AGENDA
ITEM
6 OF
AGENDA
CALEXICO California ITEM
WHERE CALIFORNIA AND MEXICO MEET
CITY COUNCIL
AGENDA STAFF REPORT
DATE: August 21, 2024
TO: Mayor and City Council
APPROVED BY: Juan Contreras, Acting City Manager JAe
PREPARED BY: Sandra L. Fonseca, Interim Finance Director OF Lilliana Falomir, Public Works Manager - Administrative SUBJECT: Public Hearing to Consider Resolution No. _ _ A Resolution of the City Council of the City of Calexico Adopting Water and Sewer Service Charges and Making Certain Findings and Taking Certain Actions Relating Thereto.
====: =================
Recommendation:
It is recommended that the City Council of the City of Calexico approve the following items:
1. Conduct a public hearing to consider adopting increases to the water and sewer service charges.
2. If there is no majority protest, adopt Resolution No. _ A Resolution of the City Council of the City of Calexico Adopting Water and Sewer Service Charges and Making Certain Findings and Taking Certain Actions Relating Thereto.
Background:
On March 7, 2023, the City of Calexico requested proposals from qualified professional firms to conduct a cost-of-service rate study for the City's water and wastewater utilities and recommend changes to the rate structure and rate adjustments to fully cover the cost of operating, maintaining and upgrading the water and wastewater systems.
The City of Calexico owns and operates a water treatment plant, water distribution system, and a wastewater collection and treatment system. The City provides water and sewer service within its jurisdictional boundaries and within unincorporated areas outside City limits.
Other local cities have recently increased their water and wastewater rates due to rising costs to purchase, treat and distribute water, and to collect and treat wastewater due to increasingly stricter State of California Department of Water Resources regulations. In addition, infrastructure that was installed in the 1940's is starting to fail and requires costly replacement.
The City last conducted a Water and Sewer Rate and Connection Fee Study in 2018, with annual increases through July 1, 2022. Also, the City has developed a substantial Capital Improvement Program (CIP) for the next five years that requires funding.
On April 5, 2023, the City Council of the City of Calexico authorized the City Manager to sign Agreement of Professional Services with Willdan Financial Services in the amount of $61,995.00 for the preparation of a Water and Sewer Rate and Connection Fee Study.
On June 5, 2024, Chris Fisher, Willdan Financial Services presented the proposed Water and Sewer Rate Study to the City Council of the City of Calexico. The City Council tabled the item, requested more information, and requested that it be placed on the special meeting scheduled for June 12, 2024.
On July 12, 2024, the City Council took the following actions:
a) Adopted a plan to modify the water and sewer rates over the next five years. b) Authorized the Acting City Manager to begin the Proposition 218 Notification Process at least 45 days before the public hearing).
c) Scheduled a public hearing to consider adoption of updated water and sewer rates.
Discussion and Analysis:
The water and sewer rate study identifies the cost of service and aggregate revenue needed to deliver safe and reliable water, collect and treat wastewater, and maintain the infrastructure associated with both the water and wastewater systems. The study calculates updated water and sewer rates based upon the revenue needed to meet system objectives. The updated rates are based upon proportionate cost-of-service among and between various classes of customers.
The revenue generated from the rates will not exceed the amount necessary for each system, and can only be used for water and sewer operations, maintenance and capital projects.
Considerations include the funding needed for the next five years to operate and maintain the systems, and determination of the adequate revenue necessary to fund the Capital Improvement Projects ("CIPs") identified in the Capital Improvement Program. Ultimately the goal is to adequately fund the operations to provide clean, safe and reliable water that meets environmental standards. That goal includes the funding of future system rehabilitation costs and the maintenance to extend the useful lives of the existing infrastructure and assets, as well as maintaining a reserve for emergencies and changes to state and federal water regulations.
The last water and sewer rates that the City implemented went into effect in FY 2022-2023. On October 2022, the California State Auditors submitted to the City their findings and recommended the following:
2 1. Ensure that the City collects enough revenue to pay for the cost of providing water during a shortage.
2. Ensure that the City's next water rate study considers and, to the extent consistent with legal requirements, incorporates best practices for conservation pricing options, such as tiered rates or seasonal rates and special drought rates.
With the proposed changes to the water and sewer rates, the average City of Calexico rates will still be lower than the water and sewer rates in surrounding communities. This is due to City staffs efficiency in completing the tasks required to treat and distribute the water, and to collect and treat wastewater. It is also due to the working capital the City has built up over the past years in the enterprise funds.
Pursuant to the California Constitution, article XIII D, section 6 (Proposition 218), prior to imposing a new or increased property-related fee such as water rates, the City is required to hold a public hearing and mail notice of the public hearing to the record owner of the property and any tenant who is directly liable for the payment of the proposed fees (i.e., a customer of record). Proposition 218 requires that the notice include the following:
(a) the amount of the fee or charge proposed to be imposed; (b) the basis upon which the fee or charge was calculated; (c) the reason for the fee or charge; and
(d) the date, time, and location of the public hearing on the proposed fee or charge.
Consistent with these requirements, the City sent the Proposition 218 Notice at least 45 days prior to this public hearing. The notice includes proposed modifications to the Water and Sewer rate structure, examples of the impact to typical users within the various customer classes, an explanation of the reason for the proposed rate increases, the basis upon which the rates were calculated, and the date, time, and location of the public hearing.
If there is no majority protest at the close of the public hearing, the City Council may consider adopting the proposed rates for water and sewer charges by resolution. However, if there is a majority protest - i.e., a majority of the owners or customers of the parcels file written protests against the proposed water or sewer service charges, the City Council will be prohibited from adopting the increases. If the proposed rates for water and sewer service are adopted, they will take effect September 1, 2024.
This Resolution is statutorily exempt from the requirements of CEQA pursuant to California Public Resources Code section 21080(b)(8) and State CEQA Guidelines section 15273(a). The administration, operation, maintenance, and improvements of the water and sewer system, which are to be funded by water and sewer service charges, are necessary to maintain water and sewer services within the City's existing service area. The water and sewer service charges are necessary and reasonable to fund the administration, operation, maintenance, and improvements of the water and sewer system. By funding the maintenance and operation of the water and sewer system, the City will provide safe, clean drinking water and prevent and reduce the number of sanitary sewer overflows.
3 Fiscal Impact:
There is no impact to the General Fund. The revenue collected will provide a funding mechanism for the operation and maintenance programs necessary for the City's water and sewer systems.
Ratepayers will be paying for the water and sewer service charges.
Coordinated With:
City Manager's Office.
City Attorney's Office.
Finance Department.
Public Works Department.
Attachments):
Resolution No. - A Resolution of the City Council of the City of Calexico Adopting Water and Sewer Service Charges and Making Certain Findings and Taking Certain Actions Relating Thereto.
2. Comprehensive Water & Sewer Utility Rate Study dated March 25, 2024.
3. Proposition 218 Notice (English)
4. Proposition 218 Notice (Spanish)
1 4
ATTACHMENT NO. 1
RESOLUTION NO. _
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALEXICO,
CALIFORNIA, ADOPTING WATER AND SEWER SERVICE CHARGES, AND MAKING
CERTAIN FINDINGS AND TAKING CERTAIN ACTIONS RELATING THERETO WHEREAS, the City of Calexico (the "City") provides certain water and wastewater services and charges ratepayers fees for such services; and WHEREAS, in 2022, the City retained Willdan Financial Services ("Willdan"), an independent fee consultant, to prepare a Water and Sewer Rate and Connection Fee Study (the "Study") to determine the rates necessary to meet the cost of providing the water and sewer services provided by the City, and a copy of the Study has been made available and remains available for public inspection at the office of the City Clerk and is incorporated herein by this reference; and
WHEREAS, based on the findings set forth in the Study, the City has determined that it is necessary to impose rate increases for its water and sewer service charges (collectively, the "Charges"); and
WHEREAS, the proposed Water Service Charges comprise two components: (1) a monthly fixed water charge ("Fixed Water Charge"), and (2) monthly volumetric water rates ("Volumetric Water Charge"); and
WHEREAS, the City charges its customers based on customer class, including Residential and Commercial/Non-Residential and provides water service on a wholesale basis to Construction/Truck customers and customers purchasing water for resale ("Wholesale Customers"); and
WHEREAS, the City's customer classes are established based on shared water usage and consumption patterns, reflecting the varying demands placed on the City's water system; and WHEREAS, the Fixed Water Charge is designed to recover a portion of the City's fixed costs for providing water service, including billing, customer service, and meter service costs; and
WHEREAS, the Fixed Water Charge is calculated based on customer class, with Residential customers paying a flat fee based on the number of dwelling units,, and all other customers paying a fee based on meter size; and
WHEREAS, the Volumetric Water Charge is designed to recover the remainder of the City's fixed costs for providing water service, and variable portions of the City's operating costs, and is imposed based on hundred cubic feet ("HCF") of water used per month; and WHEREAS, the Sewer Service Charges are designed to recover the costs of providing sewer service to the City's customers, and are imposed on customers based on customer class; and
WHEREAS, the City has established four customer classes for sewer service: Residential and Non-Residential Customers, with Non-Residential Customers including Non-Residential Rate II, Non-Residential Rate Ill, and Non-Residential Rate IV; and WHEREAS Sewer Service Charges for Residential customers include a uniform rate determined based on the number of dwelling units served by the sewer connection, and the Non- Residential Rate customers include a monthly fixed charge and a volumetric rate to recover the variable costs of treatment and disposal of wastewater, measured as dollars per HCF of flow; and WHEREAS, the Sewer Service Charges are calculated based on shared characteristics of strength and flow of wastewater, and the varying demands placed on the City's sewer system per customer class; and
WHEREAS, the Charges are proposed to take effect on September 1, 2024, and to be increased in accordance with the maximum amounts set forth in Exhibit "A" hereto each July 1 thereafter, through and including July 1, 2028; and
WHEREAS the revenues derived from the Charges will not exceed the funds required to provide water or sewer service, and shall be used exclusively for the operation and maintenance of the water or sewer system, as the case may be; and
WHEREAS , the Charges are equitable to all customers; and WHEREAS, the amount of the proposed Charges will not exceed the proportional cost of the water service or sewer service, as applicable, attributable to each parcel upon which they are proposed for imposition; and
WHEREAS, the proposed Charges will not be imposed on a parcel unless water or sewer service is actually used by, or immediately available to, the owner or tenant of the parcel; and WHEREAS, article XIII D, section 6 of the California Constitution ("Article XIII D") requires that prior to imposing any new property-related fee such as the Charges, or any increase to existing Charges, the City shall provide written notice (the "Notice") by mail of the proposed increases to the Charges to the record owner of cach parcel upon which the Charges are proposed for imposition and any tenant directly liable for payment of the Charges, the amount of the Charges proposed to be imposed on each parcel, the basis upon which the Charges were calculated, the reason for the Charges, and the date, time and location of a public hearing (the "Hearing") on the proposed Charges; and
WHEREAS, pursuant to Article XIII D such Notice is required to be provided to the affected property owners and tenants directly liable for the payment of the Charges not less than forty-five days prior to the Hearing on the proposed Charges; and WHEREAS, the City did provide such Notice to the affected property owners and tenants in compliance with Article XIII D at least 45 days prior to the Hearing; and WHEREAS, a public Hearing was held on August 21, 2024, noticed in the manner and for the time required by law; and
WHEREAS, at the Hearing, the City Council (the "City Council") considered all written materials and written protests to the proposed new or increased Charges received prior to the close of the Hearing, and heard oral testimony concerning the establishment and imposition of the proposed Charges, and at the close of the Hearing the City determined that it did not receive written protests against the establishment and imposition of the proposed Charges from a majority of the affected property owners or tenants directly liable for the payment of such Charges; and
WHEREAS, the Water Charges for Wholesale Customers are not subject to the requirements of article XIII D, section 6 of the California Constitution, because they are not imposed as an incident of property ownership; and
WHEREAS, the Water Charges for Wholesale Customers : (1) are imposed for a specific government activity, service, or product, provided directly to the payor; (2) are no more than necessary to recover the estimated reasonable costs of the governmental activity, service, or product, for which the Water Fee is imposed ; and (3) the manner in which those costs are allocated to the payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity, service, or product, for which the Water Charges on Wholesale Customers are imposed, and the Water Charges for Wholesale Customers are not taxes within the meaning of California Constitution, article XIII C, section 1(e); and WHEREAS, the City Council now desires to establish and impose the proposed Charges.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CALEXICO DOES HEREBY RESOLVES AS FOLLOWS:
SECTION 1. Recitals. The Recitals set forth above are true and correct statements and are incorporated as an operative part of this Resolution and made findings and determinations of the City Council by this reference.
SECTION 2. Adoption of Charges. The City Council hereby adopts the Charges in the maximum amounts and on the effective dates set forth in Exhibit "A" hereto and incorporated herein by this reference. A bill for the Water and Sewer Charges shall be sent to the responsible parties directly.
SECTION 3. Inconsistency with Other Charges. To the extent the Charges established by this Resolution are inconsistent with any other fee or charge previously adopted by the City Council, it is the explicit intention of the City Council that the Charges adopted pursuant to this Resolution shall prevail.
SECTION 4 Rules and Regulations. The City Council may make rules or regulations and from time to time may amend, revoke, or add rules and regulations, not consistent with this Resolution, as they may deem necessary or expedient in respect to billing for the Charges adopted hereby; provided, however, that no such action shall result in any Charges being increased or exceeding the cost of providing the service or product for which it is imposed.
