 21 22 EXPENSES
23 Operating & Maintenance
24 Salaries 499,125 519,000 540,000 562,000 584,000 607,000 631,000 656,000 682,000 709,000 737,000 766,000 25 Payroll Taxes 7,112 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 26 Benefits 277,746 289,000 301,000 313,000 326,000 339,000 353,000 367,000 382,000 397,000 413,000 430,000 27 Insurance 58,938 65,000 68,000 71,000 75,000 79,000 83,000 87,000 91,000 96,000 101,000 106,000 28 Supplies and Services 1,666,998 1,932,000 2,125,000 2,338,000 2,572,000 2,829,000 3,112,000 3,423,000 3,765,000 4,142,000 4,556,000 5,012,000 29 Admin Charges and Credit 473,044 487,000 502,000 517,000 533,000 549,000 565,000 582,000 599,000 617,000 636,000 655,000 30 Subtotal O&M 2,982,962 3,299,000 3,543,000 3,808,000 4,097,000 4,410,000 4,751,000 5,122,000 5,526,000 5,968,000 6,450,000 6,976,000 31 32 Net Operating Revenue 473,538 243,500 367,500 410,500 457,500 510,500 618,500 633,500 647,500 656,500 661,500 660,500 33 34 Debt Service
35 2015 Utility Bonds (2) 318,344 316,000 313,000 315,000 311,000 315,000 312,000 315,000 314,000 312,000 318,000 159,000 36 New Bonds 0 0 0 0 0 0 150,000 150,000 150,000 150,000 150,000 150,000 37 Subtotal Debt Service 318,344 316,000 313,000 315,000 311,000 315,000 462,000 465,000 464,000 462,000 468,000 309,000 38 39 Capital Projects 0 267,500 352,500 352,500 352,500 352,500 0 0 0 0 0 0 40 41 Total Expenses 3,301,305 3,882,500 4,208,500 4,475,500 4,760,500 5,077,500 5,213,000 5,587,000 5,990,000 6,430,000 6,918,000 7,285,000 42 43 Total Net Revenues 155,195 (340,000) (298,000) (257,000) (206,000) (157,000) 156,500 168,500 183,500 194,500 193,500 351,500 44 45 ENDING FUND BALANCE 2,983,640 2,643,640 2,345,640 2,088,640 1,882,640 1,725,640 1,882,140 2,050,640 2,234,140 2,428,640 2,622,140 2,973,640 46 47
48 Reserve Funds
49 Operating Reserve Target (25% of O&M) 745,700 824,800 885,800 952,000 1,024,300 1,102,500 1,187,800 1,280,500 1,381,500 1,492,000 1,612,500 1,744,000 50 Drought Reserve ($700,000) 447,499 547,499 647,499 747,499 847,499 947,499 947,499 947,499 947,499 947,499 947,499 947,499 51 Total Water Reserves 1,193,199 1,372,299 1,533,299 1,699,499 1,871,799 2,049,999 2,135,299 2,227,999 2,328,999 2,439,499 2,559,999 2,691,499 52 Target Met? yes yes yes yes yes yes yes yes yes yes yes yes 53 54 Debt Service Coverage - 1.25x (3) 1.49 0.77 1.17 1.30 1.47 1.62 1.34 1.36 1.40 1.42 1.41 2.14 55 Target Met? yes no no yes yes yes yes yes yes yes yes yes 56 1 - Assumes Capital Charge will increase every 5 years. First increase will go into effect on Dec 1, 2022. Second increase is anticipated in 2027/28 and assumes that the City will issue $5M in new debt (combined water & sewer 2 - Total debt service for New Bonds is estimated at $300,000 and is split evenly with the Sewer Utility. 3 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 213
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2.3.11 Water Scenario Comparison
Table 19 includes a summary of the proposed rate adjustments and the three financial goals for all three scenarios. Based on the proposed rate adjustments, only Water Scenario #3: 9.0% Annual Rate Increases meets the three financial objectives by the end of the rate study period.

Table 19: Water Scenario Comparison
City of Brisbane
Water Utility Rate Study 2022
Figure 4 graphically shows the projected total ending reserve fund balance under each scenario. The red dotted line represents the total reserve fund target. The purple line represents Water Scenario #1: No Rate Increases. The yellow line represents Water Scenario #2: 8.0% Annual Rate Increases. The green line represents Water Scenario #3: 9.0% Annual Rate Increases. It is projected that the Water Fund will meets its reserve fund targets through 2026/27 in each scenario except for Water Scenario #1.

GOAL 1 : MEET DEBT SERVICE COVERAGE
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Debt Service Coverage Ratio Required 1.25 1.25 1.25 1.25 1.25 1.25 1.25 Scenario 1: No Rate Increases 1.49 0.77 0.27 (0.57) (1.51) (2.48) (2.32) Target Met? yes no no no no no no
Scenario 2: 8% Annual Rate Increases 1.49 0.77 1.08 1.09 1.12 1.12 0.87 Target Met? yes no no no no no no
Scenario 3: 9% Annual Rate Increases 1.49 0.77 1.17 1.30 1.47 1.62 1.34 Target Met? yes no no yes yes yes yes
GOAL 2: MEET RESERVE FUND TARGETS
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Water Fund Reserve Target (Operating & Drought) $824,800 $885,800 $952,000 $1,024,300 $1,102,500 $1,187,800 $1,280,500 Scenario 1: No Rate Increases $2,643,640 $2,062,640 $1,214,640 $81,640 ($1,368,360) ($2,903,860) ($4,813,360) Target Met? yes yes yes no no no no
Scenario 2: 8% Annual Rate Increases $2,643,640 $2,314,640 $1,990,640 $1,675,640 $1,360,640 $1,302,140 $1,239,640 Target Met? yes yes yes yes yes yes no
Scenario 3: 9% Annual Rate Increases $2,643,640 $2,345,640 $2,088,640 $1,882,640 $1,725,640 $1,882,140 $2,050,640 Target Met? yes yes yes yes yes yes yes
GOAL 3: POSITIVE TOTAL NET REVENUES
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Scenario 1: No Rate Increases $155,195 ($340,000) ($581,000) ($848,000) ($1,133,000) ($1,450,000) ($1,535,500) Target Met? yes no no no no no no
Scenario 2: 8% Annual Rate Increases $155,195 ($340,000) ($329,000) ($324,000) ($315,000) ($315,000) ($58,500) Target Met? yes no no no no no no
Scenario 3: 9% Annual Rate Increases $155,195 ($340,000) ($298,000) ($257,000) ($206,000) ($157,000) $156,500 Target Met? yes no no no no no yes
Proposed
Proposed
Proposed
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Figure 4: Water Scenario Comparison - Ending Water Fund Reserve Fund Balance City of Brisbane
Water Utility Rate Study 2022
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2.4 Water Cost Allocation
The water revenue requirement detailed in the previous section determines the amount of revenue to be recovered from water rates. The cost of service allocation determines how revenues will be recovered from customers based on how they use the water system. Proposition 218 requires that agencies providing “property-related services” (including water utility service) set rates and charges that are based on the cost of providing those services and are proportional to how customers use the system.

2.4.1 Overview of Water Cost of Service Methodology
The purpose of the cost allocation is to classify costs and to determine the amount of revenue that will be recovered from fixed rates and from consumption charges. The American Water Works Association (AWWA) recommends methods to classify costs among various customers. Using the Base-Extra Capacity Method as recommended by the AWWA, water operating expenses are allocated to the following categories: (a) Base, (b) Extra, (c) Meters and Services, and (d) Customer Service. The Base and Extra categories are intended to recover variable (consumption) costs, while the Customer Service and Meters and Services categories are intended to recover fixed expenses that are incurred regardless of water used.
 Base: Base costs include the expenses related to providing water under average, “base” demand conditions.
 Extra: The extra category includes costs related to providing water above the system average demand (ie. related to peak, “extra” usage).
 Meters and Services: These include costs related to maintaining and replacing water meters.  Customer Service: This category contains costs associated with serving customers, such as billing and answering customer inquiries.

2.4.2 Cost Allocation
Table 20 provides the proposed cost allocation for the water utility. 2022/23 is used as the test year for the cost allocation. Costs are allocated according to how they are incurred by the City. Based on Table 20, 15.5% of costs will be recovered from the Fixed Charges while the remaining 84.5% will be recovered from the Consumption Charges, which is in line with the current split (15.0% from Fixed Charges / 85.0% from Consumption Charges).
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Table 20: Water Cost Allocation
City of Brisbane
Water Utility Rate Study 2022
Operating Expense

FIXED CHARGES CONSUMPTION CHARGES
Total Notes
2022/23
Budget
Meters &
Services
Customer
Service Base Extra
Salaries $519,000 10% 10% 25% 55% 100% Staff Estimate
Payroll Taxes $7,000 10% 10% 25% 55% 100% Staff Estimate Benefits $289,000 10% 10% 25% 55% 100% Staff Estimate
Insurance (2) $65,000 10% 10% 25% 55% 100% Staff Estimate Supplies and Services $1,932,000 2% 2% 25% 71% 100% Peaking Admin Charges and Credits $487,000 25% 25% 25% 25% 100% Even Debt Service $316,000 10% 10% 25% 55% 100% Staff Estimate Total Water Operating Expenses $3,615,000 $280,000 $280,000 $903,800 $2,151,300 $3,615,100 Total Allocation % 7.8% 7.8% 25.0% 59.5% 100.0%

2.5 Water Rate Design Considerations
Following the allocation of costs, the next step is to derive the total cost responsibility for each customer class by developing unit costs of service for each cost function and then assigning those costs to the customer classes based on the respective service requirements of each.

2.5.1 Rate Structure Modifications
The proposed modifications to the existing water rate structure are as follows:
 Fixed Charges
 All customer classes will be charged the same Fixed Charges which will vary by meter size. o L&T recommends developing a single fixed rate structure based on meter size that applies to all customer classes. Additionally, we propose to use the AWWA meter capacity ratios to calculate rates for the larger meter sizes. The re-alignment will amend the fixed charges so that each meter size will be charged based on their proportional impact on the system.
 All customers will receive 1 unit of water with the Fixed Charges. o Currently, only customers with a 5/8” meter receive 1 unit of water with the Fixed Charges. To comply with Proposition 218, L&T recommends that the City extend the 1 ccf water allotment to all customers.
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 Consumption Charges
 All Customers --> Transition to a two-tiered rate structure o Proposed Bimonthly Tiers:
• Tier 1: 1- 20 ccf
• Tier 2: Over 20 ccf
o To comply with Proposition 218, each water rate tier breakpoint (i.e. the consumption used in each tier) and the price of each tier must be individually cost-justified. Higher use must be directly tied to specific costs such as imported water, higher electricity costs associated with peak pumping, increased maintenance, and/or conservation programs. Tiers can no longer be assigned to customers solely based on conservation objectives. For example, public agencies may not arbitrarily raise the price of higher use tiers in order to offer a discount to lower water users. o Based on input from the Infrastructure, Utilities, & Franchise Subcommittee, the first tier will be set at 20 ccf per two-month billing period. The current average bimonthly use for residential customers is 10 ccf.

2.5.2 Projected Customer Growth & Water Consumption
Table 21 estimates water consumption by customer class for the next 5 years using 2019/20 usage data as a baseline. The table also shows the estimated reduction in billed consumption with the proposed 1 ccf allotment for all customers. The estimated billed consumption is used to determine the unit costs for water consumption charges. For 2022/23, total consumption is projected at 289,715 ccf. However, 11,602 ccf will be unbilled as the proposed Fixed Charge will include 1 ccf of water for all customers.

Therefore, the total amount of billed water is 278,113 ccf. 218
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Table 21: Projected Water Consumption with 1 Unit Allotment City of Brisbane
Water Utility Rate Study 2022

CURRENT PROJECTED PROJECTED - RATE STUDY PERIOD
2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Residential
Annual Increase % 0.0% 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Annual Consumption (ccf) 109,065 109,065 109,065 110,156 111,257 112,370 113,493 114,628 115,775 Less 1 ccf Allotment 9,655 9,655 9,655 9,752 9,849 9,948 10,047 10,148 10,249 Total Consumption for
Consumption Charges 99,410 99,410 99,410 100,404 101,408 102,422 103,446 104,481 105,526 Commercial
Annual Increase % 0.0% 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Annual Consumption (ccf) 95,700 95,700 95,700 98,571 101,528 104,574 107,711 110,943 114,271 Less 1 ccf Allotment 1,400 1,400 1,400 1,442 1,485 1,530 1,576 1,623 1,672 Total Consumption for
Consumption Charges 94,300 94,300 94,300 97,129 100,043 103,044 106,135 109,320 112,599 Irrigation
Annual Increase % 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Annual Consumption (ccf) 79,400 79,400 79,400 80,988 82,608 84,260 85,945 87,664 89,417 Less 1 ccf Allotment 400 400 400 408 416 424 433 442 450 Total Consumption for
Consumption Charges 79,000 79,000 79,000 80,580 82,192 83,835 85,512 87,222 88,967 Total Consumption
Total Consumption 284,165 284,165 284,165 289,715 295,393 301,204 307,150 313,235 319,463 Less 1 ccf Allotment 11,455 11,455 11,455 11,602 11,750 11,902 12,056 12,212 12,371

TOTAL CONSUMPTION (CCF)

FOR CONSUMPTION

CHARGES
272,710 272,710 272,710 278,113 283,643 289,302 295,094 301,023 307,092 1 - The May 25, 2021 memo prepared by Jerry Flanagan shows projected SFPUC water purchases in 2025 to be 435,800 ccf/year, representing s a 44.3% increase from the 2020 total water purchases of 302,003 ccf. His projections assume that Biotech Developments in Sierra Point will be built out by 2025 and does not include the UPC parcel at Sierra Point nor the future Baylands Development.

Table 22 shows a projection of water meters, meter equivalents, and consumption for the rate study period. The number of meter equivalents is based on the total number of meters (Table 4) and the ratio of each meter size to that of the 5/8” meter. The amount of consumption that will be billed under the consumption charges is taken from Table 21 and is divided between Tier 1 and Tier 2 based on the City’s bimonthly billing data history. The number of customers is estimated to increase at 0.5% each year.

Residential consumption is conservatively estimated to increase 1.0% each year. Commercial consumption is estimated to increase by 3.0% each year. Irrigation consumption is increased each year by 2.0%.
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Table 22: Projected Customer Growth & Water Consumption City of Brisbane
Water Utility Rate Study 2022

CURRENT PROJECTED PROJECTED - RATE STUDY PERIOD
2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28

NUMBER OF METERS
Growth Increase % 0.00% 0.00% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Total Water Meters 2,038 2,038 2,038 2,048 2,058 2,069 2,079 2,089 2,090 Total Meter
Equivalents 3,259 3,259 3,259 3,275 3,292 3,308 3,325 3,341 3,358 WATER

CONSUMPTION
Residential
Annual Increase % 0.0% 0.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% Consumption
Tier 1: 1 - 20 ccf 86,634 86,634 86,634 87,501 88,376 89,259 90,152 91,054 91,964 Tier 2: Over 20 ccf 12,776 12,776 12,776 12,903 13,032 13,163 13,294 13,427 13,562 Subtotal Residential 99,410 99,410 99,410 100,404 101,408 102,422 103,446 104,481 105,526 Commercial
Annual Increase % 0.0% 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Consumption (1)
Tier 1: 1 - 20 ccf 26,948 26,948 26,948 27,757 28,590 29,447 30,331 31,241 32,178 Tier 2: Over 20 ccf 67,352 67,352 67,352 69,372 71,453 73,597 75,805 78,079 80,421 Subtotal Commercial 94,300 94,300 94,300 97,129 100,043 103,044 106,135 109,320 112,599 Irrigation
Annual Increase % 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Consumption
Tier 1: 1 - 20 ccf 12,344 12,344 12,344 12,591 12,843 13,100 13,362 13,629 13,902 Tier 2: Over 20 ccf 66,656 66,656 66,656 67,989 69,349 70,736 72,150 73,593 75,065 Subtotal Irrigation 79,000 79,000 79,000 80,580 82,192 83,835 85,512 87,222 88,967 Total Consumption
Annual Increase % 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Consumption
Tier 1: 1 - 20 ccf 125,927 125,927 125,927 127,849 129,808 131,807 133,845 135,923 138,044 Tier 2: Over 20 ccf 146,783 146,783 146,783 150,264 153,834 157,495 161,249 165,099 169,048 Total Consumption 272,710 272,710 272,710 278,113 283,643 289,302 295,094 301,023 307,092 1 - The May 25, 2021 memo prepared by Jerry Flanagan shows projected SFPUC water purchases in 2025 to be 435,800 ccf/year, representing s a 44.3% increase from the 2020 total water purchases of 302,003 ccf. His projections assume that Biotech Developments in Sierra Point will be built out by 2025 and does not include the UPC parcel at Sierra Point nor the future Baylands Development
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2.6 Water Rate Design for Water Scenario #3

2.6.1 Current Water Rate Revenues - Fixed vs. Consumption Revenue Recovery Table 23 summarizes the percentage of service charge revenues derived from the Fixed Charges versus the Consumption Charges. On average, the City collects roughly 15.0%% of revenues from the Fixed Charges and 85.0% from the Consumption Charge. Based on input from staff, the City would like to maintain the current 15% fixed / 85% variable revenue recovery because the largest expense for the Water Utility is wholesale water purchases from SFPUC.

Table 23: Current Water Sales - Fixed vs. Variable Water Service Revenue City of Brisbane
Water Utility Rate Study 2022

2.6.2 Water Scenario #3: Annual Revenue Requirement Allocation Table 24 shows the annual revenue requirement for Scenario #3: 9.0% Annual Rate Increases for the rate study period based on the cost allocation percentages from Table 20 and the total water rate revenue requirements for each year from the cash flow projection (Table 18). The fixed charge revenue requirement is based on the meters and services and customer service categories from the cost allocation. The consumption charge revenue requirement is based on the base and extra categories.

Fixed Charges
Consumption
Charges
Total Water Sales
Revenues
Total Revenues City vs. GVMID
City $283,555 $1,351,795 $1,635,350
GVMID $198,935 $1,410,981 $1,609,916
Total Water Sales Revenues $482,490 $2,762,776 $3,245,267 % of Total 14.9% 85.1% 100.0%
Total Revenues by Customer Class
Residential $261,029 $735,794 $996,824
Commercial $179,813 $1,010,745 $1,190,557
Irrigation $41,648 $1,016,237 $1,057,886
Total Water Sales Revenues $482,490 $2,762,776 $3,245,267 % of Total 14.9% 85.1% 100.0%
Source: Utility Billing Data 2018-202 Water & sewer Export 221
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Table 24: Annual Revenue Requirement Allocation
City of Brisbane
Water Utility Rate Study 2022
Cost
Allocation %

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28
Total Revenue
Requirement (1) $3,270,000 $3,564,000 $3,885,000 $4,235,000 $4,616,000

FIXED CHARGES
Meters & Services 7.8% $253,425 $276,210 $301,088 $328,213 $357,740 Customer Service Charge 7.8% $253,425 $276,210 $301,088 $328,213 $357,740 Total Fixed Charges 15.5% $506,850 $552,420 $602,175 $656,425 $715,480

CONSUMPTION CHARGES
Base 25.0% $817,500 $891,000 $971,250 $1,058,750 $1,154,000 Extra 59.5% $1,945,977 $2,120,936 $2,311,964 $2,520,249 $2,746,982 Total Consumption Charges 84.5% $2,763,477 $3,011,936 $3,283,214 $3,578,999 $3,900,982 TOTAL 100.0% $3,270,327 $3,564,356 $3,885,389 $4,235,424 $4,616,462 1 - From Cash Flow (Table 18, line 5)

2.6.3 Water Scenario #3: Water Fixed Charge Derivation
The rate derivation for the Fixed Charges is shown on Table 25. The total revenue requirement for meter and services are divided by the total number of meter equivalents. Customer service costs are divided amongst the total number of meters. These two categories are then combined into a single Fixed Charge that increases based on meter size.

For 2023/24, the proposed meter equivalent charge $12.83 is multiplied by the corresponding meter equivalent ratio to calculate a charge for each meter size. The customer service charge of $20.52 is added to the meter equivalent charge to derive a total fixed meter charge. The proposed total bimonthly Fixed Charge for a 5/8” or 3/4” meter is $33.35 for 2023/24. 222
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Table 25: Water Fixed Charge Derivation
City of Brisbane
Water Utility Rate Study 2022

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28

REVENUE REQUIREMENT
Meters & Services $253,425 $276,210 $301,088 $328,213 $357,740 Customer Service Charge $253,425 $276,210 $301,088 $328,213 $357,740 Total Fixed Charge Revenue Requirement $506,850 $552,420 $602,175 $656,425 $715,480

METER EQUIVALENT CHARGE
Total Meter Equivalent Charge Revenue Requirement 7.8% $253,425 $276,210 $301,088 $328,213 $357,740 Total Number of Meter Equivalents 3,292 3,308 3,325 3,341 3,358 Total Meter Equivalent Charge $12.83 $13.92 $15.09 $16.37 $17.76 Meter Equivalent Charge by Meter Size
Meter Size
Meter
Ratio
5/8" 1.00 $12.83 $13.92 $15.09 $16.37 $17.76
3/4" 1.00 $12.83 $13.92 $15.09 $16.37 $17.76
1" 1.67 $21.38 $23.20 $25.15 $27.28 $29.60
1-1/2" 3.33 $42.77 $46.40 $50.30 $54.57 $59.20
2" 5.33 $68.43 $74.24 $80.48 $87.31 $94.72
3" 10.67 $136.85 $148.48 $160.96 $174.61 $189.44
4" 16.67 $213.83 $232.00 $251.50 $272.83 $296.00
6" 33.33 $427.67 $464.00 $503.00 $545.67 $592.00

CUSTOMER SERVICE CHARGE
Total Customer Service Charge Revenue Requirement 7.8% $253,425 $276,210 $301,088 $328,213 $357,740 Total Number of Meters 2,058 2,069 2,079 2,089 2,090
Total Customer Service Charge per Account $20.52 $22.25 $24.14 $26.18 $28.52 TOTAL BIMONTHLY FIXED CHARGE (1)
Meter Size
5/8" $33.35 $36.17 $39.23 $42.55 $46.28
3/4" $33.35 $36.17 $39.23 $42.55 $46.28
1" $41.90 $45.45 $49.29 $53.46 $58.12
1-1/2" $63.29 $68.65 $74.44 $80.75 $87.72
2" $88.95 $96.49 $104.62 $113.49 $123.24
3" $157.37 $170.73 $185.10 $200.79 $217.96
4" $234.35 $254.25 $275.64 $299.01 $324.52
6" $448.19 $486.25 $527.14 $571.85 $620.52
1 - Total Bimonthly Fixed Charge is the sum of the "Meter Equivalent Charge" by meter size plus the "Total Customer Service Charge per Account" 223
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2.6.4 Water Scenario #3: Consumption Charge Derivation
Consumption charges are calculated based on the revenue requirements derived in Table 24 and the projected total consumption per tier calculated in Table 22. The revenue requirement for each year is divided by the projected consumption to derive a per unit cost, see Table 26. The base revenue requirement is used for Tier 1 and the extra revenue requirement is used for Tier 2. For 2023/24, the proposed rates are $6.30 per ccf for Tier 1 and $12.65 per ccf for Tier 2.

Table 26: Consumption Charge Rate Derivation
City of Brisbane
Water Utility Rate Study 2022

PROJECTED - RATE STUDY PERIOD
2023/24 2024/25 2025/26 2026/27 2027/28

REVENUE REQUIREMENT
Base Charge Revenue Requirement $817,500 $891,000 $971,250 $1,058,750 $1,154,000 Extra Charge Revenue Requirement $1,945,977 $2,120,936 $2,311,964 $2,520,249 $2,746,982 Total Consumption Charge Revenue Requirement $2,763,477 $3,011,936 $3,283,214 $3,578,999 $3,900,982

CONSUMPTION CHARGE DERIVATION
All Customers
Tier 1 Revenue Requirement $817,500 $891,000 $971,250 $1,058,750 $1,154,000 Tier 1: 1-20 ccf Consumption (ccf) 129,808 131,807 133,845 135,923 138,044 Tier 1 Rate per ccf $6.30 $6.76 $7.26 $7.79 $8.36
Tier 2 Revenue Requirement $1,945,977 $2,120,936 $2,311,964 $2,520,249 $2,746,982 Tier 2: Over 20 ccf Consumption (ccf) 153,834 157,495 161,249 165,099 169,048 Tier 2 Rate per ccf $12.65 $13.47 $14.34 $15.27 $16.25
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2.6.5 Water Scenario #3: Proposed 5-Year Schedule of Rates Table 27 summarizes the proposed bimonthly water rates. All customers including residential, commercial, and irrigation customers are proposed to be charged according to the proposed rate schedule shown. The estimated SFPUC Rate and Bond Surcharge is also shown for reference. The first rate change is proposed to take effect on July 1, 2023, with subsequent rate increases each July 1 through 2027.

Table 27: Proposed Bimonthly Water Rates
City of Brisbane
Water Utility Rate Study 2022

RATE STUDY PERIOD
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027

FIXED CHARGES
Meter Size
5/8" $33.35 $36.17 $39.23 $42.55 $46.28
3/4" $33.35 $36.17 $39.23 $42.55 $46.28
1" $41.90 $45.45 $49.29 $53.46 $58.12
1-1/2" $63.29 $68.65 $74.44 $80.75 $87.72
2" $88.95 $96.49 $104.62 $113.49 $123.24
3" $157.37 $170.73 $185.10 $200.79 $217.96
4" $234.35 $254.25 $275.64 $299.01 $324.52
6" $448.19 $486.25 $527.14 $571.85 $620.52
CONSUMPTION CHARGES (per ccf)
(1)
All Customers (Usage over 1 ccf)
Tier 1: 1- 20 ccf $6.30 $6.76 $7.26 $7.79 $8.36
Tier 2: Over 20 ccf $12.65 $13.47 $14.34 $15.27 $16.25
1 - 1 ccf (hundred cubic feet) = 748 gallons
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2.6.6 Scenario #3: Water Bill Impacts
For FY 2023/24, the proposed 9.0% revenue adjustment in the cash flow does not directly correlate to a

9.0% increase in rates due to the cost of service reallocation and the updated rate structure. Because of the reallocation, the bill impacts to customers for the first year will vary based on customer class, meter size, and actual consumption. Moreover, water consumption, particularly for single family customers, typically varies due to seasonal variations in weather and/or other factors. Hence, a single customer could face a range of impacts throughout the year. Table 28 includes a sample of bill impacts for residential, commercial, and irrigation customers at different levels of water use.