SECTION 5. Severability. If any section, subsection, clause or phrase in this Resolution or the application thereof to any person or circumstances is for any reason held invalid, the validity of the remainder of this Resolution or the application of such provision to other persons or circumstances shall not be affected thereby. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses, or phrases or the application thereof to any person or circumstance be held invalid.
SECTION 6. Further Action. The City Council authorizes the City Manager, and other City staff members as designated by the City Manager or the Calexico Municipal Code, to take all actions necessary to effectuate the intent of this Resolution and to implement the Charges adopted pursuant to this Resolution.
SECTION 7. Certification. The City Clerk shall certify the passage of this Resolution and.
SECTION 8. Effective Date. This Resolution shall take effect immediately.
SECTION 9. CEQA Compliance. The City Council finds that the administration, operation, maintenance, and improvements of the City's water and sewer systems, which are to be funded by the Charges as set forth herein, are necessary to maintain water and sewer service within the City's existing service areas as described herein. The City Council further finds that the administration, operation, maintenance and improvements of the City's water and sewer systems, to be funded by the Charges, will not expand the City's water and sewer systems. The City Council further finds that the adoption of the rates for the Charges is necessary and reasonable to fund the administration, operation, maintenance and improvements of the City's water and sewer systems. Based on these findings, the City Council determines that the adoption of the Charges established by this Resolution are exempt from the requirements of the California Environmental Quality Act pursuant to section 21080(b)(8) of the Public Resources Code and section 15273(a) of the State CEQA Guidelines. The documents and materials that constitute the record of proceedings on which these findings have been based are located at the City's offices, 608 Heber Avenue, Calexico, CA 92231.
SECTION 10. Future Fees and Charges. The Charges adopted pursuant to this Resolution may be amended in the future by either resolution or ordinance of the City Council. A resolution adopting updated Charges shall supersede the Charges adopted herein with the same force and effect as an ordinance.
PASSED AND ADOPTED by the City Council of the City of Calexico on this 21s day of August, 2024, by the following vote:
Camilo Garcia, Mayor
ATTEST:
Veronica L. Alvarado, City Clerk
STATE OF CALIFORNIA )
COUNTY OF IMPERIAL ) ss
CITY OF CALEXICO )
I, Veronica L. Alvarado, City Clerk of the City of Calexico, California, hereby certify that Resolution No. was adopted at a regular meeting of the City Council of the City of Calexico held on the 215 day of August, 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Veronica L. Alvarado, City Clerk
Exhibit A
Water and Sewer Service Charges
CITY OF CALEXICO
WATER AND SEWER SERVICE CHARGES
The table below illustrates the monthly Water Rates by customer class and their effective dates Description 9/1/24 7/1/25 7/1/26 7/1/27 7/1/28
Monthly Fixed Charge:
Residential
First Dwelling Unit $ 22.52 $ 24.77 $ 27.24 $ 29.70 $ 32.38 Additional Dwelling Unit $ 22.52 $ 24.77 $ 27.24 $ 29.70 $ 32.38 All Other Customers
3/4 Inch $ 22.52 $ 24.77 $ 27.24 $ 29.70 $ 32.38
1.0 Inch $ 36.98 $ 40.67 $ 44.74 $ 48.78 $ 53.18
1.5 Inch $ 73.13 $ 80.43 $ 88.47 $ 96.45 $ 105.16
2.0 Inch $116.51 $128.14 $140.94 $153.67 $ 167.53
3.0 Inch $217.73 239.47 $263.38 $287.16 $ 313.07
4.0 Inch $362.33 $398.50 $438.30 $477.87 $ 520.99
6.0 Inch $723.83 $796.08 $875.59 | $954.63 $1,040.77
Construction Truck Will now pay based on respective meter size Water for Resale Will now pay based on respective meter size Volumetric Rate Per 100 Cubic Feet:
Residential $ 2.39 $ 2.63 $ 2.89 $ 3.15 $ 3.43
Commercial, Manufacturing and Industrial 2.06 $ 2.26 $ 2.49 $ 2.71 $ 2.95 Construction/Truck $ 6.40 $ 7.03 $ 7.73 $ 8.42 $ 9.17
Water for Resale $ 2.38 $ 2.61 $ 2.87 $ 3.13 $ 3.41
City/Government $ 6.12 $ 6.72 $ 7.39 $ 8.05 $ 8.77
Commercial Irrigation Only $ 3.16 3.47 $ 3.82 $ 4.16 $ 4.53 Schools $ 3.21 $ 3.53 $ 3.87 $ 4.22 $ 4.60
The table below illustrates the monthly Sewer Rates by customer class and their effective dates Description 9/1/24 7/1/25 7/1/26 7/1/27 7/1/28
Monthly Fixed Charge:
Residential [1]
First Dwelling Unit $ 58.71 $ 79.26 $ 80.85 $ 82.47 $ 84.12 Additional Dwelling Unit $ 58.71 $ 79.26 $ 80.85 $ 82.47 $ 84.12 Non-Residential
Commercial Rate II $ 33.13 $ 44.72 $ 45.62 $ 46.53 $ 47.46 Commercial Rate III $ 33.13 $ 44.72 $ 45.62 $ 46.53 $ 47.46 Commercial Rate IV $ 33.13 $ 44.72 $ 45.62 $ 46.53 $ 47.46 Volumetric Rate Per 100 Cubic Feet:
Commercial Rate II $ 1.97 $ 2.65 $ 2.70 $ 2.75 $ 2.81
Commercial Rate III $ 4.52 $ 6.09 $ 6.20 $ 6.32 $ 6.46
Commercial Rate IV $ 8.28 $ 11.16 $ 11.37 $ 11.58 $ 11.83 Notes:
[1] All residential customers only pay a flat fee per dwelling unit, regardless of usage ATTACHMENT NO. 2
City of Calexico, CA
Repor
Comprehensive Water & Sewer
Utility Rate Study
ICO
CALEXICO
IMPERIAL •LIFORNIA
cF
COUNTY
W WILLDAN
) CALEXICO California
WHERE CALIFCHNIA AND MEAICE MEET
TABLE OF CONTENTS
TABLE OF CONTENTS ..... i
Section 1 - Executive Summary.. ..1
1.1 Introduction... 1
1.2 Overview of the Rate Study Process .1
1.3 Summary of Proposed Rates.... ..3
Section 2 - Revenue Sufficiency Analysis ..6
2.1 Financial Planning Principles.... ...6
2.2 Existing Rates .6
2.3 Revenue Sufficiency Process ... 8
2.3.1 Budget... 8
2.3.2 Capital Improvement Plan (CIP) 9
2.3.3 Debt Service.... ....10
2.3.4 Gross and Net Revenue Requirement ...11
2.4 Customers & Billable Flows.. ..12
• 2.4.1 Customer Billing Analysis.... ..13
2.5 Financial Projections Under Existing Rates.. ...13
Section 3 - Cost-of-Service (COS) Analysis.. ...16
3.1 General ..16
3.2 Water Cost-of-Service. 16
3.2.1 Peaking Factors.......... .16
3.2.2 Functional Unbundling of Revenue Requirements... 18
3.2.3 Classification of Water System Costs .19
3.2.4 Allocation to Customer Classes and Unit Cost Development .20
3.2.5 Rate Design by Unit Cost... ..22
3.2.6 COS and Revenue Check . 26
3.3 Sewer Cost-of-Service ............... 28
3.3.1 Functional Unbundling of Revenue Requirements .28
3.3.2 Classification of Revenue Requirements. . 29
W WILLDAN Water & Sewer Rate Study - Draft Report
FINANCIAL SERVICES
March 25, 2024
) CALEXICO California
3.3.3 Allocation to Customer Classes and Unit Cost Development.. ..30
3.3.4 COS and Revenue Check.. .32
Section 4 - Proposed Test Year Rates.. .33
4.1 General ..33
4.2 Typical Monthly Bill Comparison. .36
4.3 Rate Comparison with Other Utilities .38
Section 5 - Projected Operating Results ... 40
5.1 General .... 40
5.2 Projected User Rate Revenues.. ..40
Debt Service Coverage ....... 43
5.3 Summary of Projected Operating Results... 44
5.4 Section 6 - Conclusions and Recommendations ... ..48
6.1 Disclaimers.. 48
6.1.1 General Disclaimer ..... 48
6.1.2 Municipal Advisory Disclaimer .48
6.2 Conclusions. 49
Recommendations. ..50
6.3 W WILLDAN ii Water & Sewer Rate Study - Draft Report FINANCIAL SERVICES March 25, 2024
CALEXICO California
WHEAL CALIEORNIA AND MERICO MEET
Section 1 - Executive Summary
1.1 Introduction
Willdan Financial Services (Willdan) is pleased to submit to the City of Calexico (the "City") the Water and Sewer Rate Study report (the "Report") for your consideration. Willdan has completed the study of the City's water and sewer rates and summarized the results of the investigations, analyses, and conclusions in this Report.
To enable the provision of water service to its residents and customers, the City owns and operates a 14 million gallon per day (MGD) surface water treatment plant, three above grade storage tanks, and transmission and distribution pipelines and facilities. The City also provides sewer treatment and collection services to residential and nonresidential customers within its incorporated limits. The City has focused a significant amount of attention and effort on strategic planning measures in all areas of utility operations to ensure that it is able to provide uninterrupted service to its customers, and so that it remains prepared for the future.
As part of its ongoing strategic planning efforts, the City commissioned Willdan to perform a water and sewer rate study to analyze the revenue sources and expenditures of the water and sewer utility systems and provide recommendations for proposed rate and/or rate structure adjustments to meet the financial and administrative goals and objectives of the City. The primary objectives of the rate study include:
> Full recovery of costs related to utility operations (i.e., operating and maintenance costs, debt, and other expenditure requirements);
• Cost-based rate structures;
• Consistency with American Water Works ("AWWA") and Water Environment Federation ("WEF") guidelines;
• Equity among customer classes;
• Meeting substantive and procedural Proposition 218 requirements; • Administrative efficiency (i.e., easy to understand and implement); and • 5-Year capital funding plan.
1.2 Overview of the Rate Study Process
This study includes the development and presentation of water and sewer financial plans for a 5-year planning period and includes the development of cost-based rates through a cost- of-service and rate design analysis. Utility rates must be set at a level such that operating, maintenance, debt, and capital expenses are funded with the revenues received from customers. In addition, the revenues generated from utility rates must only be used for this purpose and for each system separately. This is a significant point, as failure to achieve the 1 Page
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needed revenues can lead to unacceptable service levels and inadequately maintained facilities. Therefore, a rate study typically consists of following three interrelated analyses:
1. Financial Planning/Revenue Requirement Analysis: Creates a five-year plan to support an orderly, efficient program of on-going maintenance and operating costs, capital improvement and replacement activities, debt financing, and retirement of outstanding debt. In addition, the plan should fund and maintain appropriate reserve balances based on industry standards, as well as the City's fiscal policies and specific needs.
Il. Cost-of-Service Analysis: Identifies and apportions annual revenue requirements (i.e., expenditures) to operational and functional cost components based on the demand placed on the utility system. The purpose of this analysis is to develop rates that generate revenues relatively proportionate to the share of each utility's costs. This objective is consistent with industry standards as well as the requirements of Proposition 218.
Ill. Rate Design: Develops an equitable and proportionate fixed/variable schedule of rates for the City's customer base. The policy objectives are coordinated with Proposition 218 (Prop 218) requirements and cost-of-service objectives to achieve a balance between customer equity and financial stability goals. The balance of fixed and variable charges considers the need for a stable revenue source (the fixed charge) and the variable component of the rate structure such that customers placing higher costs on the system (through higher water and sewer use) incur a higher bill reflective of their impact on the system.
Revenue Requirement Analysis
Compares the revenues to the expenses of the utility
to determine the overall rate adjustment required.
Cost of Service Analysis
Allocates the revenue requirements to the fixed/variable cost components based on cost of service.
Rate Design Analysis
Considers both the level and structure of the rate design to collect the appropiate and targeted level of revenues. 2 | Page
CALEXICO California
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This rate study utilizes generally accepted rate-making principles and standards established by industry experts such as the AWWA in its "MI - Principles of Water Rates Fees and Charges" manual and WEF in its "Financing and Charges for Sewer Systems, Manual of Practice No. 27". The principles established by these entities are used as guidelines in the development of the proposed rates for water and sewer. A discussion of some of the key principles of ratemaking is presented in the following subsection of this Report.
1.3 Summary of Proposed Rates
The rate study methodology applied in the development of updated water and sewer rates, outlined in this Report, consisted of reviewing the historical operating results of the water and sewer utility systems, analyzing the budget to identify the net revenue requirements to be recovered from user rate revenues, performing general cost-of-service allocations based on the rate components and functional cost categories, and revising the rates based on the applicable costs and expenditures to be recovered from user rates. In addition, an analysis of the system customers and usage characteristics was performed to identify the rate determinants since they drive the recommended rates, which are the primary sources for generating revenues. The allocated revenue requirements were utilized in conjunction with the rate determinants and rate structure to develop the proposed water and sewer rates.
The findings and conclusions of the rate analysis, as well as the resulting revised rate recommendations, were utilized to develop a projection of future operating results for a 5- year planning period from Fiscal Year (FY) 2025 (beginning July 1, 2024) through FY 2029 (ending June 30, 2029), herein referred to as the "Projection Period". The purpose for developing the 5-year projections is to demonstrate the financial capability of the water and sewer revenues to support system operations and fund planned capital improvements. The analyses, findings and accompanying recommendations are presented in the subsequent sections of the Report.