Table 28: Sample Bimonthly Water Bill Impacts
City of Brisbane
Water Utility Rate Study 2022
RESIDENTIAL BILL IMPACTS - 5/8" METER
Bimonthly Current Proposed
Use (ccf) Bill
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027
Residential: 5/8" meter, 1 ccf
Fixed Meter Charge - 5/8"" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 1 ccf 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 2: 2 - 3 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 3: 3 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Tier 4: 4 - 8 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 5: 9 - 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 6: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Bimonthly Water Bill $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 $ Change $10.68 $2.82 $3.06 $3.32 $3.73
% Change 47.1% 8.5% 8.5% 8.5% 8.8%
Residential: 5/8" meter, 4 ccf
Fixed Meter Charge - 5/8"" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 1 ccf 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 2: 2 - 3 ccf 1 $2.17 $6.30 $6.76 $7.26 $7.79 $8.36 Tier 3: 3 ccf 1 $5.63 $6.30 $6.76 $7.26 $7.79 $8.36
Tier 4: 4 - 8 ccf 1 $7.00 $6.30 $6.76 $7.26 $7.79 $8.36 Tier 5: 9 - 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 6: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 4 $14.80 $18.89 $20.28 $21.77 $23.37 $25.08 Total Bimonthly Water Bill $37.47 $52.24 $56.45 $61.00 $65.92 $71.36 $ Change $14.77 $4.21 $4.55 $4.92 $5.44
% Change 39.4% 8.1% 8.1% 8.1% 8.3%
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Water and Sewer Utility Rate Study 2022
Bimonthly Current Proposed
Use (ccf) Bill
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027
Residential: 5/8" meter, 10 ccf
Fixed Meter Charge - 5/8"" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 1 ccf 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 2: 2 - 3 ccf 1 $2.17 $6.30 $6.76 $7.26 $7.79 $8.36 Tier 3: 3 ccf 1 $5.63 $6.30 $6.76 $7.26 $7.79 $8.36
Tier 4: 4 - 8 ccf 5 $35.00 $31.49 $33.80 $36.28 $38.95 $41.80 Tier 5: 9 - 16 ccf 2 $17.38 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 6: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 10 $60.18 $56.68 $60.84 $65.31 $70.10 $75.24 Total Bimonthly Water Bill $82.85 $90.03 $97.01 $104.54 $112.65 $121.52 $ Change $7.18 $6.98 $7.53 $8.11 $8.86
% Change 8.7% 7.8% 7.8% 7.8% 7.9%
Residential: 5/8" meter, 20 ccf
Fixed Meter Charge - 5/8"" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 1 ccf 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 2: 2 - 3 ccf 1 $2.17 $6.30 $6.76 $7.26 $7.79 $8.36 Tier 3: 3 ccf 1 $5.63 $6.30 $6.76 $7.26 $7.79 $8.36
Tier 4: 4 - 8 ccf 5 $35.00 $31.49 $33.80 $36.28 $38.95 $41.80 Tier 5: 9 - 16 ccf 8 $69.52 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 6: Over 16 ccf 4 $44.20 $25.19 $27.04 $29.03 $31.16 $33.44 Subtotal Consumption Charge 20 $156.52 $119.66 $128.44 $137.87 $148.00 $158.83 Total Bimonthly Water Bill $179.19 $153.01 $164.61 $177.10 $190.55 $205.11 $ Change ($26.18) $11.60 $12.50 $13.44 $14.57
% Change -14.6% 7.6% 7.6% 7.6% 7.6%
Residential: 5/8" meter, 40 ccf
Fixed Meter Charge - 5/8"" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 1 ccf 1 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 2: 2 - 3 ccf 1 $2.17 $6.30 $6.76 $7.26 $7.79 $8.36 Tier 3: 3 ccf 1 $5.63 $6.30 $6.76 $7.26 $7.79 $8.36
Tier 4: 4 - 8 ccf 5 $35.00 $31.49 $33.80 $36.28 $38.95 $41.80 Tier 5: 9 - 16 ccf 8 $69.52 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 6: Over 16 ccf 24 $265.20 $278.19 $296.37 $315.78 $336.46 $358.43 Subtotal Consumption Charge 40 $377.52 $372.65 $397.77 $424.63 $453.30 $483.83 Total Bimonthly Water Bill $400.19 $406.00 $433.94 $463.86 $495.85 $530.11 $ Change $5.81 $27.94 $29.92 $31.99 $34.26
% Change 1.5% 6.9% 6.9% 6.9% 6.9%
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RESIDENTIAL BILL IMPACTS - 3/4" METER
Bimonthly Current Proposed
Use (ccf) Bill
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027
Residential: 3/4" meter, 1 ccf
Fixed Meter Charge – 3/4" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 3 ccf 1 $5.19 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 2: 4 - 8 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 3: 9 - 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 4: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 1 $5.19 $0.00 $0.00 $0.00 $0.00 $0.00 Total Bimonthly Water Bill $27.86 $33.35 $36.17 $39.23 $42.55 $46.28 $ Change $5.49 $2.82 $3.06 $3.32 $3.73
% Change 19.7% 8.5% 8.5% 8.5% 8.8%
Residential: 3/4" meter, 4 ccf
Fixed Meter Charge – 3/4" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 3 ccf 3 $15.57 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 2: 4 - 8 ccf 1 $7.00 $6.30 $6.76 $7.26 $7.79 $8.36 Tier 3: 9 - 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Tier 4: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 4 $22.57 $18.89 $20.28 $21.77 $23.37 $25.08 Total Bimonthly Water Bill $45.24 $52.24 $56.45 $61.00 $65.92 $71.36 $ Change $7.00 $4.21 $4.55 $4.92 $5.44
% Change 15.5% 8.1% 8.1% 8.1% 8.3%
Residential: 3/4" meter, 10 ccf
Fixed Meter Charge – 3/4" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 3 ccf 3 $15.57 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 2: 4 - 8 ccf 5 $35.00 $31.49 $33.80 $36.28 $38.95 $41.80 Tier 3: 9 - 16 ccf 2 $17.38 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 4: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 10 $67.95 $56.68 $60.84 $65.31 $70.10 $75.24 Total Bimonthly Water Bill $90.62 $90.03 $97.01 $104.54 $112.65 $121.52 $ Change ($0.59) $6.98 $7.53 $8.11 $8.86
% Change -0.7% 7.8% 7.8% 7.8% 7.9%
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Water and Sewer Utility Rate Study 2022
Bimonthly Current Proposed
Use (ccf) Bill
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027
Residential: 3/4" meter, 20 ccf
Fixed Meter Charge – 3/4" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 3 ccf 3 $15.57 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 2: 4 - 8 ccf 5 $35.00 $31.49 $33.80 $36.28 $38.95 $41.80 Tier 3: 9 - 16 ccf 8 $69.52 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 4: Over 16 ccf 4 $44.20 $25.19 $27.04 $29.03 $31.16 $33.44 Subtotal Consumption Charge 20 $164.29 $119.66 $128.44 $137.87 $148.00 $158.83 Total Bimonthly Water Bill $186.96 $153.01 $164.61 $177.10 $190.55 $205.11 $ Change ($33.95) $11.60 $12.50 $13.44 $14.57
% Change -18.2% 7.6% 7.6% 7.6% 7.6%
Residential: 3/4" meter, 40 ccf
Fixed Meter Charge – 3/4" $22.67 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 3 ccf 3 $15.57 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 2: 4 - 8 ccf 5 $35.00 $31.49 $33.80 $36.28 $38.95 $41.80 Tier 3: 9 - 16 ccf 8 $69.52 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 4: Over 16 ccf 24 $265.20 $278.19 $296.37 $315.78 $336.46 $358.43 Subtotal Consumption Charge 40 $385.29 $372.65 $397.77 $424.63 $453.30 $483.83 Total Bimonthly Water Bill $407.96 $406.00 $433.94 $463.86 $495.85 $530.11 $ Change ($1.96) $27.94 $29.92 $31.99 $34.26
% Change -0.5% 6.9% 6.9% 6.9% 6.9%

COMMERCIAL BILL IMPACTS
Bimonthly Current Proposed
Use (ccf) Bill
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027
Commercial: 5/8" meter, 10 ccf
Fixed Meter Charge - 5/8" $35.07 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 8 ccf 8 $41.58 $44.08 $47.32 $50.80 $54.53 $58.52 Tier 2: 9 - 16 ccf 2 $17.38 $12.60 $13.52 $14.51 $15.58 $16.72 Tier 3: Over 16 ccf 0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Subtotal Consumption Charge 10 $58.96 $56.68 $60.84 $65.31 $70.10 $75.24 Total Bimonthly Water Bill $94.03 $90.03 $97.01 $104.54 $112.65 $121.52 $ Change ($4.00) $6.98 $7.53 $8.11 $8.86
% Change -4.3% 7.8% 7.8% 7.8% 7.9%
Commercial: 1-1/2" meter, 40 ccf
Fixed Meter Charge - 1-1/2" $0.00 $33.35 $36.17 $39.23 $42.55 $46.28 Consumption Charge
Tier 1: 0 - 8 ccf 8 $56.00 $44.08 $47.32 $50.80 $54.53 $58.52 Tier 2: 9 - 16 ccf 8 $69.52 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 3: Over 16 ccf 24 $265.20 $278.19 $296.37 $315.78 $336.46 $358.43 Subtotal Consumption Charge 40 $390.72 $372.65 $397.77 $424.63 $453.30 $483.83 Total Bimonthly Water Bill $390.72 $406.00 $433.94 $463.86 $495.85 $530.11 $ Change $15.28 $27.94 $29.92 $31.99 $34.26
% Change 3.9% 6.9% 6.9% 6.9% 6.9%
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IRRIGATION BILL IMPACTS
Bimonthly Current Proposed
Use (ccf) Bill
July 1,
2023
July 1,
2024
July 1,
2025
July 1,
2026
July 1,
2027
Irrigation: 1-1/2" meter, 50 ccf
Fixed Meter Charge - 5/8" $92.47 $88.95 $96.49 $104.62 $113.49 $123.24 Consumption Charge
Tier 1: 0 - 8 ccf 8 $41.42 $44.08 $47.32 $50.80 $54.53 $58.52 Tier 2: 9 - 16 ccf 8 $90.80 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 3: Over 16 ccf 34 $448.46 $455.29 $484.91 $516.51 $550.17 $585.93 Subtotal Consumption Charge 50 $580.68 $549.75 $586.31 $625.36 $667.01 $711.32 Total Bimonthly Water Bill $673.15 $638.70 $682.80 $729.98 $780.49 $834.56 $ Change ($34.46) $44.10 $47.18 $50.51 $54.07
% Change -5.1% 6.9% 6.9% 6.9% 6.9%
Irrigation: 2" meter, 100 ccf
Fixed Meter Charge - 2" $92.47 $88.95 $96.49 $104.62 $113.49 $123.24 Consumption Charge
Tier 1: 0 - 8 ccf 8 $41.42 $44.08 $47.32 $50.80 $54.53 $58.52 Tier 2: 9 - 16 ccf 8 $90.80 $50.38 $54.08 $58.05 $62.31 $66.88 Tier 3: Over 16 ccf 84 $1,107.96 $1,087.78 $1,158.24 $1,233.40 $1,313.42 $1,398.42 Subtotal Consumption Charge 100 $1,240.18 $1,182.24 $1,259.64 $1,342.25 $1,430.26 $1,523.81 Total Bimonthly Water Bill $1,332.65 $1,271.19 $1,356.13 $1,446.87 $1,543.75 $1,647.05 $ Change ($61.46) $84.94 $90.74 $96.88 $103.30
% Change -4.6% 6.7% 6.7% 6.7% 6.7%
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Figure 5 below demonstrates the typical bimonthly water bill a residential customer with a 5/8” or 3/4” meter will be charged during each year of the five-year Proposition 218 period.

Figure 5: Comparison of Bimonthly Water Bill for Typical Residential Customer City of Brisbane
Water Utility Rate Study 2022
* Does not include Drought Surcharge or Capital Charge
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2.6.7 Regional Water Bill Survey
The bar graph in Figure 6 below compares the City’s current typical bimonthly residential water bill based on a 5/8” or 3/4” meter using 10 ccf over a 2-month period with the proposed 2023/24 bill. The bill estimates also include the Drought Contingency Charge ($2.32) and half of the Capital Projects Charge that is evenly split with the Sewer Bill ($70/2 = $35). The City’s bill is compared with those of other local agencies.

Figure 6: Bimonthly Water Bill Survey
City of Brisbane
Water Utility Rate Study 2022
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2.7 Water Low Income Discount
To comply with Proposition 218’s cost of service requirements, water rate revenues from one group of customers cannot be used to subsidize the rates of another group. Instead, the City could utilize nonrate revenues, such as General Fund revenues, interest earnings, or delinquent penalties to fund a low income discount program. Moreover, to eliminate the administrative burden of the City developing its own low-income criteria, it is recommended that the City provide assistance to low income residents who meet the criteria of other local assistance programs such as PG&E’s CARE program.

The low income discount program should be reviewed annually by the City to determine whether the water fund has adequate non-rate revenues to fund the program. Because non-water rate revenues will be used to pay for the discount, the amount of the low income discount is based on the discretion of the City.

Table 29 calculates a sample low income discount for water that is funded from a General Fund transfer.

This transfer is estimated at $37,500 for the current year. The City estimates that approximately 400 customers or about 24.0% of all accounts could qualify for a discount based on the PG&E’s CARE program requirements. Based on 400 customers, the table shows a bimonthly discount of approximately $15.60 per customer. For an average residential customer (10 ccf bimonthly use), this equates to a

17.3% discount off the proposed bimonthly bill for July 1, 2023.

Table 29: Water Low Income Discount
City of Brisbane
Water Utility Rate Study 2022
Total Number of Residential Water Customers 1,650
Estimated Number of Customers Eligible for Discount 400 Total Est. Water Low Income Discount Revenue $37,500
Annual Discount per Customer $93.80
Bimonthly Discount per Customer $15.60
Proposed Average Bimonthly Water Bill (10 ccf) for July 1, 2023 $90.03 Proposed Average Bimonthly Water Bill (10 ccf) with Discount for July 1, 2023 $74.43 % of Discount 17.3%
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SECTION 3: SEWER RATE STUDY
The City of Brisbane provides sewer service to approximately 1,900 residents, several commercial areas, and some light industrial development. On average, the City’s sewage effluent totals approximately 173,000 ccf each year. The last sewer rate study was conducted in 2001, and sewer rates for operations have not increased since 2012. Based on City billing records, the current average monthly residential sewer flow is 5 ccf per month, or a total of 10 ccf per bimonthly billing period. The average sewer bill is currently $106.67 per bimonthly billing period (not including Capital Project Charges).

3.1 Current Wastewater Rates
A schedule of current bimonthly wastewater rates is provided in Table 30. The City’s current rate structure includes two components: (a) a Fixed Charge and (b) a Variable Rate.

3.1.1 Fixed Charge
All customers are charged the same Fixed Charge. The Fixed Charge is the minimum charge for all customers. Even when a customer does not use the sewer system, the City incurs fixed costs associated with maintaining the ability or readiness to serve each connection.

The Fixed Charges are intended to recover the City’s fixed expenses and currently generate about 40.0% of total wastewater rate revenues. Fixed costs include staffing, customer service, debt service, system maintenance, and repairs.

3.1.2 Variable Rate
In addition to the Fixed Charge, customers pay a Variable Rate per ccf based on a two-tiered rate structure that varies based on customer class. For residential customers, sewer flow is approximated using winter consumption for the four-month period between October and January. Commercial accounts are billed according to three customer strength categories.

The Variable Rate is intended to recover costs that vary based on the amount of sewer flow and currently generate roughly 60.0% of total wastewater rate revenues. Variable expenses include treatment costs from the City of San Francisco, utilities, and chemicals.

3.1.3 Capital Project Charge
In April of 2014, the City Council approved the first Capital Project Charge to pay for infrastructure projects for the water and sewer systems. The projects are based on the City’s Capital Improvement Plan which outlines the need for approximately $5 million in projects every five years. The policy adopted in 2014 included placing a new Capital Project Charge on the water and sewer bill four times over a twenty-year period. The second charge should have been implemented in 2020 but was delayed due to the impacts of COVID. To prevent further delays in completing the projects, the City Council adopted the second of four increases to the Capital Project Charge in October 2022. 234
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The Capital Project Charge is levied according to a tiered rate system based on springtime usage (midFebruary through mid-June) to ensure that lower water users pay less than higher users. Total Capital Project Charge revenue is evenly split between the water and sewer funds. The Capital Project Charge will not be reviewed or analyzed in this study.

Table 30: Current Bi-Monthly Sewer Rates (Effective 10/15/12) City of Brisbane
Sewer Utility Rate Study 2022
RESIDENTIAL Bimonthly Charge
Flat Charge $68.87
Variable Charge [1]
Tier 1: 0 - 8 ccf $2.81
Tier 2: Over 8 ccf $7.66
COMMERCIAL [2] Bimonthly Charge
Standard
Flat Charge $68.87
Variable Charge
Tier 1: 0 - 8 ccf $3.84
Tier 2: Over 8 ccf $7.66
Medium
Flat Charge $68.87
Variable Charge
Tier 1: 0 - 8 ccf $5.68
Tier 2: Over 8 ccf $9.74
Heavy
Flat Charge $68.87
Variable Charge
Tier 1: 0 - 8 ccf $7.59
Tier 2: Over 8 ccf $11.82
1 - Residential bill is based on winter consumption (Oct, Nov, Dec & Jan) 2 - Standard: offices, retail establishments without restaurant, warehouses, churches, and schools Medium: automotive services, retail establishments or offices with restaurant, laundromats, and markets Heavy: restaurants, food preparation establishments, printing shops, metal fabrication shops, and laboratories.

3.2 Wastewater System Overview

3.2.1 Wastewater System
Wastewater is collected and conveyed by the sewer gravity system, force mains, and four City-owned lift stations: Hitachi Lift Station, Harbor Lift Station, Sierra Point Lift Station, and Valley Drive Lift Station. 235
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The sewer collection system consists of more than 80,000 feet of laterals, mains, trunks, and 20,000 feet of forcemains ranging in size from 6 to 24 inches in diameter. The majority of the wastewater collected within the City’s service area flows by gravity or is pumped by privately owned lift stations to one of the City’s lift stations. From the Valley Drive Lift Station, all wastewater in the City and GVMID service areas is then pumped to the Southeast Water Pollution Control Plant in San Francisco via the Candlestick Interceptor Trunk Line.

3.2.2 Sewer Customers and Flow
Table 31 includes the current number of accounts and flow by customer strength. Residential customers represent about 87.0% of total accounts and roughly 52.0% of total flow.