The water and sewer rate analyses described in the Report are performed based on the general guidelines of the defined objectives, as well as common industry standards for setting utility rates. In addition to focusing on these major objectives, the rate analyses performed herein will consider other factors in designing rates. As will be discussed in detail later in the Report, such other rate considerations generally include sensitivity to the impact on existing customers, the relative comparability with neighboring utilities and the City's existing rate structure. The proposed water and sewer rates for assumed implementation effective July 1, 2024 (or other such date as determined by the City) for FY 2024/25 (FY 2025, herein referred to as the "Test Year"') are provided in Tables 1 and 2, respectively. The existing rates are provided in Tables 3 and 4, respectively.
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CALEXICO California
WHEDE CALIFOKNIA AND ME
Table 1 - Proposed Monthly Water Rates
Description Rate
Monthly Fixed Charge:
Residential
First Dwelling Unit 22.52
Additional Dwelling Unit $ 22.52
All Olher Customers
3/4 Inch $ 22.52
1.0 Inch $ 36.98
1.5 Inch 73.13
2.0 Inch $ 116.51
3.0 Inch 217.73
4.0 Inch 362.33
6.0 Inch $ 723.83
Volumetric Rates Per 100 Cubic Feet:
Residential 2.39
Commercial, Manufacturing and Industrial 2.06
Construction/Truck $ 6.40
Water for Resale $ 2.38
City/Government 6.12
Commercial Irrigation Only 3.16
Schools $ 3.21
4 | Page
CALEXICO California
WHEDE CALIFORNIA AND MAICO MERI
Table 2 - Proposed Monthly Sewer Rates
Description Rate
Monthly Fixed Charge:
Residenfial "
First Dwelling Unit 58.71
Additional Dwelling Unit 58.71
Non-Residential
Non-Residential Il $ 33.13
Non-Residential Ill 33.13
Non-Residential IV 33.13
Volumetric Rates Per 100 Cubic Feet:
First Dwelling Unif $
Additional Dwelling Unit
Non-Residential Il $ 1.97
Non-Residential III $ 4.52
Non-Residential IV $ 8.28
Notes:
[!] All residential customers only pay a flat fee per dwelling unit, regardless of usage.
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Section 2 - Revenue Sufficiency Analysis
2.1 Financial Planning Principles
While the individual rates for each of the utility systems vary based on a variety of factors, rates should be consistent with common rate-making principles within the utility industry. The guiding principle is that rates designed for any utility should provide a reasonable balance between several key factors. In general, the utility rates should:
• Generate a stable revenue stream that, when combined with other sources of funds, is sufficient to meet the expenditure requirements and goals of the system; • Be based upon the proportionate cost of providing the service and not exceed the cost of providing the service - in compliance with California Proposition 218; • Be equitable - that is, they should generate revenue from customer classes in a manner which is reasonably in proportion to the cost to provide service to that customer class;
• Be easy to understand by customers; and
• Be easy to administer by the utility.
Striking the appropriate balance between the principles of ratemaking is the result of a detailed process of evaluation of revenue requirements and cost-of-service, and how those translate into the rate design alternatives which meet legal requirements and the specific objectives of the utility under the circumstances in which it operates.
2.2 Existing Rates
The City has established user rates for water and sewer service that are applied to retail customers of the system. The rates charged for water and sewer service are approved by the City Council and are not subject to administrative review or approval by any other local or state agency. The City has historically adjusted rates, as necessary, to provide for recovery of financial obligations including operating expenses, debt service, capital expenditures and any other expenses and transfers.
The existing water rates consist of 1) a monthly fixed charge that designates the minimum amount a customer will pay regardless of their water usage, and 2) a uniform volumetric rate per 100 cubic feet. The monthly fixed charge varies based on meter size. The volumetric rates vary based on the customer type and include a uniform rate for all water usage for these respective customers, such that the rate per 100 cubic feet remains the same regardless of the amount of water usage. The existing rates for water service are provided in Table 3. 6 Page
CALEXICO California
WHEDE CALIIO
Table 3 - Existing Monthly Water Rates
Description Rate
Monthly Fixed Charge:
Residential
First Dwelling Unit 18.66
Additional Dwelling Unit 9.33
All Other Customers
3/4 Inch 20.69
1.0 Inch $ 34.55
1.5 Inch $ 68.90
2.0 inch 110.27
3.0 Inch 220.75
4.0 Inch 344.88
6.0 Inch $ 689.55
Construction Truck 110.86
Water for Resale 110.91
Volumetric Rates Per 100 Cubic Feel:
Residential 2.15
Commercial, Manufacturing and Industrial 3.45
Construction/Truck 8.18
Water for Resale $ 11.76
City/Government $ 3.45
Commercial Irrigation Only 3.45
Schools $ 3.45
The existing sewer rates consist of 1) a monthly fixed charge (flat monthly fee) that applies to all residential customers by dwelling unit regardless of their usage, 2) a monthly fixed charge for all non-residential customers that designates the minimum amount they will pay by account and 3) a non-residential volumetric rate component per 100 cubic feet that recovers the costs of treatment and disposal of wastewater. The non-residential volumetric rate varies based on the strength of each customer's sewer discharge classification.
Residential customers pay only a monthly flat fee, and therefore, do not pay a volumetric rate based on their respective sewer discharge such as the non-residential customer classes.
The existing rates for sewer service are provided in Table 4. 7 | Page
CALEXICO California
WHERE CALICHNIA AND MEXICO ME
Table 4 - Existing Monthly Sewer Rates
Description Rate
Monthly Fixed Charge:
Residential '"
First Dwelling Unit $ 14.23
Additional Dwelling Unit $ 22.11
Non-Residential
Non-Residential I| $ 41.22
Non-Residential !!! $ 46.45
Non-Residential IV $ 51.56
Volumelric Rates Per 100 Cubic Feet:
First Dwelling Unit $
:
Additional Dwelling Unit $
Non-Residential Il 4.12
Non-Residential Ill 4.64
Non-Residential IV $ 5.15
Notes:
[I] All residential customers only pay a flat fee per dwelling unit, regardless of usage.
2.3 Revenue Sufficiency Process
In evaluating whether the existing rates will generate sufficient revenue to meet the expenditure requirements of the water and sewer systems, the annual expenditures required for each utility (herein referred to as the "Revenue Requirements") must be developed. The Revenue Sufficiency Analysis compares the forecasted revenues for each utility system under existing rates (including customer growth) to the projected Revenue Requirements.
2.3.1 Budget
The revenue sufficiency analysis performed as part of this study and summarized in this report utilizes the City's budget for FY 23/24 (the "Budget" for FY ending June 30, 2024) as one variable to determine the gross Revenue Requirements to be recovered from user rates over the Projection Period. The Budget, as prepared by the City, is provided on a line-item basis, and is used for projecting the budgeted financial needs for the Test Year and the remainder of the Projection Period. In developing the rate analysis, certain adjustments are made such that the expenditures are categorized into either Operating and Maintenance (0&M) expenses or non-operating expenses. In addition, only recurring costs included in the current 8 Page
CALEXICO California
WHERE CALIFORNIA AND MEXICO MEE
Budget were included as part of the revenue requirement analysis. One-time costs were identified and evaluated in discussions with City Staff and removed if appropriate. Recurring annual costs were escalated using suitable indexes or escalation factors, again in discussion with City Staff. The O&M expenses are primarily those ongoing costs for labor, materials, supplies, services, etc., required to manage and operate the utility system on a day-to-day basis while maintaining a dependable level of service. The O&M requirements are generally a function of a budgetary process and are directly related to the level of service provided to customers of the utility system. The non-operating expenses include such items as capital outlay and any other expenses & transfers.
The Budget also identifies estimated revenues to be derived from sources other than the retail water and sewer user rates. Such other revenue sources include interest earnings on investments, water meter sales and various other miscellaneous service charges. The revenues generated from the other sources are applied to the gross Revenue Requirements to reduce the amount of revenue required from user rates. The result is the net Revenue Requirement.
2.3.2 Capital Improvement Plan (CIP)
The City provided a list of anticipated capital projects to be funded over the Projection Period. These are also included in the development of the gross Revenue Requirements. The capital projects provided by and identified by the City in the CIP are required in order to maintain uninterrupted service to customers by investing in improvements, repairs, or replacements of aging system components as they wear over time. The City provided cost estimates for the identified capital projects by the fiscal year in which they are estimated to be undertaken for each system. The funding for these capital projects was then used in the analysis, along with O&M and non-operating expenses, to determine the gross revenue requirements for both the water and sewer systems. The capital projects included in the CIP, along with their assumed funding sources, for the Projection Period are provided in Tables 5 and 6.
Table 5 - Water CIP
Funding Fiscal Year Ending June 30.
Description
Source 2025 2026 2027 2028 2029
Waler projects
Chlorine Analyzer Cash $ $ $
New Clarifier and Filter System Cash :
Storage Tank Baffle Repairs Cash
Raw Water Reservoir Improvements Cash
Eastside Storage Tank Improvements Cash
Water Pipeline Replacement Cash 2,190,300 2,299,800 2,414,800 2,535,500 2,662,300 Water/Wastewater Rate Study Cash
Water Distribution Expansion Cash
Switch to Hypochlorine Cash -
Water Equipment Cash 262,500 275,600 289,400 303,900 319,100 Replacement of VFD Cash -
Repair Pumps at WTP, Reservoir Cash
Pump Replacement Schedule Cash 315,000 330,800 347,300 364,700 382,900 Total Water projects $ 2,767,800 $ 2,906,200 $ 3,051,500 $ 3,204,100 $ 3,364,300 9 | Page
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WHLOE CALIICHNIA AND MEA. CC MEE
Table 6 - Sewer CIP
Funding Fiscal Year Ending June 30.
Description Source 2025 2026 2027 2028 2029
Sewer projects
Lift Station No. 9 and 11 Rehab. Cash 6,826,100 $ $ $
UV Disinfection System Upgrade Cash
Laboratory Equipment Replacement Cash
Compactor, Bar Screen, Grit Chamber Cash
Cash 1,575,000 1,653,800 1,736,400 1,823,300 3,828,800
Sewer Manhole/Collection System
Lift Station No. 1 Replacement Cash
Wastewater Plant Expansion/Upgrade Cash/Debt 26,303,600 24,144,800 CCTV Inside/Sewer Collection Pipes Cash
Water/Wastewater Rate Study Cash
Wastewater Collection Master Plan Cash
Wastewater Equipment Cash 289,400 303,900 638,100
Total Sewer projecis $34,967,200 $26,074,200 $ 2,025,800 $ 2,127,200 $ 4,466,900
2.3.3 Debt Service
The City currently has outstanding debt for both the water and sewer utilities. A debt service coverage ratio of 1.20 times net revenue is required to be maintained on an annual basis, based on the City's current bond covenants. In simple terms, this means the utilities must have $1.20 in net operating revenues for every $1.00 of debt service they are committed to pay on existing debt. The debt service coverage is calculated by dividing net operating revenues (revenue less operations and maintenance expenses) by annual debt service.
Based on discussions with and guidance from City Staff, it is also anticipated that the City may issue additional debt during the Projection Period to provide funding for capital projects identified in the CIP. As previously discussed, a foundational step in the development of revenue requirements for the two utilities is the creation of detailed budgets and five-year projections, including funding of capital projects. Anticipated payments for existing and projected debt must be incorporated in this analysis. For this purpose, Willdan developed simple estimates of annual payments that would be anticipated to repay debt obligations associated with identified projects in the CIP. These estimates were created for budgeting and planning purposes only. It is important to note that Willdan is not acting as a municipal/financial advisor for the City in connection with this Rate Study, nor for the structuring of projected bond or debt offerings over the course of the Projection Period. We are not providing debt service schedules, asserting any commitment to issue debt or assist with debt issuance, or providing advice or guidance related to the structure and terms of projected debt. Please refer to Section 6.1.2 at the end of this report for a more comprehensive municipal advisory disclaimer. The annual existing and proposed debt payments over the Projection Period are provided in Table 7. 10 | Page
CALEXICO California
WHEDE CALECRNIA AND MEXICO MELT
Table 7 - Annual Debt Service Payments
Projected for Fiscal Year Ending June 30.
Description
2025 2026 2027 2028 2029
Water Annual Debt Service
Water Revenue Bonds $ 820,850 $ 822,350 $ 823,250 $ 823,550 $ 823,250 Water System Improvements - Future Debt ""
Total Water Annual Debt Service 820,850 822,350 823,250 $ 823,550 823,250 Sewer Annual Debt Service
Sewer Revenue Bonds 1,146,200 1,147,400 1,147,800 $ 1,147,400 1,151,100
1.268,000 1,268,000 1,268,000 1,268,000 1,268,000
$ 2,414,200 $ 2,415,400 $ 2,415,800 $ 2,415,400 $ 2,419,100 Total Annual Debt Service $ 3,235,050 $ 3,237,750 $ 3,239,050 $ 3,238,950 $ 3,242,350 Notes:
[l] All projected future debt service included in the analysis is for financial planning purposes only. Wildan is not structuring debt for the City or acting as the City's municipal advisor.
2.3.4 Gross and Net Revenue Requirement
The proposed water and sewer rates developed in the Report are designed for assumed implementation for FY 2024/25 (the Test Year as previously defined). The projected Test Year gross and net Revenue Requirements are estimated by utilizing the Budget, actual debt service requirements as provided in the applicable debt service schedules, capital estimates and assumed funding sources for capital projects as provided by the City, along with anticipated transfers. The Test Year Revenue Requirements that are used for developing the user rates proposed herein are detailed in Appendix A at the end of this report and summarized in Table 8.
Table 8 - Test Year Revenue Requirements - FY 2025
Description Water Wastewater Total
Total O&M $ 7,394,800 $ 4,918,222 $ 12,313,022
Debt Service 820,850 2,414,200 3,235,050
Other Expenditures & Transfers 734,009 1,419,858 2,153,867 Gross Revenue Requirement $ 8,949,659 $ 8,752,280 $ 17,701,939 Less Other Revenues (394,000) (394,000)
Net Revenue Requirement $ 8,555,659 $ 8,752,280 $ 17,307,939 The projected Revenue Requirements for the water and sewer systems over the entire Projection Period are provided in Tables 9 and 10.
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CALEXICO California
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Table 9 - Water Revenue Requirements for the Projection Period Projected for Fiscal Year Ending June 30,
Description 2026 2027 2028 2029
2025
Total O&M $ 7,394,800 7,706,817 $ 7,991.566 $ 8,315,438 $ 8,652,807 Existing Debt Service 820,850 822,350 823,250 823,550 823,250 Future Debt Service
Other Expenditures & Transfers 734,009 1,283,394 1,947,869 2,572,932 3,265,703 Gross Revenue Requirement $ 8,949,659 $ 9,812,561 $ 10,762,685 $ 11,711,920 $ 12,741,760 Less Other Revenues (394,000) (394,000) (394,000) (394,000) (394,000) Net Revenue Requirement $ 8,555,659 $ 9,418,5617 $ 10,368,685 $ 11.317,920 $ 12,347.760 Table 10 - Sewer Revenue Requirements for the Projection Period Projected for Fiscal Year Ending June 30,
Description 2025 2026 2027 2028 2029
Total O&M 4,918,222 $ 5,122,444 $ 5,299,705 $ 5,509,003 5,726,848 Existing Debt Service 1,146,200 1,147,400 1,147,800 1,147,400 1,151,100 Future Debt Service 1,268,000 1,268,000 1,268,000 1,268,000 1,268,000 Other Expenditures & Transfers 1,419,858 4,291,720 4,365,112 4,412,098 4,456,924 Gross Revenue Requirement $ 8,752,280 $11,829,564 $12,080,617 $12,336,501 $12,602,872 Less Other Revenues
Net Revenue Requirement $ 8,752,280 $11.829,564 $12,080,617$12,336,501 $12,602,872
2.4 Customers & Billable Flows
The rate study performed herein is heavily reliant upon a detailed analysis of system customers and accompanying usage and demand characteristics. The existing utility customer base and metered/billable flows provide the determinants utilized in the cost-of- service analysis, and ultimately in calculating the monthly user rates and charges, which become the foundation for projecting future revenues generated by the water and sewer systems.
It is important to note that the customer and flow analysis focuses primarily on the customer classifications that will be subject to and impacted by the user rates and charges to be developed in the Report. This consists of the general service (retail) customers that currently pay for utility services pursuant to the existing user rates and charges as previously detailed.
For the purposes of the rate study, it is these customers and their accompanying usage characteristics that will generate revenues based upon the proposed user rates and charges.
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CALEXICO California
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2.4.1 Customer Billing Analysis
For the rate study, detailed monthly billing information was provided for each individual customer. This data offered a breakdown of water and sewer customers by class, usage characteristics and billed charges. The historical billing data was queried from the City's electronic billing records. An analysis of the billing data was conducted to obtain an understanding of existing customers, customer classes, and metered usage per customer class. In accordance with the data, as well as discussions with the City staff, the utility system provides service to various identifiable retail customer classes consisting of:
• Single-Family Residential
• Multi-Family Residential
• Commercial/Non-Residential
• Government, and
• Schools.
Each of these customer classes embodies certain common characteristics in their utility use and service demand profiles that provide the basis for establishing an equitable allocation of system costs. The billing data was utilized to identify the number of customer accounts within each class, the applicable equivalent residential units (ERUs) based on meter size, the metered/billable usage profiles, and strength characteristics.
The historical customer data was also utilized to establish growth trends for each customer classification. The growth trends were then used to project the average number of customers within each class for the Test Year plus the remaining years of the Projection Period.
2.5 Financial Projections Under Existing Rates
The projected customers and accompanying billable flows are applied to the existing rates to develop a projection of user rate revenues that would be generated under existing rates.
The revenues are then compared to the projected revenue requirements/expenditures to determine if revenue adjustments are needed. Based on this comparison, it is projected that under the existing rates, neither the water nor sewer systems would meet their collective projected operating (0&M) financial obligations, debt service payment or coverage requirements, cover costs of capital projects, and be able to make transfers that are anticipated to be funded with cash reserves. Therefore, revenue increases are required to generate additional cash to fund projected costs of operations and capital projects, meet debt service requirements, and maintain adequate cash reserves. In addition, the City has established an objective of maintaining a target of at least 180 days of cash reserves to help fund ongoing operations in the event of periodic fluctuations in cash flow, and to address unexpected needs that may require cash funding. The cash-flow statements outlining the projected operating results under existing rates are summarized in Tables 11 and 12 for the water and sewer systems, respectively. The proposed rates and projected financial results are addressed in the subsequent sections of this Report. 13 | Page
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Table 11 - Water System Projected Operating Results Under Existing Rates Projected for Fiscal Year Ending June 30($1,000s)
Description Exisling Proposed
2026 2027 2028 2029
2025 2025
Revenues:
Water Sales $ 7,818 $ 7,818 $ 7,837 $ 7,848 $ 7,859 $ 7,870 Other Revenues 394 394 394 394 394 394
Total Revenues $ 8,212 8,212 $ 8,231 8,242 $ 8,253 $ 8,264 O&M Expenses (7,395) (7,395) (7,707) (7,992) (8,315) (8,653) Net income For Debt $ 817 $ 817 $ 524 $ 251 $ (62) $ (389) Debt Service:
Existing $ 821 $ 821 822 $ 823 $ 824 $ 823
Future
Total Debt Service 821 $ 821 $ 822 $ 823 $ 824 $ 823
Balance After Debf $ (3) S (3) $ (298) $ (573) $ (886) $ (1,212) Other Expendilures & Transfers:
Capital Outlay $ - $ - $ $ - $
Transfers In
Transfers Out
Total Other Expenditures & Transfers $ $ - $ - $ - $ - $ Net Resulls $ (3) $ (3) $ (298) $ (573) $ (886) $ (1,212) Fund Balance Aclivity:
Beginning Balance $ 3,205 $ 3,205 $ 3,202 $ 2,904 $ 2,331 $ 1,445 Deposit/ (Withdrawal) from Operations (3) (3) (298) (573) (886) (1,212) Deposit/(Withdrawl) from/(to) Capital Fund
Capital Projects From Capital Improvement Plan
Tolal Operating Fund Balance 3,202 3,202 $ 2,904 $ 2,331 $ 1,445 $ 233 DIF Fund
Beginning Fund Balance $ $ $ $
Annual Revenues 138 138 138 138 138 138
Net Transfers In/(Out) From Capital Fund (138 (138) (138) (138 (138) (138) Total DIF Fund Balance $ - $ - $ $ - $
Capital Fund
Beginning Balance $ 7,660 $ 7,660 $ 5,03l $ 2,263 650) $ (3,716) Net Transfers In/(Out) From Operating Fund
Net Transfers In/(Out) From DIF Fund 138 138 138 138 138 138 Cash Funded Capital Projects (2,768) (2,768) (2,906) (3,052) (3,204) (3,364) Total Capital Fund Balance 5,031 $ 5,031 $ 2,263 $ (650) $ (3,716) $ (6,942) Ending Fund Balance $ 8,233 $ 8,233 $ 5,167 1,681 $ (2,271) $ (6,708) Debt Coverage 1.00 1.00 0.64 0.30 0.00 0.00
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CALEXICO California
WHERE CALIFORNIA AND MEA CO MEE•
Table 12 - Sewer System Projected Operating Results Under Existing Rates Projected for Fiscal Year Ending June 30 (S1.000s)
Description Existing Proposed
2026 2027 2028 2029
2025 2025
Revenues:
Wastewater Sales $ 6,252| 6,252 $ 6,259 6,267 $ 6,275| $ 6,283 Other Revenues
Total Revenues 6,252 $ 6,252 6,259 6,267 6,275 6,283
O&M Expenses (4,918) (4,918) (5,122) (5,300) (5,509) (5,727) Net Income For Debt $ 1,333 1,333 $ 1,136 $ 967 $ 766| $ 557 Debt Service:
Existing $ 1,146 $ 1,146 $ 1,147 $ 1,148 $ 1,147| $ 1,151 Future 1,268 1,268 1,268 1,268 1,268 1,268
Total Debt Service $ 2,414 $ 2,414 $ 2,415 2,416 $ 2,415 $ 2,419 Balance Affer Debt 5(1,081) 1081) $ (1,279) $ (1,449) $ (1,650) $ (1,863) Olher Expenditures & Transfers:
Capital Outlay $ - $
Transters In
Transfers Out
Total Other Expenditures & Transfers $ $ - $ - S - $ - $ Net Results $ (1,081) $ (1,081) $ (1,279) $ (1,449) $ (1,650) $ (1,863) Fund Balance Activily:
Beginning Balance $ 3,374 $ 3,374 $ 2,294 $ 1,015 $ (434) $ - (2,084) Deposit/(Withdrawal) from Operations (1,081) (1,081) (1,279) (1,449) (1,650) (1,863) Deposit/(Withdrawal) from/(to) Capital Fund
Capital Projects From Capital Improvement Plan
Total Operating Fund Balance 2,294 $ 2,294 $ 1,015 $ 434) $ (2,084) $ (3,946) DIF Fund
Beginning Fund Balance $ - $ $
115 115 115 115 115 115
Annual Revenues
Net Transfers In/(Out) From Capital Fund (115) (115) (115) (115) (115) (115] Total DIF Fund Balance $ - - $ $ -
Capital Fund
Beginning Balance $ 33,717 $ 33,717 $ 10,069 $ (5,605) $ (7,516) $ (9,529) Net Transfers In/(Out From Operating Fund
Vet Transfers In/(Out) From DiF Func
Cash Funded Capital Project (23,762) (23,762) (15,789) (2,026 (2,127 Total Capital Fund Balance $ 10,069 $ 10,069 $ (5,605) $ (7,516) $ (9,529) $(13,881) Ending Fund Balance $ 12,363 $ 12,363 $(4,590) (7,950) S(11,612) S(17,827) Debt Coverage 0.55 0.55 0.47 0.40 0.32 0.23
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Section 3 - Cost-of-Service (COS) Analysis
3.1 General
In accordance with the American Water Works Association (AWWA) Manual Ml, the costs incurred in a water utility system are generally driven by specific service requirements imposed on the system by its customers. The primary service requirements that drive costs include annual flow volumes, peaking flow volumes (i.e., peak day, peak hour), the number of customers and the types of customers served. The water cost-of-service analysis performed for this rate study utilizes a common industry approach known as the base-extra capacity method. The sewer cost-of-service analysis involves an examination of flows, strength factors, the number and type of customers served in accordance with the California State Water Resources Control Board (SWRCB) Revenue Program Guidelines for Wastewater Agencies.
3.2 Water Cost-of-Service
The COS utilizes the revenue requirements for the Test Year as the cost basis. The Test Year revenue requirements as identified in the previous section of the Report are functionally unbundled, classified and allocated to customer classes to determine the proportionate cost of service by class. More detail relating to the water COS approach can be found in Appendix B.
3.2.1 Peaking Factors
System-wide peaking factors are used to derive the cost component allocation bases for Base (Delivery) and Max Day costs. Base represents average daily demand during the year, which has been normalized to a factor of 1.00. Based on data provided by City staff, the average water demand was 4.60 million gallons per day (MGD) and the Max Day water demand was 7.19 MGD in the most recent full year. The Max Day peaking factor shows that the system-wide Max Day demand is 1.56 (7.19 Max Day MGD divided by 4.60 Base Delivery) times greater than the average daily demand. The system-wide peaking factors are shown in Table 13.
The Max Day allocations are calculated as follows:
Base Delivery: 4.60 / 7.19 × 100% = 63.98%
Max Day: (7.19 - 4.60) / 7.19 × 100% = 36.02%
Table 13 - Peaking Factors System-Wide
Demand Factor Base Max Day Total
Description (MGD)
Avg Day 4.60 1.00 100.00% 0.00% 100.00%
Max Day 7.19 1.56 63.98% 36.02% 100.00%
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Max Day Customer specific peaking factors are then developed, based on the maximum monthly usage divided by average monthly usage for each customer class and tier. Since daily peaking statistics are not available for individual customer classes, the maximum month peaking factor from the customer/billing data is used as a proxy for the class-specific Max Day peaking factors. Using the customer billing data, peaking factors by customer class and tier were calculated as shown in Table 14.
Table 14 - Peaking Factors by Customer Class
Max Day
Description Peaking
Fator
Residential, Multi-Family Dwelling, And Aparments
All Flow 1.35
Commercial, Industrial/MFG, And Churches
All Flow 1.21
Commercial Irigation Only
All Flow 1.68
Schools
All Fiow 1.70
Government
All Flow 2.95
Construction/Ir Load
All Flow 3.07
Water For Resale
All Flow 1.35
Once peaking factors are determined, the Max Day demand of each customer class is calculated and shown in Table 15. Total annual usage is derived from the customer data and then converted to an average daily usage by dividing the total annual usage by 365 days in a year. Total Max Day capacity is developed by multiplying the customer-specific peaking factor (from Table 14) by the average daily usage to arrive at the total capacity required to meet each class's Max Day demand. The extra capacity required to meet Max Day demand is calculated by subtracting the average daily usage from the total required capacity for Max Day. The calculation of additional capacity to meet the Max Day demand for each customer class is shown in Table 15.