Table 31: Current Sewer Accounts & Flow by Customer Class City of Brisbane
Sewer Utility Rate Study 2022
Current % of Total
NO. OF ACCOUNTS (1)
Residential 1,669 87.0%
Standard Commercial 215 11.2%
Medium Commercial 8 0.4%
Heavy Commercial 26 1.4%
Total 1,918 100.0%

SEWER FLOW
Residential 89,719 51.9%
Standard Commercial 37,290 21.6%
Medium Commercial 4,261 2.5%
Heavy Commercial 41,651 24.1%
Total 172,921 100.0%
1 - Based on 2021 billing data

3.3 Wastewater Financial Plan

3.3.1 Sewer Reserves
For accounting purposes, the City’s Utility Fund (Fund 540) combines water and sewer finances into one fund. As of July 1, 2020, the total fund balance for the Utility Fund (Fund 540) in “Cash and investments” was approximately $7.7 million. However, for the purposes of this study, the total reserves have been allocated between the water and sewer funds as shown on Table 32. Because the Sewer Utility has been operating in a deficit, additional reserves have been assigned to sewer to mitigate rate increases. 236
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Table 32: Utility Fund (Fund 540) Reserves
City of Brisbane
Sewer Utility Rate Study 2022
Adequate fund reserves protect the City when faced with unforeseen financial challenges such as emergency expenses or revenue deficits. Fund reserves allow the City to maintain its financial health and positive credit ratings, especially during emergencies. Moreover, funding can be drawn from reserves to supplement rate revenues lost during drought conditions or other unexpected situations. It is acceptable if reserves dip below the target on a temporary basis, provided the City takes action to attain the target over the longer run.

The City currently has the following sewer reserve fund target:
o Operating Reserve: The fund balance target is equal to 25% of annual operating expenses per City policy. This is in line with industry standards that recommend an operating reserve target of at least 25% of annual expenses to account for the time (at least 4 months) that it would take an agency to approve new rate increases to comply with Proposition 218.

3.3.2 Sewer Revenues
Table 33 shows a history of revenues for the City’s Utility Fund (Fund 540). The “Water Sales” revenues are evenly split between City Water and GVMID Water. “Sewer Service Charges” are evenly split between City Sewer and GVMID Sewer. The “GVMID Only” tax revenues are divided evenly by the three GVMID utilities (GVMID water, sewer, and storm drain) to ensure that storm drain revenues are not included in this study. All Other Revenues including “Investment Earnings,” “Low Income Rate Assistance,” and “Capital Charge” are divided evenly amongst the four utilities.

Source: Proprietry Funds, Statement of Net Position, June 30, 2020 2) Includes GVMID
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Table 33: Utility Fund (Fund 540) Budgeted Revenues
City of Brisbane
Sewer Utility Rate Study 2022
REVENUE CATEGORY 2018/19 2019/20 2020/21 2021/22
WATER ONLY (1)
40801 Water Sales $3,050,110 $2,950,000 $2,750,000 $3,000,000 40804 Meter Connection Fees $68,663 $20,000 $20,000 $20,000 40805 Fire Service Charges $118,952 $115,000 $115,000 $115,000 40806 Altamar Meter Reading Fee $7,656 $7,500 $7,500 $7,500 Drought Reserve Charge $95,481 $120,000 $100,000 $100,000 Total Water Only $3,340,862 $3,212,500 $2,992,500 $3,242,500 SEWER ONLY (2)
40820 Sewer Service Charges $2,188,866 $2,200,000 $2,000,000 $2,000,000 40821 Sewer Connection Fees $123,706 $3,000 $3,000 $3,000 Total Sewer Only $2,312,572 $2,203,000 $2,003,000 $2,003,000 GVMID ONLY (3)
40101 Current Secured Tax $27,358 $29,000 $29,000 $29,000 40102 Current Unsecured Tax $1,513 $1,500 $1,500 $1,500 40103 Prior Year Tax ($1) $0 $0 $0
40105 Supplemental Property Taxes $1,048 $0 $0 $0
40108 Property Tax from RDA $2,866 $100 $100 $100
40150 ERAF $134 $100 $100 $100
Total GVMID $32,918 $30,700 $30,700 $30,700
ALL OTHER REVENUES (4)
40501 Investment Earnings $133,599 $50,000 $50,000 $50,000 40503 Unrealized-Gain/Loss $96,152 $0 $0 $0
40609 H.O.P.T R $121 $100 $100 $100
40770 Processing Fee $5,472 $0 $0 $0
40802 Account Open/Reconnections $2,987 $3,000 $3,000 $3,000 40803 Late Payment Charges $8,117 $10,000 $10,000 $10,000 40810 Less: Low Income Rate Assistance ($42,336) ($50,000) ($75,000) ($75,000) 40825 Capital Charge $378,443 $365,000 $365,000 $365,000 40941 Returned Check Fees $75 $0 $0 $0
40959 Reimbursed Expenses - Current Year $3,541 $0 $0 $0 40961 Transfers from Other Funds $43,000 $50,000 $75,000 $75,000 Total All Other Revenues $629,172 $428,100 $428,100 $428,100 TOTAL REVENUES $6,315,524 $5,874,300 $5,454,300 $5,704,300 Source: Budget 2020_2022
1 - Divided by 2 between City Water & GVMID Water
2 - Divided by 2 between City Sewer & GVMID Sewer
3 - Divided by 3 between GVMID Water, Sewer, & Stormwater 4 - Divided by 4 between City Water, City Sewer, GVMID Water, & GVMID Sewer Actual Budgeted
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Table 34 summarizes total revenues for the Sewer Utility. For 2022/23, Sewer Service Revenues are estimated at $2 million with total sewer revenues projected at $2.2 million.

Table 34: Sewer Utility Revenues
City of Brisbane
Sewer Utility Rate Study 2022
1 – All other revenues divided by 2 (Table 33)
Actual
2018/19 2019/20 2020/21 2021/22

SEWER REVENUES
Sewer Service Revenues $2,188,866 $2,200,000 $2,000,000 $2,000,000 Sewer Connection Fees $123,706 $3,000 $3,000 $3,000
All Other Revenues (1) $314,586 $214,050 $214,050 $214,050 Total $2,627,158 $2,417,050 $2,217,050 $2,217,050
Percent Change -8.0% -8.3% 0.0%

Budget
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3.3.3 Sewer Expenses
Table 35 summarizes the operating expenses for the Sewer Utility (Fund 6130) based on the budget. On average, operating expenses have increased by 9.1% over the past 4 years. The most significant increase was for “Service and Supplies” which includes treatment costs from the City of San Francisco.

Table 35: Sewer Utility (Fund 6130) Operating Expenses
City of Brisbane
Sewer Utility Rate Study 2022
Avg Annual
Expense 2018/19 2019/20 2020/21 2021/22 Increase
Salaries $267,242 $233,759 $322,891 $335,165
Percent Change 1.9% -12.5% 38.1% 3.8% 5.0%
Payroll Taxes $4,062 $3,357 $4,421 $4,599
Percent Change 3.6% -17.4% 31.7% 4.0% 3.2%
Benefits $122,495 $143,745 $158,152 $184,923
Percent Change 1.9% 17.3% 10.0% 16.9% 9.0%
Insurance $24,716 $24,664 $37,974 $38,113
Percent Change 22.5% -0.2% 54.0% 0.4% 13.6%
Supplies and Services $1,125,704 $1,128,565 $1,230,164 $1,487,945 Percent Change 32.0% 0.3% 9.0% 21.0% 11.8%
Admin Charges and Credits $258,621 $289,277 $331,504 $337,027 Percent Change 3.2% 11.9% 14.6% 1.7% 6.1%
TOTAL CITY SEWER OPERATING EXPENSES $1,887,323 $1,927,367 $2,170,105 $2,472,772 Percent Change 18.1% 2.1% 12.6% 13.9% 9.1%
Source: Budget 2020_2022
Actual Budgeted
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Table 36 summarizes the operating expenses for GVMID Utility (Fund 6120). On average, operating expenses have increased by 7.0% over the past 4 years. Each expense category is divided by 3 to determine how much should be allocated to the Water Utility, Sewer Utility, and GVMID storm water.

GVMID storm water expenses are not included in this study.

Table 36: GVMID Combined Utility (Fund 6120) Operating Expenses City of Brisbane
Sewer Utility Rate Study 2022
Avg Annual 2021/22 Budget
Expense (1) 2018/19 2019/20 2020/21 2021/22 Increase per Utility (2) Salaries $180,809 $179,236 $333,150 $345,879 $115,293
Percent Change -5.3% -0.9% 85.9% 3.8% 17.6%
Payroll Taxes $3,987 $2,306 $4,584 $4,769 $1,590
Percent Change 39.2% -42.2% 98.8% 4.0% 4.6%
Benefits $98,172 $95,450 $153,452 $181,974 $60,658
Percent Change 0.8% -2.8% 60.8% 18.6% 16.7%
Insurance $15,567 $16,406 $39,376 $39,521 $13,174
Percent Change -7.8% 5.4% 140.0% 0.4% 26.2%
Supplies and Services $1,105,804 $1,166,543 $1,165,054 $1,291,240 $430,413 Percent Change 41.8% 5.5% -0.1% 10.8% 4.0%
Admin Charges and Credits $303,900 $335,321 $341,554 $380,262 $126,754 Percent Change -2.0% 10.3% 1.9% 11.3% 5.8%
TOTAL GVMID UTILITY OPERATING EXPENSES $1,708,239 $1,795,263 $2,037,171 $2,243,645 $747,882 Percent Change 22.2% 5.1% 13.5% 10.1% 7.1%
Source: Budget 2020_2022
1 - Does not include expenses to "Operate a Storm Drain System" or Depreciation 2 - Budget divided by the 3 GVMID utilties (water, sewer, & storm water) Actual Budgeted
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Table 37 combines the Sewer Utility (Fund 6130) Operating Expenses from Table 35 with the GVMID Combined Utility (Fund 6120) Operating Expenses from Table 36 to determine total Sewer Utility expenses for the past 4 years.

Table 37: Sewer Utility Combined Operating Expenses
City of Brisbane
Sewer Utility Rate Study 2022
Table 38 below provides a projection of estimated costs for the next 5 years through 2027/28. Escalation factors were determined using City input. Supplies and Services which includes treatment costs is projected to increase by 10.0% each year. Salaries and Benefits are projected to increase by 4.0% each year. Insurance is increased by 5.0% per year, and Admin Charges and Credits are escalated by 3.0% each year. Overall, based on the escalation factors shown, total sewer operating expenses are projected to increase by approximately 8.0% each year.

Expense (1) 2018/19 2019/20 2020/21 2021/22
Salaries $327,511 $293,505 $433,940 $450,458
Payroll Taxes $5,391 $4,125 $5,949 $6,188
Benefits $155,219 $175,562 $209,302 $245,581
Insurance $29,905 $30,133 $51,099 $51,287
Supplies and Services $1,494,306 $1,517,413 $1,618,515 $1,918,359 Admin Charges and Credits $359,921 $401,051 $445,356 $463,781 TOTAL SEWER OPERATING EXPENSES $2,372,253 $2,421,788 $2,764,162 $3,135,654 Percent Change 20.1% 2.1% 14.1% 13.4%
Source: Budget 2020_2022
1 - Does not include Depreciation
Actual Budget
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Table 38: Sewer Utility Projection of Future Operating Expenses City of Brisbane
Sewer Utility Rate Study 2022

3.3.4 Sewer Treatment Costs
As shown on Table 39, sewer treatment costs are the largest expense for the Sewer Utility, accounting for 54.1% of total operating expenses in 2022/23.

Table 39: Sewer Treatment Processing Costs
City of Brisbane
Sewer Utility Rate Study 2022
Escalation Projected
Expense (1) 2021/22 Factor 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 Salaries $450,458 4.0% $468,000 $487,000 $506,000 $526,000 $547,000 $569,000 Payroll Taxes $6,188 4.0% $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 Benefits $245,581 4.0% $255,000 $265,000 $276,000 $287,000 $298,000 $310,000 Insurance (2) $51,287 5.0% $56,000 $59,000 $62,000 $65,000 $68,000 $71,000 Supplies and Services $1,918,359 10.0% $2,115,000 $2,327,000 $2,560,000 $2,816,000 $3,098,000 $3,408,000 Admin Charges and Credits $463,781 4.0% $482,000 $501,000 $521,000 $542,000 $564,000 $587,000 TOTAL SEWER OPERATING EXPENSES $3,135,654 $3,382,000 $3,645,000 $3,931,000 $4,242,000 $4,581,000 $4,951,000 Percent Change 13.4% 7.9% 7.8% 7.8% 7.9% 8.0% 8.1%
Source: Budget 2020_2022
1 - Does not include Depreciation
2 - Insurance anticipated to increase by 10% in 2023/23 Budget Years 1 -5: Proposition 218
Projected
2018/19 2019/20 2020/21 2021/22 2022/23
Treatment Rate per ccf $8.08 $7.36 $9.62 $11.63 $10.34
Estimated Total Sewer Flow 172,000 172,000 173,000 173,000 177,000 Total Treatment Costs $1,389,760 $1,265,920 $1,664,260 $2,011,990 $1,830,180 Total Sewer Operating Expenses $2,372,253 $2,421,788 $2,764,162 $3,135,654 $3,382,000 % of Total Treatment Costs/
Total Sewer Operating Expenses 58.6% 52.3% 60.2% 64.2% 54.1% Budget
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Figure 7 shows a history of treatment processing rates set by San Francisco. Since 2013/14, the cost for treatment has more than doubled from $5.00 per ccf to $10.34 per ccf for 2022/23. Meanwhile, the City has not increased its operational sewer rates since 2012. To be conservative, this study estimates that rates will increase by 10.0% each year during the rate study period.

Figure 7: Historical San Francisco Treatment Processing Rates City of Brisbane
Sewer Utility Rate Study 2022
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3.3.5 Sewer Net Revenues
Table 40 shows a history of the Sewer Utility’s net revenues. The Sewer Utility has been operating in a deficit in which expenses exceed revenues. The 2021/22 budget is projecting a deficit of approximately $1.2 million which means that the Sewer Fund will need to rely on reserves to cover expenses and will not meet debt coverage.

Table 40: Sewer Net Revenues
City of Brisbane
Sewer Utility Rate Study 2022
Actual Budget
2018/19 2019/20 2020/21 2021/22

SEWER REVENUES
Sewer Service Revenues $2,188,866 $2,200,000 $2,000,000 $2,000,000 Other Revenues $438,292 $217,050 $217,050 $217,000
Total $2,627,158 $2,417,050 $2,217,050 $2,217,000

SEWER EXPENSES
Operating $2,372,253 $2,421,788 $2,764,162 $3,135,654
Debt Service $312,156 $313,906 $315,156 $318,344
Subtotal $2,684,409 $2,735,695 $3,079,318 $3,453,998
TOTAL NET REVENUES ($57,251) ($318,645) ($862,268) ($1,236,998) 245
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3.3.6 Debt Service
The Sewer Utility currently has one outstanding debt obligation that is shared with the Water Utility – the 2015 Utility Revenue Bonds for $8.3 million. Total debt service for 2022/23 is $632,063. Debt service payments are split evenly between the Water Utility and Sewer Utility, see Table 41.