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CALEXICO (alifornia
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Table 15 - Usage and Extra Capacity
Flows Max Day
Average Total Additional
Description Total Annual Peaking Capacity Capacily
Daily Flow Factor
Flow (CCF) (CCF/Day) (CCF/Day)
(CCF)
Residential, Mulli-Family Dwelling, And Apartments 1.35 1,662 All Flow 1,725,162 4,726 6,388
Commercial, Industrial/MFG, And Churches
All Flow 166,989 458 1.21 553 95
Commercial Irrigation Only 1.68
All Flow 78,299 215 360 146
Schools
All Flow 79,392 218 1.70 370 152
Government
16,451 45 2.95 133 88
All ow
Construction/Tr Load
All Flow 592 2 3.07 5 3
Water For Resale
All Flow 1,254 3 1.35 2,47
Total 2,068,139 5,666!
3.2.2 Functional Unbundling of Revenue Requirements
The water system costs are unbundled into operating components consisting of Supply/Treatment, Transmission, Distribution, Customer, and Administration functions. These are the primary services provided by most water utility systems to its customers. A brief description of each component is as follows:
• Supply/Treatment - the costs associated with obtaining and converting raw water to potable water;
• Transmission - the costs associated with major pumping and large diameter line facilities that transmit potable water throughout the system at-large; • Distribution - the costs associated with smaller diameter lines that carry water to individual customer properties;
• Customer - the costs associated with metering, billing, and providing other services to customers (e.g., printing, delivering and collecting utility bills, recordkeeping, etc.);
• Administration - various overhead and other non-operating costs.
The allocation of the functionally unbundled revenue requirements for the Test Year are summarized in Table 16.
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Table 16 - Functionally Unbundled Cost Allocations
Test Year
Description 2025
Total O&M $ 7,394,800
Existing Debt Service 820,850
Future Debt Service 734,009
Other Expenditures & Iransters
Gross Revenue Requirement $8,949,659
Less Other Revenues (394,000)
Net Revenue Requirement $8,555,659
Functional Unbundled Revenue Requirement
Treatment $ 3,473,290
Transmission & Distribution 1,666,489
Pumping
Customer Service 143,170
Admin 2,111,851
Source of Supply
Transfers
Existing Bond DS 820,850
New Bond DS
CIP 2,767,800
Non-Rate Revenue (394,000)
Fund Balance "'] (2,033,791)
Total $8,555,659
Notes:
[I] Represents a transfer from reserves to provide funding for capital outlay and CIP costs.
3.2.3 Classification of Water System Costs
As previously addressed, the functionally unbundled water system revenue requirements are then classified using the base-extra capacity cost allocation method. Applying this methodology, costs are classified into the following categories:
• Base Costs - capital costs and O&M expenses associated with service to customers under average demand conditions. This category does not include any costs attributable to variations in water use resulting from peaks in demand. Base costs tend to vary directly with the total quantity of water used. • Maximum Day/Extra Capacity Costs - costs attributable to facilities that are designed to meet peaking requirements. These costs include capital and operating costs for additional plant and system capacity beyond that required for average usage. For the purposes of this analysis, the max/extra capacity costs are further separated into systemwide facilities and distribution facilities. • Customer Costs -costs associated with any aspect of customer service including billing, accounting, recordkeeping, and meter services. These costs are independent of the amount of water used and the size of the customer's meter and are not subject to peaking factors.
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As the name would indicate, using the base-extra capacity method, the costs are separated between those attributed to base capacity (and demand) and those attributed to extra capacity (and demand). Other components such as treatment, transmission and distribution are allocated based on flows and peaking factors. All customer service-related costs are allocated 100% to customer billing.
Based on discussions with City staff, the general makeup of the customer base is not expected to change, so it is anticipated that the allocation percentages and factors will not change materially during the Projection Period. However, it is important to note that COS analyses are based on the data at a specific point in time (i.e., the most recent fiscal year).
To the extent that weather conditions, economic conditions and customer usage characteristics change during the Projection Period, the cost allocators can be impacted.
The system-wide costs by service characteristic are shown in Table 17.
Table 17 - Classification of Unbundled Revenue Requirements Extra
Billing & Meters &
Component Base Capacity Total
Collection Services
Max Day
Treatment $ $ 2,222,133 1,251,157 $ 3,473,290
Transmission & Distribution 1,066, 182 600,307 1,666,489 Pumping -
Customer Service 143,170 143,170
Admin 2,111,851 2,111,851
Source of Supply
Transfers
Existing Bond DS 820,850 820,850
New Bond DS -
CIP 1,383,900 885,696 498,204 2,767,800
Capital Outlay
Non-Rate Rev & Fund Balance (31,646) (954, 145] (922,627) (519,373) (2,427,791) Total $ 111,524 $3,362,456 $3,251,384 $1,830,295 $8,555,659
3.2.4 Allocation to Customer Classes and Unit Cost
Development
The functionalized and classified revenue requirements are allocated to customer classes utilizing a unit cost approach as follows:
• Base Costs - Based on relative percentage of Base Annual Usage. • Maximum Day/Extra Capacity System Costs - Based on relative percentage of Extra Capacity for the entire system.
• Maximum Day/Extra Capacity Distribution Costs - Based on relative percentage of Extra Capacity for the distribution system. • Customer Costs - Based on relative percentage of Equivalent Residential Units (ERUs).
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CALEXICO California
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The units of service for each component of cost by customer class (if applicable) are provided in Table 18. The units of service consist of the number of accounts and/or units, ERUs, annual flows in 100 cubic feet and Max Day extra capacity. Accounts and/or units are based on the number of customers as provided in the customer data. ERUs are based on meter equivalencies in accordance with AWWA standards. For reference, Table 21, showing meter equivalency factors follows in the next section (3.2.5) of this report. Base is the total annual usage projected for the test year based on historical customer data. Max Day is the extra capacity demand result as previously developed in Table 15.
Table 18 - Units of Service
Accounts/ Base (CCF) Max Day
Description ERUS (CCF/Day)
Units
Residential, Multi-Family Dwelling, And Aparments 10,562 10,571 1,725,162 1,662 All Flow 1,725,162 1,662
Commercial, Industrial/Mfg, And Churches 475 1,456 166,989 95 All Flow 166,989 95
Commercial rigation Only 38 361 78,299 146
All Flow 78,299 146
Schools 43 414 79,392 152
All Flow 79,392 152
Government 24 101 16,451 88
All Flow 16,451 88
Consfruction/Tr Load 4 10 592 3
All Flow 592 3
Water For Resale 4 6 1,254 1
All Flow 1,254
Total 11,150 12,919 2.068,139 2,147
The revenue requirement for each cost component is divided by its respective unit of service to calculate a unit cost. The unit cost for each cost component is demonstrated in Table 19.
Table 19 - Cost Per Unit
Extra
Billing & Meters & Base Capacity Total
Description
Collection Services
Max Day
Total Revenue Requirement $ 111,524 $ 3,362,456 $ 3,251,384 $ 1,830,295 $ 8,555,659 Units of Service 11,150 12,919 2,068,139 2,147
Bills/Monthly ERU/Monthly CCF CCF/Day
Cost Per Unit 0.83 $ 21.69 | $ 1.57 852.29
Bills/Monthly ERu/Monthly CCF CCF/Day
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CALEXICO California
WHERE CALIFORNIA AND MEXICC MEL
The allocation of the revenue requirement to each customer class is determined by multiplying the Units of Service for each customer class (from Table 18) by the Cost per Unit for each cost component (from Table 19). The resulting total cost to be recovered from each customer class by cost component is shown in Table 20. To calculate the Account/Units and ERU Cost of Service by Customer Class, the monthly Units of Service from Table 18 are first multiplied by 12 to determine the total annual Accounts/Units and ERUs being served, then that result is multiplied by the Cost per Unit shown in Table 19. For the Base and Max Day Costs, the Units of Service from Table 18 are multiplied by the Costs per Unit from Table 19.
Table 20 - Cost of Service by Customer Class and Cost Component Accounts/ Max Day
Description ERUS Base (CCF) Total Costs
Units (CCF/Day)
Residential, Mulli-Family Dwelling, And Aparments S 105,642 $2,751,321 $2,712,179 $1,416,200 $6,985,343 All Flow $ 2,712,179 $ 1,416,200
Commercial, Industrial/Mig, And Churches $ 4,751 $ 379,053 $ 262,528 $ 81,348 $ 727,681 All Flow $ 262.528 $ 81,348
Commercial Inigation Only $ 380 $ 93,874 $ 123,096 $ 124,262 $ 341,612 All Flow $ 123,096 124,262
Schools $ 430 $ 107,755 $ • 124,815 $ 129,859 $ 362,859 All Flow 124,815 $ 129,859
Government $ 240 26,375 $ 25,863 $ 74,757 $ 127,235
All Flow $ 25,863 $ 74,757
Construction/Tr Load 40 $ 2,516 931 $ 2,857 $ 6,344
All Flow $ 931 $ 2,857
Water For Resale $ 40 $ 1,562 $ 1,971 $ 1,012 $ 4,585
All Flow $ 1,971 $ 1,012
Total 111,524 $ 3,362,456 $ 3,251,384 $ 1,830,295 $8,555,659
3.2.5 Rate Design by Unit Cost
The unit costs developed in the previous section are used to develop the proposed rates for the Test Year. The fixed rate components are based on accounts, ERUs and the allocated customer-related costs. The volumetric rate component is based on the annual usage and extra capacity requirements (Max Day).
The meter charge is calculated on an ERU basis. It is common practice in the utility rate- making industry to establish a rate structure that includes an incremented service availability charge (monthly meter charge, sometimes also called a fixed charge) such that customers placing a greater potential demand requirement on the system (those with larger meters) will pay proportionately more for the service availability component. 22 | Page
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WILHE CALIFCHNIA AND MEXICO MALI
The methodology for incrementing the availability charge is based upon standardized meter/capacity criteria established by the AWWA relative to the size and capacity of the water meter. The AWWA equivalent meter capacity criteria are commonly used to establish a standard unit of measure for customers referred to as an ERU. Based upon the established standards, an ERU is equal to one single-family residential connection with a 3/4-inch water meter (the typical standard meter size for a single-family residential customer). The applicable ERU factors for larger water meters are based upon the incremental increase in potential capacity of those meters as compared to the standard meter size. These factors are derived from actual flow testing results as performed and defined by the AWWA, and commonly utilized by the water and sewer utility industry. The AWWA equivalency factors can be applied to the meter charge for a 3/4-inch meter to calculate the applicable meter charges for each meter size.
While the service availability charge (fixed charge) may be incremented based upon standardized meter/capacity criteria established by the AWWA relative to the size and capacity of the water meter, this methodology was modified for single-family residential customers whose meter size is 1-inch or smaller. Due to California Residential Code section R313.2, automatic residential fire sprinkler systems that can produce a minimum of 30 gallons per minute (gpm) are required. Based on meter tests, 5/8-inch and 5/8x3/4-inch meters are only rated for approximately 20-25 gpm. Also, several manufacturers who produce 3/4-inch meters have indicated that those meters cannot meet the 30-gpm requirement. Therefore, 1-inch meters are now the new standard single-family residential meter being installed since these meters can meet the 30-gpm requirement under California Residential Code section R313.2. Since a 1-inch meter is required to meet the state requirement of 30 gpm for instantaneous fire suppression purposes, and not because a 1-inch single-family customer is truly placing more regular or recurring demand on the water system, relative to a 5/8-inch or 3/4-inch meter customer, these 1-inch single-family residential customers are assumed to place the same demand on the water system as a 5/8-inch or 3/4-inch residential customer.
As such, both the 3/4-inch and 1-inch meters are normalized with a factor of 1.00 as shown in Table 21. A full summary of the AWWA and single-family residential meter-size equivalency factors are provided in Table 21. The proposed monthly fixed charges for the Test Year are shown in Table 22.
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CALEXICO Calilornia
WHERE CALIFORNIA AND MEXICO MEE
Table 21 - AWWA & Single-Family Residential Meter Equivalency Factors Single-Family
Description AWWA Factors !!! Residential Factors 12)
Meter Size
3/4 Inch 1.00 1.00
1.0 Inch 1.67 1.00
1.5 Inch 3.33 3.33
2.0 Inch 5.33 5.33
3.0 Inch 10.00 10.00
4.0 Inch 16.67 16.67
6.0 Inch 33.33 33.33
8.0 Inch 53.33 53.33
10.0 Inch 76.67 76.67
Notes:
[1] Meter-size equivalency factors established by the AWWA and identified in AWWA Standards C700, MI and M22.
[2] Due to the fire supression requirements under California Residential | Code section R313.2, it is assumed that 3/4-inch and 1-inch single-family residential customers place the same demand on the system.
The second component of the fixed charge is the customer charge. Unlike meter-related costs, customer costs do not vary with meter size. Therefore, the monthly customer unit cost of $0.83 is applied equally to each account. The two fixed charge components are added together to develop the total proposed monthly fixed charge for each respective meter size.