Table 41: 2015 Utility Revenue Bonds - Debt Service Schedule City of Brisbane
Sewer Utility Rate Study 2022
Debt Service Coverage
A chief covenant for the City to secure State loans/grants or revenue bonds/Certificates of Participation (COPs) is to maintain a specific debt service coverage ratio. A debt service coverage ratio is a financial measure of an agency’s ability to repay outstanding debt. For the 2015 Utility Revenue Bonds, the debt service coverage ratio means that annual water net revenues (gross revenues less operating and maintenance expenses) must be at least 1.25 times the combined annual debt service payments on all Fiscal Year
Ending June 30 Principal Interest Total Debt Service (1) 2016 $170,000 $247,103 $417,103
2017 $305,000 $327,763 $632,763
2018 $310,000 $318,513 $628,513
2019 $320,000 $304,313 $624,313
2020 $340,000 $287,813 $627,813
2021 $360,000 $270,313 $630,313
2022 $385,000 $251,688 $636,688
2023 $400,000 $232,063 $632,063
2024 $415,000 $211,688 $626,688
2025 $440,000 $190,313 $630,313
2026 $455,000 $167,938 $622,938
2027 $480,000 $149,363 $629,363
2028 $490,000 $134,813 $624,813
2029 $510,000 $119,175 $629,175
2030 $525,000 $102,356 $627,356
2031 $540,000 $84,713 $624,713
2032 $570,000 $65,625 $635,625
2033 $305,000 $50,313 $355,313
2034 $320,000 $39,175 $359,175
2035 $330,000 $23,063 $353,063
2036 $340,000 $6,375 $346,375
TOTALS $8,310,000 $3,584,471 $11,894,471
(1) Debt service is allocated 50% to the Water Utility and 50% to the Sewer Utility. 246
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parity obligations. Failure to meet the debt service coverage ratio on an annual basis is considered to be technical default, thereby making the revenue bonds/COPs callable or payable upon demand. Thus, rates and fees must be set to meet this legal requirement. Moreover, failing to meet debt service coverage may hinder the City’s ability to qualify for future bond funding.

3.3.7 Sewer Cash Flow Objectives
With input from City Staff, L&T developed three sewer cash flow scenarios based on the following three financial objectives. These goals are indicators of the overall fiscal health of the Sewer Utility:

1. Meet debt service coverage
a. The debt service coverage ratio for the 2015 bonds is 1.25x. b. Ratio is calculated as Net Operating Revenue/Total Debt service

2. Meet Sewer Utility reserve targets
a. Operating Reserve Target = 25.0% of annual operating costs

3. Maintain positive net revenues
a. To ensure that the Sewer Utility is covering its cost of service b. To avoid an operating deficit and dipping into reserves

3.3.8 Sewer Cash Flow Scenarios
The cash flow scenarios are as follows:
 Sewer Scenario #1: No Rate Increases
o This scenario shows what would happen if the City did not increase the sewer rates.

Without rate increases, the projections show that the Sewer Utility will continue to operate in a deficit and will not meet debt service coverage. Additionally, the Sewer Utility will draw down all of its reserves by the end of 2024/25.  Sewer Scenario #2: 8.0% Annual Rate Increases
o This scenario shows the impact to the Sewer Utility with 8.0% annual rate increases to cover operating cost inflation. With Scenario #2, the projections show that the Sewer Utility will continue to operate in a deficit and will not meet debt service coverage.

Additionally, the Sewer Utility will draw down all of its reserves by the end of 2024/25.  Sewer Scenario #3: 25.0% Annual Rate Increases
o This scenario shows the impact to the Sewer Utility with annual 25.0% annual rate increases. With Scenario #3, the Sewer Utility would meet debt service coverage by 2026/27. The Sewer Utility will likely draw down its reserves by 2024/25 but will meet its operating reserve fund targets by 2029/30.

3.3.9 Sewer Cash Flow Assumptions
The cash flows are based on the 2021/22 budget and are based on the following assumptions:
 Revenues
o Total Sewer Service Charge revenues are estimated at $2.0 million based on the 2021/22 budget.
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o Rate increases will go into effect on July 1 of each year, beginning in 2023 through 2027. o The Capital Charge is increased by $85,000 beginning in December 2022 and then $170,000 in 2023/24. The total estimated increase in the Capital Charge is estimated at $700,000 and is split evenly with the Sewer Utility.
o Interest is increased by 1% each year.
- All other revenues are increased by 3% each year.
- The Low Income Rate Assistance contribution from the General Fund remains at $75,000 per year and is divided evenly between water and sewer.
- Growth is estimated at 0.5% each year.
- Total sewer flow is based on 2020 usage and is not anticipated to increase significantly over the next 5 years.
 Expenses
- Expenses are increased based on the escalation factors from Table 38. - The only current debt obligation is the 2015 Utility Revenue Bonds. Total debt service is approximately $625,000 per year and is split evenly with the Water Utility. - Debt service coverage is estimated at 1.25x and is calculated by dividing Net Revenues by Total Debt Service.
- Assuming that the City will issue $5 million in debt to pay for capital projects in 2027/28, total debt service is projected at $300,000 and is split evenly with the Sewer Utility beginning in 2027/28.
- No capital project expenditures are included.
- Annual depreciation is not included.

3.3.10 Sewer Scenario #1: Sewer Cash Flow Projection with No Rate Increases Table 42 forecasts the financial health of the sewer utility over the next 10 years if the City does not implement any rate increases. Using 2021/22 as the base year, the cash flow for Sewer Scenario #1 shows that the Sewer Utility is currently operating in a deficit (line 40). Moreover, the sewer fund is not meeting its debt service coverage requirement (line 49) and will draw down reserves by the end of 2024/25 (line 42).

Without rate increases, the sewer fund will continue to miss coverage and operate in a deficit, having to draw down reserves to pay for expenses.
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Table 42: Sewer Scenario #1: No Rate Increases – Sewer Cash Flow Projection City of Brisbane
Sewer Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 Overall Revenue Adjustment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 14.0% 2 Rate Increase Effective Jul 1, 2023 Jul 1, 2024 Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Jul 1, 2030 Jul 1, 2031 Jul 1, 2032 3 4
5 BEGINNING FUND BALANCE $4,828,445 $3,591,447 $1,929,416 $8,072 ($950,084) ($3,464,553) ($6,320,234) ($9,040,140) ($12,314,228) ($16,026,406) ($20,215,262) ($24,932,575) 6 7 REVENUES
8 Sewer Service Charges 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,280,000 9 Investment Earnings 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000 35,000 36,000 10 Sewer Connection Fees 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 11 Account Open/Reconnections 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 12 Late Payment Charges 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 13 Capital Charge (1) 182,500 267,500 352,500 352,500 352,500 352,500 502,500 502,500 502,500 502,500 502,500 502,500 14 Transfers from Other Funds 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 15 Less: Low Income Rate Assistance (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) 16 Projected Grant Revenue 0 0 0 1,250,000 0 0 0 0 0 0 0 0 17 Total Revenues 2,217,000 2,303,500 2,389,500 3,640,500 2,391,500 2,392,500 2,543,500 2,544,500 2,545,500 2,546,500 2,547,500 2,828,500 18 19 EXPENSES
20 Operating & Maintenance
21 Salaries 450,458 468,000 487,000 506,000 526,000 547,000 569,000 592,000 616,000 641,000 667,000 694,000 22 Payroll Taxes 6,188 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 23 Benefits 245,581 255,000 265,000 276,000 287,000 298,000 310,000 322,000 335,000 348,000 362,000 376,000 24 Insurance 51,287 56,000 59,000 62,000 65,000 68,000 71,000 75,000 79,000 83,000 87,000 91,000 25 Supplies and Services 1,918,359 2,115,000 2,327,000 2,560,000 2,816,000 3,098,000 3,408,000 3,749,000 4,124,000 4,536,000 4,990,000 5,489,000 26 Admin Charges and Credit 463,781 482,000 501,000 521,000 542,000 564,000 587,000 610,000 634,000 659,000 685,000 712,000 27 Subtotal O&M 3,135,654 3,382,000 3,645,000 3,931,000 4,242,000 4,581,000 4,951,000 5,354,000 5,794,000 6,273,000 6,797,000 7,368,000 28 29 Net Operating Revenues (918,654) (1,078,500) (1,255,500) (290,500) (1,850,500) (2,188,500) (2,407,500) (2,809,500) (3,248,500) (3,726,500) (4,249,500) (4,539,500) 30 31 Debt Service
32 2015 Utility Bonds 318,344 316,031 313,344 315,156 311,469 314,681 312,406 314,588 313,678 312,356 317,813 158,906 33 New Bonds (2) 0 0 0 0 0 0 0 150,000 150,000 150,000 150,000 150,000 34 Subtotal Debt Service 318,344 316,031 313,344 315,156 311,469 314,681 312,406 464,588 463,678 462,356 467,813 308,906 35 36 Capital Projects 0 267,500 352,500 352,500 352,500 352,500 0 0 0 0 0 0 37 38 Total Expenses 3,453,998 3,965,531 4,310,844 4,598,656 4,905,969 5,248,181 5,263,406 5,818,588 6,257,678 6,735,356 7,264,813 7,676,906 39 40 Net Revenues (1,236,998) (1,662,031) (1,921,344) (958,156) (2,514,469) (2,855,681) (2,719,906) (3,274,088) (3,712,178) (4,188,856) (4,717,313) (4,848,406) 41 42 ENDING FUND BALANCE 3,591,447 1,929,416 8,072 (950,084) (3,464,553) (6,320,234) (9,040,140) (12,314,228) (16,026,406) (20,215,262) (24,932,575) (29,780,981) 43 44
45 Reserve Funds
46 Operating Reserve Target (25% of O&M) 783,900 845,500 911,300 982,800 1,060,500 1,145,300 1,237,800 1,338,500 1,448,500 1,568,300 1,699,300 1,842,000 47 Target Met? yes yes no no no no no no no no no no
48 49 Debt Service Coverage - 1.25x (3) (2.89) (3.41) (4.01) (4.89) (5.94) (6.95) (7.71) (6.05) (7.01) (8.06) (9.08) (14.70) 50 Target Met? no no no no no no no no no no no no
51 1 - Assumes Capital Charge will increase every 5 years. First increase will go into effect on Dec 1, 2022. Second increase is anticipated in 2027/28 and assumes that the City will issue $5M in new debt (combined water & sewer). 2 - Total debt service for New Bonds is estimated at $300,000 and is split evenly with the Sewer Utility. 3 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 249
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3.3.11 Sewer Scenario #2: 8% Annual Rate Increases - Cash Flow Projection Table 43 includes annual rate increases of 8.0% each year to cover operating cost inflation. With Sewer Scenario #2, the projections show that the Sewer Utility will continue to operate in a deficit (line 40) and will not meet debt service coverage (line 49). Additionally, the Sewer Utility will draw down all of its reserves by the end of 2024/25 (line 42).

Table 43: Sewer Scenario #2: 8% Annual Rate Increases – Sewer Cash Flow Projection City of Brisbane
Sewer Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 Overall Revenue Adjustment 8.0% 8.0% 8.0% 8.0% 8.0% 4.0% 4.0% 4.0% 8.0% 8.0% 2 Rate Increase Effective Jul 1, 2023 Jul 1, 2024 Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Jul 1, 2030 Jul 1, 2031 Jul 1, 2032 3 4
5 BEGINNING FUND BALANCE $4,828,445 $3,591,447 $1,929,416 $168,072 ($457,084) ($2,451,553) ($4,585,234) ($6,515,140) ($8,731,228) ($11,263,406) ($14,145,262) ($17,290,575) 6 7 REVENUES
8 Sewer Service Charges 2,000,000 2,000,000 2,160,000 2,333,000 2,520,000 2,722,000 2,940,000 3,058,000 3,180,000 3,307,000 3,572,000 3,858,000 9 Investment Earnings 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000 35,000 36,000 10 Sewer Connection Fees 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 11 Account Open/Reconnections 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 12 Late Payment Charges 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 13 Capital Charge (1) 182,500 267,500 352,500 352,500 352,500 352,500 502,500 502,500 502,500 502,500 502,500 502,500 14 Transfers from Other Funds 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 15 Less: Low Income Rate Assistance (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) 16 Projected Grant Revenue 0 0 0 1,250,000 0 0 0 0 0 0 0 0 17 Total Revenues 2,217,000 2,303,500 2,549,500 3,973,500 2,911,500 3,114,500 3,483,500 3,602,500 3,725,500 3,853,500 4,119,500 4,406,500 18 19 EXPENSES
20 Operating & Maintenance
21 Salaries 450,458 468,000 487,000 506,000 526,000 547,000 569,000 592,000 616,000 641,000 667,000 694,000 22 Payroll Taxes 6,188 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 23 Benefits 245,581 255,000 265,000 276,000 287,000 298,000 310,000 322,000 335,000 348,000 362,000 376,000 24 Insurance 51,287 56,000 59,000 62,000 65,000 68,000 71,000 75,000 79,000 83,000 87,000 91,000 25 Supplies and Services 1,918,359 2,115,000 2,327,000 2,560,000 2,816,000 3,098,000 3,408,000 3,749,000 4,124,000 4,536,000 4,990,000 5,489,000 26 Admin Charges and Credit 463,781 482,000 501,000 521,000 542,000 564,000 587,000 610,000 634,000 659,000 685,000 712,000 27 Subtotal O&M 3,135,654 3,382,000 3,645,000 3,931,000 4,242,000 4,581,000 4,951,000 5,354,000 5,794,000 6,273,000 6,797,000 7,368,000 28 29 Net Operating Revenues (918,654) (1,078,500) (1,095,500) 42,500 (1,330,500) (1,466,500) (1,467,500) (1,751,500) (2,068,500) (2,419,500) (2,677,500) (2,961,500) 30 31 Debt Service
32 2015 Utility Bonds 318,344 316,031 313,344 315,156 311,469 314,681 312,406 314,588 313,678 312,356 317,813 158,906 33 New Bonds (2) 0 0 0 0 0 0 150,000 150,000 150,000 150,000 150,000 150,000 34 Subtotal Debt Service 318,344 316,031 313,344 315,156 311,469 314,681 462,406 464,588 463,678 462,356 467,813 308,906 35 36 Capital Projects 0 267,500 352,500 352,500 352,500 352,500 0 0 0 0 0 0 37 38 Total Expenses 3,453,998 3,965,531 4,310,844 4,598,656 4,905,969 5,248,181 5,413,406 5,818,588 6,257,678 6,735,356 7,264,813 7,676,906 39 40 Net Revenues (1,236,998) (1,662,031) (1,761,344) (625,156) (1,994,469) (2,133,681) (1,929,906) (2,216,088) (2,532,178) (2,881,856) (3,145,313) (3,270,406) 41 42 ENDING FUND BALANCE 3,591,447 1,929,416 168,072 (457,084) (2,451,553) (4,585,234) (6,515,140) (8,731,228) (11,263,406) (14,145,262) (17,290,575) (20,560,981) 43 44
45 Reserve Funds
46 Operating Reserve Target (25% of O&M) 783,900 845,500 911,300 982,800 1,060,500 1,145,300 1,237,800 1,338,500 1,448,500 1,568,300 1,699,300 1,842,000 47 Target Met? yes yes no no no no no no no no no no
48 49 Debt Service Coverage - 1.25x (3) (2.89) (3.41) (3.50) (3.83) (4.27) (4.66) (3.17) (3.77) (4.46) (5.23) (5.72) (9.59) 50 Target Met? no no no no no no no no no no no no
51 1 - Assumes Capital Charge will increase every 5 years. First increase will go into effect on Dec 1, 2022. Second increase is anticipated in 2027/28 and assumes that the City will issue $5M in new debt (combined water & sewer). 2 - Total debt service for New Bonds is estimated at $300,000 and is split evenly with the Sewer Utility. 3 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 250
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3.3.12 Sewer Scenario #3: 25% Annual Rate Increases – Cash Flow Projection Sewer Scenario #3 includes 25.0% annual rate increases. With Sewer Scenario #3, the Sewer Utility would meet debt service coverage by 2026/27 (line 49) and would be out of the operating deficit by 2026/27 (line 42). The Sewer Utility will likely draw down its reserves by 2024/25 but will meet its operating reserve fund targets by 2029/30 (line 46).

Table 44: Sewer Scenario #3: 25% Annual Rate Increases – Sewer Cash Flow Projection City of Brisbane
Sewer Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 Overall Revenue Adjustment 25.0% 25.0% 25.0% 25.0% 25.0% 4.0% 4.0% 4.0% 4.0% 4.0% 2 Rate Increase Effective Jul 1, 2023 Jul 1, 2024 Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Jul 1, 2030 Jul 1, 2031 Jul 1, 2032 3 4
5 BEGINNING FUND BALANCE $4,828,445 $3,591,447 $1,929,416 $508,072 ($575,084) ($1,183,553) ($1,156,234) $77,860 $1,151,772 $2,041,594 $2,718,738 $3,142,425 6 7 REVENUES
8 Sewer Service Charges 2,000,000 2,000,000 2,500,000 3,125,000 3,906,000 4,883,000 6,104,000 6,348,000 6,602,000 6,866,000 7,141,000 7,427,000 9 Investment Earnings 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000 35,000 36,000 10 Sewer Connection Fees 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 11 Account Open/Reconnections 1,500 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 12 Late Payment Charges 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 13 Capital Charge (1) 182,500 267,500 352,500 352,500 352,500 352,500 502,500 502,500 502,500 502,500 502,500 502,500 14 Transfers from Other Funds 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 37,500 15 Less: Low Income Rate Assistance (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) (37,500) 16 Projected Grant Revenue 0 0 0 0 0 0 0 0 0 0 0 0
17 Total Revenues 2,217,000 2,303,500 2,889,500 3,515,500 4,297,500 5,275,500 6,647,500 6,892,500 7,147,500 7,412,500 7,688,500 7,975,500 18 19 EXPENSES
20 Operating & Maintenance
21 Salaries 450,458 468,000 487,000 506,000 526,000 547,000 569,000 592,000 616,000 641,000 667,000 694,000 22 Payroll Taxes 6,188 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 23 Benefits 245,581 255,000 265,000 276,000 287,000 298,000 310,000 322,000 335,000 348,000 362,000 376,000 24 Insurance 51,287 56,000 59,000 62,000 65,000 68,000 71,000 75,000 79,000 83,000 87,000 91,000 25 Supplies and Services 1,918,359 2,115,000 2,327,000 2,560,000 2,816,000 3,098,000 3,408,000 3,749,000 4,124,000 4,536,000 4,990,000 5,489,000 26 Admin Charges and Credit 463,781 482,000 501,000 521,000 542,000 564,000 587,000 610,000 634,000 659,000 685,000 712,000 27 Subtotal O&M 3,135,654 3,382,000 3,645,000 3,931,000 4,242,000 4,581,000 4,951,000 5,354,000 5,794,000 6,273,000 6,797,000 7,368,000 28 29 Net Operating Revenues (918,654) (1,078,500) (755,500) (415,500) 55,500 694,500 1,696,500 1,538,500 1,353,500 1,139,500 891,500 607,500 30 31 Debt Service
32 2015 Utility Bonds 318,344 316,031 313,344 315,156 311,469 314,681 312,406 314,588 313,678 312,356 317,813 158,906 33 New Bonds (2) 0 0 0 0 0 0 150,000 150,000 150,000 150,000 150,000 150,000 34 Subtotal Debt Service 318,344 316,031 313,344 315,156 311,469 314,681 462,406 464,588 463,678 462,356 467,813 308,906 35 36 Capital Projects 0 267,500 352,500 352,500 352,500 352,500 0 0 0 0 0 0 37 38 Total Expenses 3,453,998 3,965,531 4,310,844 4,598,656 4,905,969 5,248,181 5,413,406 5,818,588 6,257,678 6,735,356 7,264,813 7,676,906 39 40 Net Revenues (1,236,998) (1,662,031) (1,421,344) (1,083,156) (608,469) 27,319 1,234,094 1,073,913 889,822 677,144 423,688 298,594 41 42 ENDING FUND BALANCE 3,591,447 1,929,416 508,072 (575,084) (1,183,553) (1,156,234) 77,860 1,151,772 2,041,594 2,718,738 3,142,425 3,441,019 43 44
45 Reserve Funds
46 Operating Reserve Target (25% of O&M) 783,900 845,500 911,300 982,800 1,060,500 1,145,300 1,237,800 1,338,500 1,448,500 1,568,300 1,699,300 1,842,000 47 Target Met? yes yes no no no no no no yes yes yes yes 48 49 Debt Service Coverage - 1.25x (3) (2.89) (3.41) (2.41) (1.32) 0.18 2.21 3.67 3.31 2.92 2.46 1.91 1.97 50 Target Met? no no no no no yes yes yes yes yes yes yes 51 1 - Assumes Capital Charge will increase every 5 years. First increase will go into effect on Dec 1, 2022. Second increase is anticipated in 2027/28 and assumes that the City will issue $5M in new debt (combined water & sewer). 2 - Total debt service for New Bonds is estimated at $300,000 and is split evenly with the Sewer Utility. 3 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 251
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3.3.13 Sewer Scenario Comparison
Table 45 includes a summary of the proposed rate adjustments and the three financial goals for all three scenarios. Based on the proposed rate adjustments, only Sewer Scenario #3: 25% Annual Rate Increases would allow the Sewer Utility to meet its debt service coverage ratio and have positive net revenues by 2027/28.

Table 45: Sewer Scenario Comparison
City of Brisbane
Sewer Utility Rate Study 2022
GOAL 1 : MEET DEBT SERVICE COVERAGE
Projected
2022/23 2023/24 2024/25 2025/26 2026/27 2027/28
Debt Service Coverage Ratio Required 1.25 1.25 1.25 1.25 1.25 1.25 Scenario 1: No Rate Increases (3.41) (4.01) (4.89) (5.94) (6.95) (7.71) Target Met? no no no no no no
Scenario 2: 8% Annual Rate Increases (3.41) (3.50) (3.83) (4.27) (4.66) (3.17) Target Met? no no no no no no
Scenario 3: 25% Annual Rate Increases (3.41) (2.41) (1.32) 0.18 2.21 3.67 Target Met? no no no no yes yes
GOAL 2: MEET SEWER RESERVE FUND TARGET
Projected
2022/23 2023/24 2024/25 2025/26 2026/27 2027/28
Sewer Fund Reserve Target $783,900 $845,500 $911,300 $982,800 $1,060,500 $1,145,300 Scenario 1: No Rate Increases $1,929,416 $8,072 ($950,084) ($3,464,553) ($6,320,234) ($9,040,140) Target Met? no no no no no no
Scenario 2: 8% Annual Rate Increases $1,929,416 $168,072 ($457,084) ($2,451,553) ($4,585,234) ($6,515,140) Target Met? no no no no no no
Scenario 3: 25% Annual Rate Increases $1,929,416 $508,072 ($575,084) ($1,183,553) ($1,156,234) $77,860 Target Met? no no no no no no
GOAL 3: POSITIVE TOTAL NET REVENUES
Projected
2022/23 2023/24 2024/25 2025/26 2026/27 2027/28
Scenario 1: No Rate Increases ($1,662,031) ($1,921,344) ($958,156) ($2,514,469) ($2,855,681) ($2,719,906) Target Met? no no no no no no
Scenario 2: 8% Annual Rate Increases ($1,662,031) ($1,761,344) ($625,156) ($1,994,469) ($2,133,681) ($1,929,906) Target Met? no no no no no no
Scenario 3: 25% Annual Rate Increases ($1,662,031) ($1,421,344) ($1,083,156) ($608,469) $27,319 $1,234,094 Target Met? no no no no yes yes
Proposed
Proposed
Proposed
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Figure 8 graphically shows the projected total ending reserve fund balance under each scenario. The red dotted line represents the total reserve fund target. The purple line represents Sewer Scenario #1: No Rate Increases. The green line represents Sewer Scenario #2: 8.0% Annual Rate Increases. The yellow line represents Sewer Scenario #3: 25.0% Annual Rate Increases. It is projected that the Sewer Utility will reverse the operating deficit by the end of 2027/28 with Sewer Scenario #3.

Figure 8: Sewer Scenario Comparison - Ending Water Fund Reserve Fund Balance City of Brisbane
Sewer Utility Rate Study 2022
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3.4 Sewer Cost Allocation
The revenue requirements detailed in the previous section determine the amount of revenue to be recovered from sewer rates. The cost of service allocation determines how revenues will be recovered from customers based on their estimated impact on the sewer system. Proposition 218 requires that agencies providing “property-related services” (including sewer service) set rates and charges that are based on the cost of providing those services.

3.4.1 Overview of Sewer Cost Allocation Methodology
The determination of the sewer flows, sewer loadings, and the revenue requirements of the Sewer Utility provide the basis for performing the cost of service analysis. The concept of proportionate allocation to each customer class indicates that allocations should take into consideration the quantity of effluent a customer contributes in addition to the strength of sewer.

The key factors used to assign sewer utility costs are estimated effluent (flow) going to the wastewater treatment plant and effluent strengths, measured in biochemical oxygen demand (BOD) and total suspended solids (TSS). Higher levels of BOD or TSS typically equate to increased treatment costs. The total revenue requirement shown in the sewer cash flow projections is the net cost of providing service and is allocated to the flow, BOD, and TSS parameters. These allocations are then used as the basis to develop unit rates for the sewer parameters and to assign costs to each customer class in proportion to the sewer services rendered.

Using the 2021/22 budget as the base year, sewer expenses are allocated to the following categories (a) Base, (b) Flow, and (c) Strength which is typically measured in biochemical oxygen demand (BOD) and total suspended solids (TSS).
 Base Costs: Base costs represent the fixed expenditures of the sewer utility, including personnel costs and overhead expenses. These fixed costs are allocated based on the total number of sewer accounts or meters.
 Flow Costs: Volume- or flow-related costs that vary with the total quantity of wastewater collected. Because most agencies do not meter wastewater discharges, metered water consumption is used to estimate contributed average wastewater volume units of service.  Strength Costs: Strength-related costs are those expenditures associated with the additional handling and treatment of high strength sewer. Sewer strength is typically measured in BOD and TSS. Increased levels of BOD or TSS typically equate to increased treatment costs. 254
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3.4.2 Current Sewer Service Revenues – Fixed vs Variable Revenue Recovery Table 46 summarizes the percentages of Sewer Service Revenues currently derived from the Fixed Charges vs. Variable Charges. On average, the City collects roughly 40.0% of total Sewer Service Revenues from the Fixed Charge and 60.0% from the Variable Charges. Based on input from staff, the City would like to transition to a 30% fixed / 70% variable revenue recovery because the largest expense for the Sewer Utility is treatment costs which vary each year based on the rates set by the City of San Francisco.

Table 46: Current Sewer Service Revenues – Fixed vs. Variable Revenue Recovery City of Brisbane
Sewer Utility Rate Study 2022
Fixed
Charges
Variable
Charges
Total Sewer
Service
Charge
Revenues % of Total
Total Revenues City vs. GVMID
City $506,195 $706,101 $1,212,295 59.8%
GVMID $286,361 $526,929 $813,290 40.2%
Total Sewer Service Charge Revenues $792,556 $1,233,030 $2,025,585 100.0% % of Total 39.1% 60.9% 100.0%
Total Revenues by Customer Class
Residential $689,664 $407,878 $1,097,542 54.2%
Commercial
Standard $88,842 $295,333 $384,175 19.0%
Medium $3,306 $34,017 $37,323 1.8%
Heavy $10,744 $495,801 $506,545 25.0%
Subtotal Commercial $102,892 $825,151 $928,043 45.8%
Total Sewer Service Charge Revenues $792,556 $1,233,030 $2,025,585 100% % of Total 39.1% 60.9% 100.0%
Source: Utility Billing Data 2018-2020 Water & sewer Export 255
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3.4.3 Cost Allocation
Table 47 summarizes the cost allocation for a 30.0% fixed / 70.0% variable revenue recovery. These allocations are then used as the basis to develop unit rates for each charge.

Table 47: Sewer Cost Allocation – 30% Fixed/70% Variable City of Brisbane
Sewer Utility Rate Study 2022

3.5 Sewer Rate Design
The cost of service analysis calculated the revenue requirements for each customer class. The next step is rate design which determines how those revenue requirements are collected from each class based on their estimated impact on the sewer system.

The proposed sewer rate structure is as follows:
 Fixed Charges
o All customer classes will continue to pay the same bimonthly flat charge.  Variable Charges
o Eliminate tiered rates for all customers and transition to single tier based on customer strength. Tiers are typically utilized for water rates to encourage conservation and are less relevant to sewer flow.
o Residential customers will continue to only be charged for winter water use (October through January) while commercial customers will be charged for all consumption.

FY2022/23
Expenses Budget Base Flow BOD TSS Total Base Flow BOD TSS Total Operating Expenses
Salaries $468,000 30% 23% 23% 23% 100% $140,400 $109,200 $109,200 $109,200 $468,000 Payroll Taxes $6,000 30% 23% 23% 23% 100% $1,800 $1,400 $1,400 $1,400 $6,000 Benefits $255,000 30% 23% 23% 23% 100% $76,500 $59,500 $59,500 $59,500 $255,000 Insurance $56,000 30% 23% 23% 23% 100% $16,800 $13,067 $13,067 $13,067 $56,000 Supplies and Services $2,115,000 30% 23% 23% 23% 100% $634,500 $493,500 $493,500 $493,500 $2,115,000 Admin Charges and Credit $482,000 30% 23% 23% 23% 100% $144,600 $112,467 $112,467 $112,467 $482,000 Subtotal Operating Expenses $3,382,000 $1,014,600 $789,133 $789,133 $789,133 $3,382,000 Debt Service
2015 Utility Bonds $316,031 30% 23% 23% 23% 100% $94,809 $73,741 $73,741 $73,741 $316,031 New Bonds $0 30% 23% 23% 23% 100% $0 $0 $0 $0 $0
Subtotal Debt Service $316,031 $94,809 $73,741 $73,741 $73,741 $316,031 Total Allocation $3,698,031 30.0% 23.3% 23.3% 23.3% 100.0% $1,109,409 $862,874 $862,874 $862,874 $3,698,031 Cost Allocation - % Cost Allocation - $
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3.5.1 Sewer Flow and Loadings
Table 48 summarizes the flow and strength characteristics by customer class. Sewer flow is based on the City’s 2019/20 billing data. The strength factors and sewer loadings are based on the guidelines from the State Water Resources Control Council (SWRCB) Revenue Program and standards utilized by other wastewater agencies.

Table 48: Sewer Flow and Loadings
City of Brisbane
Sewer Utility Rate Study 2022

3.5.2 Projected Sewer Accounts & Sewer Flow
Table 49 shows a projection of sewer accounts, flow, and loadings for the rate study period through 2027/28. Growth is estimated at 0.5% each year while sewer flow is anticipated to increase by 2.0% annually beginning in 2022/23.