The proposed monthly fixed charges for the Test Year are shown in Table 22. 24 | Pa ge
CALEXICO California
WHENE CALIFORHIA AND MEAICO MEE
Table 22 - Monthly Fixed Charge Calculation
Capacity Meter Customer Proposed
Meter Size "" Ratio Charge Charge Fixed Charge
General Service
3/4 Inch 1.00 $ 21.69 $ 0.83 $ 22.52
1.0 Inch 1.67 $ 36.15 $ 0.83 $ 36.98
1.5 Inch 3.33 $ 72.30 $ 0.83 $ 73.13
2.0 Inch 5.33 115.68 $ 0.83 $ 116.51
3.0 Inch 10.00 $ 216.90 $ 0.83 $ 217.73
4.0 Inch 16.67 $ 361.50 $ 0.83 $ 362.33
6.0 Inch 33.33 $ 723.00 $ 0.83 $ 723.83
Notes
[I] 3/4-inch and 1-inch single-family residential customers pay the 3/4-inch monthly "Meter Charge" of $21.69 plus the $0.83 "Customer Charge". All other customers pay the monthly "Proposed Fixed Charge" shown for their respective meter size.
The water volumetric rates are made up of two different rate components. The first component is for base usage and related costs. The second component represents peak usage and peaking costs (the Max Day cost component). The Max Day peaking costs for each customer class (from Table 20) are divided by the annual usage to calculate the peaking unit costs shown in Table 23.
Table 23 - Peaking Unit Cost Calculation
Peaking Annual Use Peaking Unit
Rate Class Costs (CCF) Cost
[A] [8] [C]=[A]/[B]
Residential, Multi-Family Dwelling, And Apariments
All Flow $ 1,416,200 1,725,162 $ 0.82
Commercial, Industrial/Mfg, And Churches
All Flow $ 81,348 166,989 $ 0.49
Commercial Irrigation Only
All Flow $ 124,262 78,299 $ 1.59
Schools
All Flow $ 129,859 79,392 $ 1.64
Government
All Flow $ 74,757 16,451 $ 4.54
Construction/Tr Load
All Flow $ 2,857 592 $ 4.83
Water For Resale
All Flow 1,012 1,254 $ 0.81
Total $ 1,830,295 2,068,139
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CALEXICO California
WHERE CALICHNIA AND MEXICO MEET
The peaking unit costs are then added to the base unit cost of $1.57 per 100 cubic feet as previously identified in Table 19 to calculate the proposed volumetric rates for each customer class and tier shown in Table 24.
Table 24 - Volumetric Rate Calculation
Proposed Tier
Base Peaking
Rate Class Rate (S/CCF) Differential
[A] [B] (C)=[A]+(B] [D]
Residential, Multi-Family Dwelling, And Apartments
All Flow $ 1.57 $ 0.82 $ 2.39 1.00
Commercial, Industrial/Mfg, And Churches
All Flow $ 1.57 $ 0.49 $ 2.06 1.00
Commercial Inigation Only
All Flow $ 1.57 $ 1.59 $ 3.16 1.00
Schools
All Flow $ 1.57 $ 1.64 $ 3.21 1.00
Government
All Flow 1.57 $ 4.54 $ 6.12 1.00
Construction/Tr Load
All Flow $ 1.57 $ 4.83 $ 6.40 1.00
Waler For Resale
All Flow $ 1.57 $ 0.81 $ 2.38 1.00
3.2.6 COS and Revenue Check
Once the rates are developed from the unit cost analysis, as shown in Sections 3.2.4 and
3.2.5, they are then applied to the customer service units identified in Table 18 above. The unit cost rates are applied to the customer service units to ensure that the rates calculated under the base-extra capacity method generate revenues from each customer class equitably and in a manner that reflects the costs associated with serving them. The revenues generated by customer class and the cost allocated to each customer class are provided in Table 25.
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CALEXICO California
WHERE CALIICRNIA AND MEXICC MEET
Table 25 - Proposed Rate Revenues vs COS
Monthly Total Fixed
Monthly Customer Monthly Meter Charge
Monthly ERUs Charge/ Charge/ERU
Accounts
Description Revenues
Account
[A1) [B1] [D1] +[81)(D1))*12
Residential, Mulli-Family Dwelling, And Apartments
All Fow 10,562 10,571 $ 0.83 $ 21.69 $ 2,856,963
Commercial, Industrial/Mfg. And Churches
All Flow 475 1,456 $ 0.83 $ 21.69 $ 383,804
Commercial Irigation Only
All Flow 38 361 $ 0.83 $ 21.69 $ 94,254
Schools
All Flow 43 414 $ 0.83 $ 21.69 $ 108,186
Government
All Flow 24 101 0.83 $ 21.69 $ 26,615
Construction/Tr Load
All Flow 10 0.83 $ 21.69 $ 2,556
Water For Resale
All Flow $ 0.83 $ 21.69 $ 1,602
Total 11,150 12.919 $ 3,473,980
Total Allocaled
Annual Use Proposed Total
Volumetric
Description (CCF) Rate ($/CCF) Revenues Costs
Revenues
[A2] [B2) [C2]=[A2]*[B2] [D2]=[E1]+[C2] (E2]
Residential, Multi-Family Dwelling, And Aparments
All Flow 1.725,162 $ 2.39 4,128,379 $ 6.985,343 $ 6,985,343 Commercial, Industrial/Mfg, And Churches
All Flow 166,989 $ 2.06 $ 343,877 $ 727,681 $ 727,681
Commercial Inigation Only
All Flow 78,299 $ 3.16 $ 247,358 $ 341,612 341.612
Schools
All Flow 79,392 $ 3.21 254,673 $ 362,859 $ 362,859
Goverment
All Flow 16,45l $ 6.12 $ 100,620 $ 127,235 127,235
Construction/Tr Load
All Flow 592 $ 6.40 $ 3,788 $ 6,344 $ 6,344
Water For Resale
All Flow 1,254 $ 2.38 $ 2,983 4,585 $ 4,585
Total 2,068,139 $ 5,081.679 $ 8.555,659 | $ 8,555,659
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CALEXICO California
WHERE CALITOHNIA AND MENICO MELI
3.3 Sewer Cost-of-Service
As with the water system, the COS analysis for the sewer utility utilizes the revenue requirements for the Test Year as the cost basis. The Test Year revenue requirements are functionally unbundled, classified and allocated to customer classes to determine the cost- of-service by class. More detail relating to the sewer COS approach can be found in Appendix C.
3.3.1 Functional Unbundling of Revenue Requirements
The sewer system costs are unbundled into Collection, Treatment, and Customer functions.
A brief description of each component is as follows:
• Collection -costs associated with lines and facilities that transport wastewater from customer properties to the plants for treatment;
• Treatment - costs associated with treating wastewater for disposal reclamation and/or discharge;
• Customer - costs associated with metering, billing, and providing other services to customers (e.g., printing, delivering and collecting utility bills, recordkeeping, etc.).
The allocation of the functionally unbundled revenue requirements for the Test Year are summarized in Table 26.
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CALEXICO California
WHERE AND MEA CO MEET
Table 26 - Functional Unbundled Cost Allocations
Test Year
Description 2025
Total O&M $ 4,918,222
Existing Debt Service 1,146,200
Future Debt Service 1,268,000
Other Expenditures & Transters 1,419,858
Gross Revenue Requirement $ 8,752,280
Less Other Revenues
Net Revenue Requirement $ 8,752,280
Funclional Unbundled Revenue Requirement
Treatment $ 2,525,170
Collection 838,963
Administration 1,459,329
Pumping
Customer Service 94,760
Transfers
CIP 23,762,497
Capital Outlay
Existing Bond DS 1,146,200
New Bond DS 1,268,000
Non-Rate Revenue
Fund Balance '!! (22,342,639)
Non-Rate Rev & Fund Balance $ 8,752,280
Notes:
[1] Represents a transfer from reserves to provide funding for capital outlay and CIP costs.
3.3.2 Classification of Revenue Requirements
The functionally unbundled revenue requirements for the sewer system are classified into fixed and volumetric customer components based on methodology consistent with the Water Environmental Federation (WEF), Manual of Practice No. 27. As discussed for the water COS analysis, it is anticipated that the allocation percentages will not change materially during the Projection Period. However, it is important to note that COS analyses are based on the data at a specific point in time (i.e., the most recent fiscal year). To the extent that weather conditions, economic conditions and customer usage characteristics change during the Projection Period, the cost allocators can be impacted. The system-wide costs by service characteristic are shown in Table 27.
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CALEXICO California
WHEDE CALIFORNSA AND MENICE MEET
Table 27 - Classification of Unbundled Revenue Requirements Customer Shength -
Volume Capacity Strength - SS Total
Component Service BOD
Treatment $ - 311,353 971,360 931,104 2,525,170
Collection 838,963
Administration 1,459,329 1,459.329
Pumping
Customer Service 94,760 94,760
Transfers
CIP 11,881,249 1,464,556 1,464,556 4,570,374 4,381,762 23,762,497 Capital Outlay
Existing Bond DS 1,146,200 1,146,200
New Bond DS 1,268,000 1,268,000
Non-Rate Rev & Fund Balance (L11,388,372) (1,577,455) (1,577,454) (3,981,903) (3,817,455) (22,342,639) Total | $ 4,461,166 $ 617,936 617,936 $ 1,559,831 | $ 1,495,411 | $ 8,752,280
3.3.3 Allocation to Customer Classes and Unit Cost
Development
The functionalized and classified revenue requirements are allocated to customer classes utilizing a unit cost approach as follows:
• Collection - Based on relative percentage of annual sewer usage; • Treatment - Based on relative percentage of sewer strength discharge (BOD and SS);
• Customer - Based on relative percentage of units by customer class.
The units of service for each component of cost by customer class (if applicable) are provided in Table 28. The units of service consist of the number of customer units, annual flows in 100 cubic feet, and sewer strength discharge. Customer units are based on the number of customers as provided in the customer data. Collection is the total annual sewer flows projected for the test year. BOD and SS reflect the strength per pound of the sewer discharge collected by the City from each customer class based on standards for wastewater discharge included in the State Water Resources Control Board Guidelines. 30 | Page
CALEXICO California
WHLDE CALICHNIA AND MEXICO MERT
Table 28 - Units of Service
Total CCF BOD BOD TSS TSS
Description
Customers Flow Factor!!! Pounds Factor !! Pounds
Residential Ciasses
Residential 7,228 1,439,818 200 1,796,409 200 1,796,409 Multi-Family Dwelling 2,133 128,904 200 160,829 200 160,829 Apartments 1,350 125,712 200 156,846 200 156,846
Sub-Total Residential 10,711 1,694,434 2,114,084 2,114,084 Non-Residential Classes
Commercial Rate II
Churches 23 4,987 200 8,319 200 8,319
Commercial 254 48,768 200 81,345 200 81,345
Government 9 8,100 130 8,782 100 6,755
Industrial/Mfg 2 144 200 240 200 240
Schools 39 60,372 130 65,455 100 50,350
Sub-Total COMMERCIAL RATE II 327 122,371 164,141 147,010 Commercial Rate III
Commercial 78 28,080 483 113,112 410 96,017
Industrial/MFG 3 684 483 2,755 410 2,339
Sub-Total COMMERCIAL RATE III 81 28,764 115,868 98,356
Commercial Rate IV
Commercial 88 70,752 950 560,568 810 477,958
Industrial/MFG 16 5,568 950 44,115 810 37,614
Sub-Total COMMERCIAL RATE IV 104 76,320 604,683 515,572 Sewer System Total 11,223 1,921,889 2,998,776 2,875,021 Notes:
[1] Average strength factors for BOD and TSS are based on the State Water Resources Control Board Revenue Program Guidelines, Appendix G.
The revenue requirement for each cost component is divided by its respective unit of service to calculate a unit cost. The unit cost for each cost component is demonstrated in Table 29.
Table 29 - Cost Per Unit
Customer Strength -
Descripton Volume Capacity Strength - SS Total
Total Revenue Requirement $ 4,461,166 $ 617,936 $ 617,936 1,559,831 1,495,411 $ 8,752,280 Units of Service 11,223 1,921,889 1,921,889 2,998.776 2,875,021 Units/Monthly CCF CCF Pounds Pounds
Cost Per Unit $ 33.13 $ 0.32 $ 0.32 $ 0.52 $ 0.52
Units/Monthly CCF CCF Pounds Pounds
The allocation of the revenue requirement to each customer class is based on the unit costs for each component multiplied by the units of service for each customer class. The total costs to be recovered from each customer class by rate component are shown in Table 30. 31 | Page
CALEXICO California
WHERE CALIFORNIA AND MENISO MELT
Table 30 - Cost of Service by Customer Class and Cost Component Strength -
Rate Class Customer Volume Capacity Strength - SS Total BOD
Residential $ 4,257,645 544,803 544,803 1,099,653 $ 1,099,618 $ 7,546,522 Commercial Rate I! 129,983 39,345 39,345 85,379 76,466 370,519 Commercial Rate I!! 32,198 60,269 51,159 162,122
Commercial Rate IV 41,340 24,539 24,539 314,530 268,169 673,117 Total $ 4,461,166 | $ 617,936 617,936 $ 1,559,831 | $ 1,495,411 | $ 8,752,280
3.3.4 COS and Revenue Check
Once the unit costs are developed and the costs associated with each customer class based on the units of service are determined in Section 3.3.3, rates can be developed to ensure that each customer class is generating sufficient revenues to cover their allocated cost of service. The proposed rate structure for the sewer rates are as follows:
• Residential Customers - For residential customers, the proposed rates will consist of only a flat monthly fixed charge based on the number of dwelling units. • Commercial/Non-Residential Customers - For commercial/non-residential customers, the proposed rates will consist of a monthly fixed charge and a volumetric rate per 100 cubic feet based on each customer class's respective sewer strength discharge (commercial rate II, III, and IV).