Customer Class Accounts Flow (ccf) (1) Flow (MG) Strength (mg/l) Loadings (lbs) Strength (mg/l) Loadings (lbs) Residential 1,669 89,719 67.1 165 92,350 165 92,350
Standard Commercial 208 37,290 27.9 200 46,525 200 46,525 Medium Commercial 6 4,261 3.2 300 7,974 300 7,974
Heavy Commercial 28 41,651 31.2 400 103,933 400 103,933 Total 1,911 172,921 129.3 250,783 250,783
1 - Based on 2019/20 billing data

BASE FLOW BOD TSS
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Table 49: Projected Growth, Sewer Flow, and Loadings
City of Brisbane
Sewer Utility Rate Study 2022

3.6 Sewer Rate Design for Scenario #3

3.6.1 Scenario #3: Sewer Rate Derivation
Table 50 details the rate derivation for the Fixed Charge for Sewer Scenario #3 based on a 30.0% fixed /

70.0% variable revenue recovery. For the rate study period, the “Fixed Charge Revenue Requirement” for each year is divided by the “Total Number of Accounts” to derive a “Bimonthly Fixed Charge per Account.” The proposed 2023/24 Fixed Charge is $64.20, representing a $4.67 (or 6.8%) decrease from the current Fixed Charge of $68.87.

Actual
2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28

NUMBER OF ACCOUNTS
Increase % 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Residential 1,669 1,677 1,686 1,694 1,703 1,711 1,720 1,728 1,737 Standard Commercial 215 216 217 218 219 220 222 223 224 Medium Commercial 8 8 8 8 8 8 8 8 8
Heavy Commercial 26 26 26 26 27 27 27 27 27
Total Sewer Accounts 1,918 1,928 1,937 1,947 1,957 1,966 1,976 1,986 1,996 SEWER FLOW (ccf)
Increase % 0.00% 0.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Residential 89,719 90,000 90,000 92,000 94,000 96,000 98,000 100,000 102,000 Standard Commercial 37,290 37,000 37,000 38,000 39,000 40,000 41,000 42,000 43,000 Medium Commercial 4,261 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 Heavy Commercial 41,651 42,000 42,000 43,000 44,000 45,000 46,000 47,000 48,000 Total Estimated Flow (ccf) 172,921 173,000 173,000 177,000 181,000 185,000 189,000 193,000 197,000 SEWER LOADINGS (mg/l)
Increase % 0.00% 0.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Residential 92,350 92,000 92,000 94,000 96,000 98,000 100,000 102,000 104,000 Standard Commercial 46,525 47,000 47,000 48,000 49,000 50,000 51,000 52,000 53,000 Medium Commercial 7,974 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Heavy Commercial 103,933 104,000 104,000 106,000 108,000 110,000 112,000 114,000 116,000 Total Estimated Loadings 250,783 251,000 251,000 256,000 261,000 266,000 271,000 276,000 281,000

PROJECTED PROJECTED - RATE STUDY PERIOD
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The rates have been calculated to increase total Sewer Service Revenues by 25.0% each year. However, for 2023/24, the proposed revenue adjustments in the cash flow do not directly correlate to the same increase in rates because of the shift to a 30% fixed/70% variable revenue recovery.

Table 50: Sewer Flat Charge Rate Derivation
City of Brisbane
Sewer Utility Rate Study 2022

PROJECTED - RATE STUDY PERIOD
Current 2023/24 2024/25 2025/26 2026/27 2027/28
TOTAL REVENUE REQUIREMENT (1) $2,500,000 $3,125,000 $3,906,000 $4,883,000 $6,104,000 Fixed/Variable Allocation
Fixed Charge 30.0% 30.0% 30.0% 30.0% 30.0%
Variable Charge 70.0% 70.0% 70.0% 70.0% 70.0%

FIXED SERVICE CHARGE

CALCULATION
Fixed Revenue Requirement $750,000 $937,500 $1,171,800 $1,464,900 $1,831,200 Total Number of Accounts 1,918 1,947 1,957 1,966 1,976 1,986 Bimonthly Flat Charge per Account $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 % Change -6.8% 24.4% 24.4% 24.4% 24.4%
1 – Table 44, Line 5

3.6.2 Sewer Scenario #3: Variable Rate Derivation
Table 51 demonstrates how the Variable Charge for 2023/24 is calculated for Sewer Scenario #3 based on a 30.0% fixed / 70.0% variable revenue recovery. The total “Variable Charge Recovery $” is first apportioned to flow, BOD and TSS (50.0% to Flow, 25.0 % to BOD, and.25.0% to SS). The City of San Francisco currently does not charge based on effluent strength but may do so in the future. Therefore, costs are evenly split between flow costs and strength costs. Next, the “Cost Allocation $” for each parameter is then divided by its “Total Annual Loadings” (Table 49) to derive unit costs. The unit costs for the remaining years in the study period are derived in the same manner, and the tables are included in the appendix.
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Table 51: Sewer Scenario #3 - Sewer Variable Unit Rate Derivation for 2023/24 City of Brisbane
Sewer Utility Rate Study 2022
Allocation to Variable Charges
FY2023/24 Revenue Requirement (1) $2,500,000
Variable Charge Recovery % 70%
Variable Charge Recovery $ $1,750,000
Allocation to Flow, BOD, SS Flow BOD SS
Cost Allocation % 50% 25% 25%
Cost Allocation $ $875,000 $438,000 $438,000
Total Annual Loadings 181,000 261,000 261,000
Units ccf lbs lbs
Unit Cost $4.83 $1.68 $1.68
per ccf per lb per lb
1 - Table 44, Line 10
3 - Table 49
The unit rates from Table 51 are multiplied by each customer class’s respective loadings to determine a “Total Variable Rate per ccf” for each customer class, see Table 52. The Variable Rate is the sum of the flow, BOD, and TSS unit costs. For Residential customers, the proposed “Total Variable Rate” for 2023/24 is $8.29 per ccf. The Variable Rates for the remaining years in the study period are derived in the same manner and the tables are included in the appendix.

Table 52: Sewer Scenario #3 - Volume Rate by Customer Classes for 2023/24 City of Brisbane
Sewer Utility Rate Study 2022
1 - Table 51
Total
Flow BOD SS Variable Rate
Customer Class BOD SS $4.83 $1.68 $1.68 per ccf
Residential 165 165 $4.83 $1.73 $1.73 $8.29
Standard Commercial 200 200 $4.83 $2.09 $2.09 $9.02
Medium Commercial 300 300 $4.83 $3.14 $3.14 $11.12
Heavy Commercial 400 400 $4.83 $4.19 $4.19 $13.21
Strength (mg/l)
Wastewater Unit Rates ($ per ccf or lb) (1)
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3.6.3 Sewer Scenario #3: Proposed Bimonthly Sewer Rates Table 53 summarizes the proposed bimonthly sewer rates. The proposed Flat Charges are the same for all customers. The proposed Variable Charges include different charges for Residential and Commercial customers.

Table 53: Proposed Bi-Monthly Sewer Rates
City of Brisbane
Sewer Utility Rate Study 2022

3.6.4 Sewer Scenario #3: Sewer Bill Impacts
Table 54 includes a sample of bill impacts for residential and commercial customers. For 2023/24, the proposed revenue adjustments in the cash flow do not directly correlate to the same increase in rates because the cost of service analysis reallocates the required revenue proportionate to each customer class’s total flow. Therefore, actual bill impacts will vary based on customer class and consumption.

July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 July 1, 2027 RESIDENTIAL (1)
Flat Charge $64.20 $79.86 $99.32 $123.54 $153.66
Variable Charge (per ccf) (2) $8.29 $10.15 $12.43 $15.23 $18.67

COMMERCIAL
Standard
Flat Charge $64.20 $79.86 $99.32 $123.54 $153.66
Variable Charge (per ccf) $9.02 $11.04 $13.53 $16.59 $20.33 Medium
Flat Charge $64.20 $79.86 $99.32 $123.54 $153.66
Variable Charge (per ccf) $11.12 $13.61 $16.68 $20.45 $25.07 Heavy
Flat Charge $64.20 $79.86 $99.32 $123.54 $153.66
Variable Charge (per ccf) $13.21 $16.18 $19.83 $24.32 $29.81 1 - Residential bill is based on winter consumption (Oct, Nov, Dec & Jan) 2 - 1 ccf (hundred cubic feet) = 748 gallons

RATE STUDY PERIOD
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Table 54: Sewer Scenario #3 – Sample Bimonthly Sewer Bills City of Brisbane
Sewer Utility Rate Study 2022

RESIDENTIAL BILL IMPACTS
Bimonthly Current
Use (ccf) Bill July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 July 1, 2027 Residential - 4 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 4 $11.24
Tier 2: Over 8 ccf 0 $0.00
Subtotal Variable Charge 4 $11.24
Total Bimonthly Sewer Bill $80.11 $97.36 $120.45 $149.04 $184.47 $228.33 $ Change $17.25 $23.09 $28.59 $35.43 $43.86
% Change 21.5% 23.7% 23.7% 23.8% 23.8%
Residential - 10 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $22.48
Tier 2: Over 8 ccf 2 $15.32
Subtotal Variable Charge 10 $37.80
Total Bimonthly Sewer Bill $106.67 $147.09 $181.33 $223.61 $275.86 $340.33 $ Change $40.42 $34.24 $42.28 $52.25 $64.47
% Change 37.9% 23.3% 23.3% 23.4% 23.4%
Residential - 20 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $22.48
Tier 2: Over 8 ccf 12 $91.92
Subtotal Variable Charge 20 $114.40
Total Bimonthly Sewer Bill $183.27 $229.98 $282.80 $347.90 $428.18 $527.00 $ Change $46.71 $52.82 $65.10 $80.29 $98.81
% Change 25.5% 23.0% 23.0% 23.1% 23.1%
Proposed
$82.89 $101.47 $124.29 $152.32 $186.67
$33.16 $40.59 $49.72 $60.93 $74.67
$165.78 $202.94 $248.58 $304.64 $373.34
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STANDARD COMMERCIAL
Bimonthly Current
Use (ccf) Bill Jan 1, 2023 July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 Standard Commercial - 10 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $30.72
Tier 2: Over 8 ccf 2 $15.32
Subtotal Variable Charge 10 $46.04
Total Bimonthly Sewer Bill $114.91 $154.42 $190.31 $234.63 $289.39 $356.93 $ Change $39.51 $35.89 $44.32 $54.76 $67.54
% Change 34.4% 23.2% 23.3% 23.3% 23.3%
Standard Commercial - 20 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $30.72
Tier 2: Over 8 ccf 12 $91.92
Subtotal Variable Charge 20 $122.64
Total Bimonthly Sewer Bill $191.51 $244.64 $300.76 $369.94 $455.24 $560.19 $ Change $53.13 $56.12 $69.18 $85.30 $104.95
% Change 27.7% 22.9% 23.0% 23.1% 23.1%
Proposed
$90.22 $110.45 $135.31 $165.85 $203.27
$180.44 $220.90 $270.62 $331.70 $406.53

MEDIUM COMMERCIAL
Bimonthly Current
Use (ccf) Bill Jan 1, 2023 July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 Medium Commercial - 30 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $45.44
Tier 2: Over 8 ccf 22 $214.28
Subtotal Variable Charge 30 $259.72
Total Bimonthly Sewer Bill $328.59 $397.67 $488.18 $599.72 $737.04 $905.72 $ Change $69.08 $90.51 $111.54 $137.32 $168.68
% Change 21.0% 22.8% 22.8% 22.9% 22.9%
Medium Commercial - 50 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $45.44
Tier 2: Over 8 ccf 42 $409.08
Subtotal Variable Charge 50 $454.52
Total Bimonthly Sewer Bill $523.39 $619.98 $760.39 $933.32 $1,146.04 $1,407.09 $ Change $96.59 $140.41 $172.93 $212.72 $261.05
% Change 18.5% 22.6% 22.7% 22.8% 22.8%
Proposed
$333.47 $408.32 $500.40 $613.50 $752.06
$555.78 $680.53 $834.00 $1,022.50 $1,253.43
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HEAVY COMMERCIAL
Bimonthly Current
Use (ccf) Bill Jan 1, 2023 July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 Heavy Commercial - 80 ccf
$68.87 $64.20 $79.86 $99.32 $123.54 $153.66
Variable Charge
Tier 1: 0 - 8 ccf 8 $60.72
Tier 2: Over 8 ccf 72 $848.51
Subtotal Variable Charge 80 $909.23
Total Bimonthly Sewer Bill $978.10 $1,120.95 $1,373.96 $1,685.65 $2,068.75 $2,538.51 $ Change $142.85 $253.01 $311.69 $383.10 $469.77
% Change 14.6% 22.6% 22.7% 22.7% 22.7%
Heavy Commercial - 100 ccf
Fixed Charge $68.87 $64.20 $79.86 $99.32 $123.54 $153.66 Variable Charge
Tier 1: 0 - 8 ccf 8 $60.72
Tier 2: Over 8 ccf 92 $1,084.91
Subtotal Variable Charge 100 $1,145.63
Total Bimonthly Sewer Bill $1,214.50 $1,385.14 $1,697.49 $2,082.23 $2,555.05 $3,134.73 $ Change $170.64 $312.35 $384.75 $472.82 $579.68
% Change 14.1% 22.5% 22.7% 22.7% 22.7%
Proposed
$1,056.75 $1,294.10 $1,586.33 $1,945.21 $2,384.85
$1,320.94 $1,617.63 $1,982.91 $2,431.51 $2,981.07
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Figure 9 shows the proposed bimonthly sewer bill for a typical residential customer using 10 ccf per 2- month period during each year of the five-year Proposition 218 period.

Figure 9: Comparison of Bimonthly Sewer Bill for Typical Residential Customer City of Brisbane
Sewer Utility Rate Study 2022
* Does not include Capital Charge $106.67
$147.09
$181.33
$223.61
$275.86
$340.33
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
Current 2023/24 2024/25 2025/26 2026/27 2027/28
Comparison of Bimonthly Sewer Bill for
Typical Residential Customer (10 ccf)*
Proposed
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3.6.5 Regional Sewer Bill Survey
Figure 10 compares the City’s current typical bimonthly residential sewer bill using 10 ccf over a 2- month period with those of surrounding agencies. The chart also includes the proposed 2023/24 bill which includes half of the Capital Projects Charge that is evenly split with the Water Bill ($70/2 = $35). It should be noted that many of the agencies shown on the chart will likely also be increasing their sewer rates over the next few years.

Figure 10: Bimonthly Sewer Bill Survey
City of Brisbane
Sewer Utility Rate Study 2022

3.7 Sewer Low Income Discount
To comply with Proposition 218’s cost of service requirements, rate revenues from one group of customers cannot be used to subsidize the rates of another group. Instead, the City could utilize nonrate revenues, such as General Fund revenues, interest earnings, or delinquent penalties to fund a low income discount program. Moreover, to eliminate the administrative burden of the City developing its own low-income criteria, it is recommended that the City provide assistance to low income residents who meet the criteria of other local assistance programs such as PG&E’s CARE program. 266
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The low income discount program should be reviewed annually by the City to determine whether the Sewer Utility has adequate non-rate revenues to fund the program. Because non-sewer rate revenues will be used to pay for the discount, the amount of the low income discount is based on the discretion of the City.