The revenues generated by customer class vs the cost allocated to each customer class are provided in Table 31.
Table 31 - Proposed Rate Revenues vs COS
Billable Total
Monthly Proposed Tolal Fixed Proposed Tolal
Annual Volumetric Tolal COS
Dwelling Monthly Fee Volumehic Calculated
Description Volume Rate Revenues
Units Fixed Fee Revenue Rate Revenues
(CCF) Revenues
[A] [B] [C]=[AI*[B]*12 [D] [E] [FI=[D|"(E] [G]=[C)+[F] (H] Residential 10,711 $ 58.71 $ 7,546,522 N/A N/A $ $ 7,546,522 $ 7,546,522 Commercial Rate !! 327 $ 33.13 $ 129,983 122,371$ 1.97 $ 240,536 $ 370,519 $ 370,519 Commercial Rate I!! 81 $ 33.13 $ 32,198 28,764$ 4.52 $ 129.925 $ 162,122 $ 162,122 Commercial Rate IV 104 $ 33.13 $ 41,340 76,320 3 8.28 1$ 631,776 $ 673,117 $ 673,117 Total 11,223 1 TS 7,750,043 227,455 $ 1,002,237 | $ 8,752,280 $ 8,752,280 32 | Page
CALEXICO California
WHERE CALICHNIA AND MENICO MEEI
Section 4 - Proposed Test Year Rates
4.1 General
The methodology used to calculate the recommended water and sewer rates proposed herein involves applying the projected customers and flows to the user rates developed in The preceding cost-of-service and rate analysis to calculate the estimated revenues (separately for water and sewer) that would be generated. Then, these projected revenues are compared to the estimated Test Year revenue requirements, and the water and/or sewer rates are adjusted on a percentage basis as necessary until the revenues generated are sufficient to meet the revenue needs of each utility system, respectively. In addition, there are other factors that must be considered in designing rates to satisfy the City's objectives. Such other rate considerations include, but are not limited to:
Sensitivity to existing customers - the proposed rates must consider the impact on existing customers and avoid putting an inequitable financial burden on any particular customer class.
2. Comparability with neighboring utilities - the proposed rates should consider the rates and charges applied to customers of neighboring utilities of relatively similar size for similar service.
3. Existing rate structure - the proposed rates must consider the logistics and cost/benefit implications of instituting changes to the existing rates and rate structure.
4. Economic development - the proposed rates must consider the potential for future development within the City's service area and ensure that the rates do not make it cost-prohibitive for future development.
The proposed rates developed herein utilize these considerations, as well as discussions with the City staff, professional judgment, and prior experience with comparable utility systems.
When reviewing potential rate structure options in conjunction with the need for additional revenues, it was determined that revenue adjustments are needed, and the existing rate structure needs to be adjusted based on the cost-of-service analysis.
In conjunction with the existing rate structure, the proposed water and sewer rates for the upcoming fiscal year are composed of two rate components consisting of a monthly fixed charge and a volumetric rate for both water and sewer. The proposed water and sewer rates for the Test Year are provided again in Tables 32 and 33, respectively. 33 | Page
CALEXICO California
WHERE CALIFOKNIA AND MERILE MEET
Table 32 - Proposed Monthly Water Rates
Description Rate
Monthly Fixed Charge:
Residential
First Dwelling Unit $ 22.52
Additional Dwelling Unit $ 22.52
All Other Customers
3/4 Inch $ 22.52
1.0 Inch $ 36.98
1.5 Inch 73.13
2.0 Inch 116.51
3.0 Inch $ 217.73
4.0 Inch $ 362.33
6.0 Inch $ 723.83
Volumetric Rates Per 100 Cubic Feet:
Residential $ 2.39
Commercial, Manufacturing and Industrial 2.06
Construction/Truck 6.40
Water for Resale $ 2.38
City/Government $ 6.12
Commercial Irrigation Only $ 3.16
Schools $ 3.21
34 | Page
CALEXICO California
WHERE CALIFCRNIA AND MENICO MLE
Table 33 - Proposed Monthly Sewer Rates
Description Rate
Monthly Fixed Charge:
Residential ""
First Dwelling Unit $ 58.71
Additional Dwelling Unit $ 58.71
Non-Residential
Non-Residential I| $ 33.13
Non-Residential III $ 33.13
Non-Residential IV 33.13
Volumetric Rales Per 100 Cubic Feet:
First Dwelling Unit $
Additional Dwelling Unit $
Non-Residential Il $
Non-Residential Ill $ 4.52
Non-Residential IV $ 8.28
Notes:
[1] All residential customers only pay a flat fee per dwelling unit, regardless of usage.
35 | Page
CALEXICO California
WHEE CAL AICE MEE
4.2 Typical Monthly Bill Comparison
In addition to
Figure 1
Bill Comparison @ Various Units of Flow reviewing the effect Combined Water & Sewer Bill that a change in the
rates will have on the
2,400
system revenues, it is
· 2,000 also important for City
M
1,600 utility management to
understand the
1,000
impact that a change
800
will have on the
400
existing customers.
0 Tables 34, 35 and 36
$20 $40 $60 $80 $100 $120 $140 provide a comparison
$-
• Proposed # Existing of several monthly bills
at various flow levels for water and sewer, as well as the combined utility bills under the existing and proposed rates. A graphical illustration of a bill comparison at various units of flow is provided in Figure 1 for a residential customer with both water and sewer service. It was determined after conducting a historical billing analysis that an average residential customer uses 1,600 cubic feet monthly. Based on the proposed rates, a typical City residential customer will experience an increase of $22.23 in their combined monthly water and sewer bill.
Table 34 - Residential Water Rate Impact
Monthly Monthly Charges $ Amount
Description Existing Proposed Difference
Flow
Residential
3/4 Inch & 1.0 Inch 18.66 22.52 3.86
3/4 Inch & 1.0 Inch $ 20.81 $ 24.92 4.11
3/4 Inch & 1.0 Inch 200 22.96 $ 27.31 4.35
3/4 Inch & 1.0 Inch 300 25.11 $ 29.70 4.59
3/4 Inch & 1.0 Inch 400 $ 27.26 $ 32.10 4.84
3/4 Inch & 1.0 Inch 500 $ 29.41 $ 34.49 5.08
3/4 Inch & 1.0 Inch 600 31.56 $ 36.88 5.32
3/4 Inch & 1.0 Inch 700 33.71 $ 39.27 5.56
3/4 Inch & 1.0 Inch 800 $ 35.86 $ 41.67 $ 5.81
3/4 Inch & 1.0 Inch 1,000 $ 40.16 $ 46.45 6.29
3/4 Inch & 1.0 Inch 1,200 $ 44.46 $ 51.24 6.78
3/4 Inch & 1.0 Inch 1,400 $ 48.76 $ 56.03 7.27
3/4 Inch & 1.0 Inch 1,600 53.06 $ 60.81 7.75
3/4 Inch & 1.0 Inch 2,000 61.66 $ 70.38 8.72
3/4 Inch & 1.0 Inch 2,400 $ 70.26 $ 79.96 9.70
36 | Page
CALEXICO California
WHENE CALIFERNIA AND MEXICO MEET
Table 35 - Residential Sewer Rate Impact
Monthly Monthly Charges $ Amount
Description
Flow Existing Proposed Difference
Residential
3/4 Inch & 1.0 Inch 0 $ 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 100 $ 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 200 $ 44.23 58.71 $ 14.48
3/4 Inch & 1.0 Inch 300 44.23 58.71 $ 14.48
3/4 Inch & 1.0 Inch 400 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 500 $ 44.23 58.71 $ 14.48
3/4 Inch & 1.0 Inch 600 $ 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 700 $ 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 800 $ 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 1,000 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 1,200 $ 44.23 58.71 $ 14.48
3/4 Inch & 1.0 Inch 1,400 44.23 58.71 $ 14.48
3/4 Inch & 1.0 Inch 1,600 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 2,000 44.23 $ 58.71 $ 14.48
3/4 Inch & 1.0 Inch 2,400 44.23 $ 58.71 $ 14.48
Table 36 - Residential Combined Rate Impact
Monthly Monthly Charges S Amount
Description
Flow Existing Proposed Difference
Residential
3/4 Inch & 1.0 Inch 0 $ 62.89 81.23 $ 18.34
3/4 Inch & 1.0 Inch 65.04 83.63 $ 18.59
3/4 Inch & 1.0 Inch 67.19 $ 86.02 18.83
3/4 Inch & 1.0 Inch $ 69.34 $ 88.41 19.07
3/4 Inch & 1.0 Inch 400 $ 71.49 $ 90.81 19.32
3/4 Inch & 1.0 Inch 500 $ 73.64 $ 93.20 $ 19.56
3/4 Inch & 1.0 Inch 600 $ 75.79 95.59 $ 19.80
3/4 Inch & 1.0 Inch 700 $ 77.94 97.98 20.04
3/4 Inch & 1.0 Inch 800 $ 80.09 100.38 20.29
3/4 Inch & 1.0 inch 1,000 $ 84.39 $ 105.16 $ 20.77
3/4 Inch & 1.0 Inch 1,200 $ 88.69 $ 109.95 $ 21.26
3/4 Inch & 1.0 Inch 1,400 $ 92.99 $ 114.74 $ 21.75
3/4 Inch & 1.0 Inch 1,600 97.29 119.52 $ 22.23
3/4 Inch & 1.0 Inch 2,000 105.89 $ 129.09 $ 23.20
3/4 Inch & 1.0 Inch 2,400 $ 114.49 $ 138.67 $ 24.18
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CALEXICO California
WELDE CA FORNIA AND MEXICO MEE
4.3 Rate Comparison with Other Utilities
In order to provide the City with additional insight regarding the proposed rate levels, the analysis includes a comparison of both the existing and proposed user rates relative to the user rates imposed by other water and sewer utility systems located in same region. A summary analysis is provided comparing the cost of monthly water and sewer service for a typical residential customer (assumed to have a 3/4-inch or 1-inch water meter) calculated under the existing and proposed rates of the City with those of the other utilities. The rates utilized for the other neighboring utilities shown were in effect as of January of 2024 and are exclusive of local taxes, outside surcharges, franchise fees, regulatory fees, or other rate adjustments. A summary comparison with other utilities for a residential customer using 1,600 cubic feet per monthly billing is illustrated in Figure 2.
Figure 2
Neighboring Utility Comparison
Combined Water & Sewer Bill
$250.00
Assumes an inside residential customer receiving 1,600 CF $218.58 (or = 12,000 Gallons) of service per month.
$200.00
$151.29
$150.00 $138.98
$127.64 $122.20 $125.30 $126.77
$119.52 m.
$107.35
$97.29 $98.38
$100.00
$59.90
$50.00
La Quinta, CA Calexico Existing Holtille, CA El Centro, CA Calexico Proposed Blythe, CA Brawley, CA Heber, CA Twentynine Palms, CA Imperial, CA Westmorland, CA Monthly Water Bill@1600 Cubic Feet Monthly Wastewater Bill @1600 Cubic Feet — Average Monthly Bill 38 | Page
CALEXICO California
WHEPE CALICRNIA AND MEXICO MELT
It should be noted that when making comparisons for water and sewer service, several factors affect the level of rates and charges. Such factors may include:
1) Terms of wholesale service agreements;
Time since last rate update for comparison providers;
co Level of treatment required before the distribution of water to the ultimate customers;
4) Level of treatment and effluent disposal methods of sewer service; Anticipated capital improvement programs and capital financing methods; Plant capacity utilization, age of facilities, and assistance in construction by federal or state grants, connection fees, developer contributions, etc.; 7) General Fund and/or administrative fee transfers made by other systems which may account for differences in the level of rates charged; and Bond covenants and funding requirements of the rates.
For the utilities included in the rate comparisons, no analysis has been performed with consideration of the above-mentioned factors as they relate to the reported water and sewer rates currently being charged.
!
39 | Page
CALEXICO California
MeXICO MEE
Section 5 - Projected Operating Results
5.1 General
As a conclusion to the study, individual proforma operating statements are developed for both the water and sewer systems. The statements summarize the projected financial results based on the system revenues, expenses and other revenue requirements anticipated in future years.
The individual operating statements cover the 5-fiscal year Projection Period through June 30, 2029, and are prepared on a cash-flow basis. In addition, the individual statements include the applicable annual percentage rate adjustments necessary to meet the projected revenue requirements. The annual rate adjustments are considered separately for both water and sewer and further separated by the fixed charge and volumetric rate components. The following discussions describe the development of the major components of the projected operating results.
5.2 Projected User Rate Revenues
The user rate and charge revenues are estimated by applying the existing and proposed rates to the projected customers and flows. The revenues for the Projection Period are estimated separately for both water and sewer. The resulting revenues are then compared to the projected revenue requirements (i.e., O&M expenses, debt service, capital outlay, transfers, etc.) in each fiscal year to determine if the revenues are sufficient to satisfy the expenditure needs of the system. To the extent that there are revenue shortfalls in any given year of the Project Period, the water and/or sewer rates developed from the Cost-of-Service and Rate analysis outlined in Section 3 of this report are adjusted on a percentage basis as necessary to generate the required level of revenues. The projected water, sewer and combined user rate revenues are provided in Table 37.