Table 55 calculates a sample low income discount for sewer that is funded from a General Fund transfer.

This transfer is estimated at $37,500 for the current year. The City estimates that approximately 400 customers or about 24.0% of all accounts could qualify for a discount based on the PG&E’s CARE program requirements. Based on 400 customers, the table shows a bimonthly discount of $15.60 per customer. For an average residential customer (10 ccf bimonthly use), this equates to a 10.6% discount off the proposed bimonthly bill for July 1, 2023.

Table 55: Sewer Low Income Discount
City of Brisbane
Sewer Utility Rate Study 2022
Total Number of Residential Sewer Customers 1,669
Estimated Number of Customers Eligible for Discount 400 Total Est. Sewer Low Income Discount Revenue $37,500
Annual Discount per Customer $93.80
Bimonthly Discount per Customer $15.60
Proposed Average Sewer Bill for July 1, 2023 $147.09
Proposed Average Sewer Bill with Discount for July 1, 2023 $131.49 % of Discount 10.6%
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SECTION 4: UTILITY FUND 540 – COMBINED CASH FLOW

4.1 Combined Cash Flow Projection
Table 56 includes a combined Water Utility and Sewer Utility cash flow. The proposed rate increases will rectify the current operating deficit and restore financial stability to Utility Fund 540. With the proposed 9% annual water rate increases and 25% annual sewer rate increases, Fund 540 will meet debt service coverage by 2026/27. Fund 540 is projected to obtain positive net revenues by 2027/28 and will meet its fund reserve targets by 2028/29.
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Table 56: Combined Water and Sewer Cash Flow Projection City of Brisbane
Water and Sewer Utility Rate Study 2022
Budget Projected
2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 1 BEGINNING FUND BALANCE $7,656,890 $6,575,087 $4,573,056 $2,853,712 $1,513,556 $699,087 $569,406 $1,959,999 $3,202,412 $4,275,734 $5,147,377 $5,764,565 2 3 REVENUES
4 Water Sales 3,000,000 3,000,000 3,270,000 3,564,000 3,885,000 4,235,000 4,616,000 4,985,000 5,384,000 5,815,000 6,280,000 6,782,000 5 Sewer Service Charges 2,000,000 2,000,000 2,500,000 3,125,000 3,906,000 4,883,000 6,104,000 6,348,000 6,602,000 6,866,000 7,141,000 7,427,000 6 Drought Reserve Charge 100,000 100,000 100,000 100,000 100,000 100,000 0 0 0 0 0 0 7 Capital Charge 365,000 535,000 705,000 705,000 705,000 705,000 1,005,000 1,005,000 1,005,000 1,005,000 1,005,000 1,005,000 8 Investment Earnings 50,000 51,000 52,000 53,000 54,000 55,000 56,000 57,000 58,000 59,000 60,000 61,000 9 Account Open/Reconnection Fees 3,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 10 Late Payment Charges 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 11 Sewer & Meter Connection Fees 23,000 23,000 25,000 27,000 29,000 31,000 34,000 36,000 39,000 42,000 45,000 48,000 12 Fire Service Charges 115,000 115,000 125,000 136,000 148,000 161,000 175,000 189,000 204,000 220,000 238,000 257,000 13 Altamar Meter Reading Fee 7,500 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 14 Transfers from Other Funds 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 15 Less: Low Income Rate Assistance (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) 16 Grant Revenue 0 0 0 0 0 0 0 0 0 0 0 0
17 Total Revenues 5,673,500 5,846,000 6,800,000 7,734,000 8,852,000 10,196,000 12,017,000 12,648,000 13,321,000 14,037,000 14,800,000 15,612,000 18 19 EXPENSES
20 Operating & Maintenance
21 Salaries 949,583 987,000 1,027,000 1,068,000 1,110,000 1,154,000 1,200,000 1,248,000 1,298,000 1,350,000 1,404,000 1,460,000 22 Payroll Taxes 13,300 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 13,000 23 Benefits 523,326 544,000 566,000 589,000 613,000 637,000 663,000 689,000 717,000 745,000 775,000 806,000 24 Insurance 110,225 121,000 127,000 133,000 140,000 147,000 154,000 162,000 170,000 179,000 188,000 197,000 25 Supplies and Services 3,585,356 4,047,000 4,452,000 4,898,000 5,388,000 5,927,000 6,520,000 7,172,000 7,889,000 8,678,000 9,546,000 10,501,000 26 Admin Charges and Credit 936,825 969,000 1,003,000 1,038,000 1,075,000 1,113,000 1,152,000 1,192,000 1,233,000 1,276,000 1,321,000 1,367,000 27 Subtotal O&M 6,118,616 6,681,000 7,188,000 7,739,000 8,339,000 8,991,000 9,702,000 10,476,000 11,320,000 12,241,000 13,247,000 14,344,000 28 29 Net Operating Revenue (445,116) (835,000) (388,000) (5,000) 513,000 1,205,000 2,315,000 2,172,000 2,001,000 1,796,000 1,553,000 1,268,000 30 31 Debt Service
32 2015 Utility Bonds 636,688 632,031 626,344 630,156 622,469 629,681 624,406 629,588 627,678 624,356 635,813 317,906 33 New Bonds (1) 0 0 0 0 0 0 300,000 300,000 300,000 300,000 300,000 300,000 34 Subtotal Debt Service 636,688 632,031 626,344 630,156 622,469 629,681 924,406 929,588 927,678 924,356 935,813 617,906 35 36 Capital Projects 0 535,000 705,000 705,000 705,000 705,000 0 0 0 0 0 0 37 38 Total Expenses 6,755,303 7,848,031 8,519,344 9,074,156 9,666,469 10,325,681 10,626,406 11,405,588 12,247,678 13,165,356 14,182,813 14,961,906 39 40 Total Net Revenues (1,081,803) (2,002,031) (1,719,344) (1,340,156) (814,469) (129,681) 1,390,594 1,242,413 1,073,322 871,644 617,188 650,094 41 42 ENDING FUND BALANCE 6,575,087 4,573,056 2,853,712 1,513,556 699,087 569,406 1,959,999 3,202,412 4,275,734 5,147,377 5,764,565 6,414,659 43 44
45 Reserve Funds
46 Operating Reserve Target (25% of O&M) 1,529,700 1,670,300 1,797,000 1,934,800 2,084,800 2,247,800 2,425,500 2,619,000 2,830,000 3,060,300 3,311,800 3,586,000 47 Drought Reserve ($700,000) 447,499 547,499 647,499 747,499 847,499 947,499 947,499 947,499 947,499 947,499 947,499 947,499 48 Total Combined Reserves 1,977,199 2,217,799 2,444,499 2,682,299 2,932,299 3,195,299 3,372,999 3,566,499 3,777,499 4,007,799 4,259,299 4,533,499 49 Target Met? yes yes yes no no no no yes yes yes yes yes 50 51 Debt Service Coverage - 1.25x (2) -0.70 -1.32 -0.62 -0.01 0.82 1.91 2.50 2.34 2.16 1.94 1.66 2.05 52 Target Met? no no no no no yes yes yes yes yes yes yes 53 1 - Total debt service for New Bonds is estimated at $300,000 2 - (Net Operating Revenue less Projected Grant Revenue) divided by (Total Debt Service) Years 1 -5: Proposition 218 Years 6 - 10: Extended Projection 269
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4.2 Combined Sample Bill Impacts
Table 57 includes a sample of residential bill impacts for a combined water and sewer bill based on the proposed rate increases. Combined, the average residential customer who uses 10 ccf bimonthly will see a $47.60 or 25.1% increase from their current bill. Actual bill impacts will vary based on customer class and consumption per billing period.

Table 57: Sample Residential Combined Bill Impacts
City of Brisbane
Water and Sewer Utility Rate Study 2022
Bimonthly Current
Use (ccf) Bill 2023/24 2024/25 2025/26 2026/27 2027/28
Residential: 5/8" meter, 4 ccf
Water Bill 4 $37.47 $52.24 $56.45 $61.00 $65.92 $71.36
Sewer Bill 4 $80.11 $97.36 $120.45 $149.04 $184.47 $228.33 Total Utility Bill $117.58 $149.60 $176.90 $210.03 $250.39 $299.69 $ Change $32.02 $27.30 $33.14 $40.35 $49.30
% Change 27.2% 18.2% 18.7% 19.2% 19.7%
Residential: 5/8" meter, 10 ccf
Water Bill 10 $82.85 $90.03 $97.01 $104.54 $112.65 $121.52 Sewer Bill 10 $106.67 $147.09 $181.33 $223.61 $275.86 $340.33 Total Utility Bill $189.52 $237.12 $278.34 $328.15 $388.52 $461.85 $ Change $47.60 $41.22 $49.81 $60.37 $73.33
% Change 25.1% 17.4% 17.9% 18.4% 18.9%
Residential: 5/8" meter, 20 ccf
Water Bill 20 $193.35 $216.53 $231.68 $247.92 $265.30 $284.01 Sewer Bill 20 $183.27 $229.98 $282.80 $347.90 $428.18 $527.00 Total Utility Bill $376.62 $446.51 $514.47 $595.81 $693.49 $811.01 $ Change $69.89 $67.97 $81.34 $97.68 $117.52
% Change 18.6% 15.2% 15.8% 16.4% 16.9%
Proposed
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Figure 11 below shows the total bimonthly utility bill for the next five years, including Water, Sewer, Capital Project, and Drought Charges for a typical residential customer using 10 ccf per 2-month billing period. The current combined bill is $224.52. With the proposed rate increases, the combined bill is projected to increase to $496.85 by 2026/27.

Figure 11: Bimonthly Combined Utility Bill
City of Brisbane
Water Utility Rate Study 2022
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APPENDIX A:

SEWER TABLES
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Appendix 1: Sewer Variable Unit Rate Derivation
2023/24
Allocation to Variable Charges
FY2023/24 Revenue Requirement (1) $2,500,000
Variable Charge Recovery % 70%
Variable Charge Recovery $ $1,750,000
Allocation to Flow, BOD, SS Flow BOD SS
Cost Allocation % 50% 25% 25%
Cost Allocation $ $875,000 $438,000 $438,000
Total Annual Loadings (2) 181,000 261,000 261,000
Units ccf lbs lbs
Unit Cost $4.83 $1.68 $1.68
per ccf per lb per lb
1 - Table 34, Line 10
2 - Table 38
3 - Table 39
2024/25
Allocation to Variable Charges
FY2024/25 Revenue Requirement (1) $3,125,000
Variable Charge Recovery % 70%
Variable Charge Recovery $ $2,187,500
Allocation to Flow, BOD, SS Flow BOD SS
Cost Allocation % 50% 25% 25%
Cost Allocation $ $1,094,000 $547,000 $547,000
Total Annual Loadings (2) 185,000 266,000 266,000
Units ccf lbs lbs
Unit Cost $5.91 $2.06 $2.06
per ccf per lb per lb
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2025/26
Allocation to Variable Charges
FY2025/26 Revenue Requirement (1) $3,906,000
Variable Charge Recovery % 70%
Variable Charge Recovery $ $2,734,200
Allocation to Flow, BOD, SS Flow BOD SS
Cost Allocation % 50% 25% 25%
Cost Allocation $ $1,367,000 $684,000 $684,000
Total Annual Loadings (2) 189,000 271,000 271,000
Units ccf lbs lbs
Unit Cost $7.23 $2.52 $2.52
per ccf per lb per lb
2026/27
Allocation to Variable Charges
FY2026/27 Revenue Requirement (1) $4,883,000
Variable Charge Recovery % 70%
Variable Charge Recovery $ $3,418,100
Allocation to Flow, BOD, SS Flow BOD SS
Cost Allocation % 50% 25% 25%
Cost Allocation $ $1,709,000 $855,000 $855,000
Total Annual Loadings (2) 193,000 276,000 276,000
Units ccf lbs lbs
Unit Cost $8.85 $3.10 $3.10
per ccf per lb per lb
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Water and Sewer Utility Rate Study 2022
2027/28
Allocation to Variable Charges
FY2027/28 Revenue Requirement (1) $6,104,000
Variable Charge Recovery % 70%
Variable Charge Recovery $ $4,272,800
Allocation to Flow, BOD, SS Flow BOD SS
Cost Allocation % 50% 25% 25%
Cost Allocation $ $2,136,000 $1,068,000 $1,068,000
Total Annual Loadings (2) 197,000 281,000 281,000
Units ccf lbs lbs
Unit Cost $10.84 $3.80 $3.80
per ccf per lb per lb
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Appendix 2: Volume Rate by Customer Class
2023/24
Total
Flow BOD SS Variable Rate
Customer Class BOD SS $4.83 $1.68 $1.68 per ccf
Residential 165 165 $4.83 $1.73 $1.73 $8.29
Standard Commercial 200 200 $4.83 $2.09 $2.09 $9.02
Medium Commercial 300 300 $4.83 $3.14 $3.14 $11.12
Heavy Commercial 400 400 $4.83 $4.19 $4.19 $13.21
2024/25
Total
Flow BOD SS Variable Rate
Customer Class BOD SS $5.91 $2.06 $2.06 per ccf
Residential 165 165 $5.91 $2.12 $2.12 $10.15
Standard Commercial 200 200 $5.91 $2.57 $2.57 $11.04
Medium Commercial 300 300 $5.91 $3.85 $3.85 $13.61
Heavy Commercial 400 400 $5.91 $5.13 $5.13 $16.18
2025/26
Total
Flow BOD SS Variable Rate
Customer Class BOD SS $7.23 $2.52 $2.52 per ccf
Residential 165 165 $7.23 $2.60 $2.60 $12.43
Standard Commercial 200 200 $7.23 $3.15 $3.15 $13.53
Medium Commercial 300 300 $7.23 $4.72 $4.72 $16.68
Heavy Commercial 400 400 $7.23 $6.30 $6.30 $19.83
2026/27
Total
Flow BOD SS Variable Rate
Customer Class BOD SS $8.85 $3.10 $3.10 per ccf
Residential 165 165 $8.85 $3.19 $3.19 $15.23
Standard Commercial 200 200 $8.85 $3.87 $3.87 $16.59
Medium Commercial 300 300 $8.85 $5.80 $5.80 $20.45
Heavy Commercial 400 400 $8.85 $7.73 $7.73 $24.32
2027/28
Total
Flow BOD SS Variable Rate
Customer Class BOD SS $10.84 $3.80 $3.80 per ccf
Residential 165 165 $10.84 $3.91 $3.91 $18.67
Standard Commercial 200 200 $10.84 $4.74 $4.74 $20.33
Medium Commercial 300 300 $10.84 $7.11 $7.11 $25.07
Heavy Commercial 400 400 $10.84 $9.48 $9.48 $29.81
1 - Table 12
Strength (mg/l)
Strength (mg/l)
Wastewater Unit Rates ($ per ccf or lb)
Strength (mg/l)
Wastewater Unit Rates ($ per ccf or lb)
Wastewater Unit Rates ($ per ccf or lb)
Strength (mg/l)
Wastewater Unit Rates ($ per ccf or lb)
Strength (mg/l)
Wastewater Unit Rates ($ per ccf or lb) (1)
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Brisbane City CouncilDecember 15, 2022

Brisbane City Council
December 15, 2022