Table 37 - Projected User Rate Revenues
Existing Proposed Projecled Fiscal Year Ending June 30.
System
Total Water Revenue $ 7,818,248 $ 8,555,659 $ 9,418,561 $10,368,685 $11,317,920| $12,347,760 Total Sewer Revenue $ 6,251,627 $ 8,752,280 $11.829,564 $12,080,617 $12,336,501 $12,602,872 Total Combined Revenue $14,069,875 $17,307,939$21,248,125 | $22,449,302 $23,654,421 $24,950,632 40 | Page
CALEXICO California
WHERE CALIIGRNIA AND MEXICO MEET
The projected revenues include the annual water and sewer rate adjustments anticipated for the remaining years of Projection Period beyond the Test Year. The proposed user rates from which the projected operating results are developed for the entire 5-fiscal year Projection Period are provided in Tables 38 and 39. The rates identified in the tables reflect the cost of providing service to individual customer classes based on peaking factors, volume of flow, and strength characteristics.
Table 38 - Proposed Monthly Water Rates
Existing Projected For Fiscal Year Ending June 30:
Description Rates 2025 2026 2027 2028 2029
Monthly Fixed Charge:
Residential
18.66 22.52 24.77 27.24 29.70 $ 32.38
First Dwelling Unit
Additional Dwelling Unit 9.33 24.77 27.24 29.70 $ 32.38 All Other Customers
20.69 22.52 $ 24.77 27.24 $ 29.70 $ 32.38
3/4 Inch $
$ 34.55 36.98 $ 40.67 44.74 48.78 53.18
1.0 Inch
68.90 73.13 80.43 88.47 $ 96.45 105.16
1.5 Inch
$ 110.27 116.51 128.14 140.94 153.67 167.53
2.0 Inch
$ 220.75 217.73 $ 239.47 263.38 287.16 313.07
3.0 Inch
$ 344.88 362.33 $ 398.50 438.30 477.87 520.99
4.0 Inch
689.55 723.83 $ 796.08 $ 875.59 $ 954.63 $ 1,040.77
6.0 Inch
Construction Truck $ 110.86 Will now pay based on respeclive meter size.
Water for Resale $ 110.91 Will now pay based on respective meter size.
Volumetric Rates Per 100 Cubic Feel:
$ 2.15 2.39 $ 2.63 $ 2.89 $ 3.15 3.43
Residential
3.45 $ 2.06 $ 2.26 2.49 $ 2.71 2.95
Commercial, Manufacturing and Industrial $
8.18 6.40 7.03 $ 7.73 8.42 9.17
Construction/Truck
11.76 2.38 2.61 $ 2.87 3.13 $ 3.41
Water for Resale $
3.45 6.12 6.72 $ 7.39 8.05 8.77
City/Government
6A G4 GA 3.45 3.16 3.47 3.82 4.16 $ 4.53
Commercial Irrigation Only
3.45 3.21 3.53 $ 3.87 4.22 $ 4.60
Schools
41 | Page
CALEXICO California
WHERE CALIECRNIA AND MEXICO MEL
Table 39 - Proposed Monthly Sewer Rates
Existing Projected For Fiscal Year Ending June 30:
Description 2025 2028 2029
Rates 2026 2027
Monthly Fixed Charge:
Residential" Per Dwelling Unit
44.23 58.71 $ 79.26 $ 80.85 $ 82.47 $ 84.12
First Dwelling Unit
Additional Dweling Unif 22.11 58.71 $ 79.26 $ 80.85 $ 82.47 84.12 Non-Residential Per Account
Commercial Rate lI 41.22 33.13 $ 44.72 $ 45.62 | $ 46.53 $ 47.46 Commercial Rate Ill 46.45 33.13 44.72 $ 45.62 $ 46.53 $ 47.46 Commercial Rate IV 51.56 $ 33.13 44.72 $ 45.62 $ 46.53 47.46 Volumetric Rates Per 100 Cubic Feet:
First Dwelling Unit $ - - $ - -
6A GA
Additional Dwelling Unit $ $
LA GA $ 2.81
Commercial Rate Il $ 4.12 1.97 2.65 2.70 2.75
Commercial Rate Ill $ 4.64 $ 4.52 $ 6.09 6.20 6.32 6.46 Commercial Rate IV 5.15 8.28 $ 11.16 $ 11.37 $ 11.58 11.83 Notes:
[U] All residential customers only pay a flat fee per dwelling unit, regardless of usage.
The projected user rates provided herein for the periods beyond the Test Year are intended for strategic planning purposes, and to provide the City with the estimated future rates that may be needed to satisfy the projected cash flow requirements. The rates are developed in accordance with the assumed customer, flow, expenditure, and revenue estimates projected in this rate study. It is important to note that, since it is necessary to utilize numerous assumptions to develop the projected operating results, to the extent that actual customers, flows and/or system expenditures differ from those assumed herein, additional rate adjustments may be required. For informative purposes, a calculation of the typical monthly bill for a representative City residential customer based on the projected rates, as well as the accompanying change in the monthly bill for each year of the Projection Period is included herein. An illustration of the projected typical bill rate path is provided in Figure 3. 42 | Page
CALEXICO California
WHERE CALIIOKNIA • AND MEXICO MIE!
Figure 3
Projected 5-Year Bill Path
@ 1,600 Cubic Feet Per Month
$180
$160 $171.38
$162.57
$140 $154.33
$146.11
$120
$119.52
$100
$97.29
$80
$60
$40
$20
Existing 2025 2026 2027 2028 2029
• Water •Sewer
5.3 Debt Service Coverage
The water and sewer operating statements also include a calculation of the annual debt service coverage. Debt service coverage is generally viewed as an indicator of the financial strength of the utility. The debt service coverage ratio is broadly calculated by dividing the net revenues by the annual debt service requirement. For the purposes of the debt service coverage calculation developed herein, the net revenues consist of the total operating revenues (user rate revenues plus other revenues) less the O&M expenses. In accordance with the requirements of the outstanding loan agreements, the City must maintain coverage of at least 120% (1.20 times) of the annual debt service payment. The pro-forma operating statements indicate that the water and sewer systems are expected to meet or exceed the minimum level of debt service coverage in each fiscal year of the Projection Period. It is important to note that the coverage results are provided for informative purposes only and are not intended as a legally supportable calculation for representation to bondholders. The debt service coverage for the water and sewer enterprise systems respectively over the projection period is provided in Table 40.
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CALEXICO California
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Table 40 - Water and Sewer Utility System Projected Debt Service Coverage Water Enterprise Sewer Enterprise
Fiscal Year
Projected Minimum Projected Minimum
2025 1.89 1.20 1.59 1.20
2026 2.56 1.20 2.78 1.20
2027 3.37 1.20 2.81 1.20
2028 4.12 1.20 2.83 1.20
2029 4.97 1.20 2.84 1.20
5.4 Summary of Projected Operating Results
The cash-flow statements outlining the projected operating results are summarized in Tables 41 and 42 for the water and sewer systems, respectively. The projected results are graphically illustrated in Figure 4 for the water and sewer systems, respectively. The results demonstrate that the proposed rates and charges along with the other system revenues are anticipated to be sufficient to satisfy the projected revenue requirements and capital needs for each respective utility system.
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CALEXICO California
WHEDE CALIFCRNIA AND MEXICO MEET
Table 41 - Water System Projected Operating Results
Projecled for Fiscal Year Ending June 30 ($1.0005
Description Existing Proposed 2029
2026 2027 2028
2025 2025
Revenues:
Water Sales $ 7,818 $ 8,556 $ 9,419 $ 10,369 $ 11,318 $ 12,348 Other Revenues 394 394 394 394 394 394
Tofal Revenues 8,212 8,950 9,813 $ 10,763 11,712 $ 12,742 (7,395) (7,395) (7,707) (7,992 (8.315] (8,653)
O&M Expenses
Net Income For Debt $ 817 $ 1,555 $ 2,106 2,771 3,396 4,089 Debl Service:
Existing $ 821 $ 821 $ 822 $ 823 $ 824 $ 823
Future
Total Debt Service $ 821 $ 821 $ 822 $ 823$ 824 823
Balance After Debt $ (3) $ 734 $ 1,283 1,948 S 2,573 $ 3,266 Olher Expenditures & Transfers:
Capital Outlay $ $ $ $ $ - $
Transfers In
Transfers Out
Total Other Expenditures & Transfers $ $ $ - $ - $
Net Resulls (3) $ 734 $ 1,283 $ 1,948 $ 2,573 $ 3,266
Fund Balance Activily:
Operating Fund
Beginning Bolance $ 3,499 3,499 $ 3,647 $ 3,801 $ 3,941 $ 4,101 Deposit/(Withdrawal] from Operations (3) 734 1,283 1,948 2,573 3,266 Deposit/(Withdrawall) from/(to) Capital Fund 151 (586) (1,130 (1,807) (2,413) (3,099) Capital Projects From Capital Improvement Plan
Tofal Operating Fund Balance 3,647 3,647 $ 3,801 3,941 4,101 $ 4,267 DIF Fund
Beginning Fund Balance $ $ $ $ $
Annual Revenues 138 138 138 138 138 138
Net Transfers In/(Out) From Capital Fund (138) (138) (138) (138) (138 (138) Total DIF Fund Balance $ S $ $ $
Capital Fund
Beginning Bolance $ 7,367 $ 7,367 $ 5,324 $ 3,685 $ 2,579 $ 1,927 Net Transfers In/(Out) From Operating Fund (151) 586 1,130 1,807 2,413 3,099 Net Transfers In/(Out) From DIF Fund 138 138 138 138 138 138 Cash Funded Capital Projects (2,768) (2,768) (2,906) (3,052) (3.204) (3,364) Total Capital Fund Balance 4,586 $ 5,324 $ 3,685 $ 2,579 $ 1,927 $ 1,800 Ending Fund Balance $ 8,233 $ 8,970 $ 7,486 $ 6,520 $ 6,028 $ 6,067 Debt Coverage 1.00 1.89 2.56 3.37 4.12 4.97
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CALEXICO California
WHERE CALIFOKNIA AND MENISC MEE
Table 42 - Sewer System Projected Operating Results
Projected for Fiscal Year Ending June 30 ($1.000s)
Description Existing Proposed
2026 2027 2028 2029
2025 2025
Revenues:
Wastewater Sales $ 6,252 8,752 $ 11,830 $ 12,081 $ 12,337 $ 12,603 Other Revenues
Total Revenues $ 6,252 $ 8,752 $ 11,830 $ 12,081 $ 12,337 $ 12,603 4,918 (4,918) (5,122) (5,300) (5,509) (5,727)
O&M Expenses
Net Income For Debt $ 1,333 $ 3,834 $ 6,707 6,781 $ 6,827 $ 6,876 Debt Service:
Existing 1,146 1,147 1,148 1,147 1,151
Future 1,268 1,268 1,268
Total Debt Service $ 2,414 2,414 $ 2,415 $ 2,416 $ 2,415 $ 2,419 Balance After Debt $ (1,081) $ 1,420 $ 4,292 $ 4,365 $ 4,412 $ 4,457 Other Expenditures & Transfers:
Capital Outlay - $ - $ - $ - $
Transfers In
Transfers Out
Total Other Expenditures & Transfers $ - $ - $ - $ - $ - $ Net Results $ (1,081) $ 1,420 $ 4,292 $ 4,365 $ 4,412| $ 4,457 Fund Balance Activily:
Operating Fund
Beginning Balance $ 2,328 $ 2,328 $ 2,425 $ 2,526 $ 2,614 $ 2,717 Deposit/(Withdrawal) from Operations (1,081) 1,420 4,292 4,365 4,412 4,457 Deposit/(Withdrawal) from/(to) Capital Fund 1,179 (1,322) (4,191) (4,278) (4,309) (4,349) Capital Projects From Capital Improvement Plan $ 2,425 $ 2,425 $ 2,526 S 2,614 S 2,717 $ 2,824 Total Operating Fund Balance
DIF Fund
Beginning Fund Balance $ - $ - $ - $ - $ $
115 115 115 115 115 115
Annual Revenues
Net Transfers In/(Out) From Capital Fund (115) (115) (115) (115) (115) (115) Total DIF Fund Balance $ - $ - $
Capital Fund
Beginning Balance $ 34,764 $ 34,764 $ 12,438 $ 955 $ 3,321 $ 5,618 Net Transfers In/(Out) From Operating Fund (1,179) 1,322 4,191 4,278 4,309 4,349 Net Transfers In/(Out) From DIF Fund 115 115 115 115 115 115 Cash Funded Capital Projects (23,762) (23,762) (15,789) (2,026) (2,127) (4,467) $ 9,938 $ 12,438 $ 955 $ 3,321 $ 5,618 $ • 5,615
Total Capital Fund Balance
Ending Fund Balance $ 12,363 $ 14,864 $ 3,481 $ 5,935 $ 8,335 $ 8,439
1.59 2.78 2.81 2.83 2.84
Debt Coverage 0.55
46 | Page
CALEXICO California
WHERE CALICHNIA AND MEXICO MI
Figure 4
Projected Operating Results Under Proposed Rates ($1,000s) $10,000
$8,000
$6,000
$4,000
$2,000
$O
$2,000
Existing Proposed 2026 2027 2028 2029
2025 2025
- Water •Wastewater -Combined
47 | Page
CALEXICO California
WHERE CALIIORNIA AND MEXICO MEE
Section 6 - Conclusions and Recommendations
6.1 Disclaimers
6.1.1 General Disclaimer
In the development of the proposed user rates and charges, certain historical reviews and analyses have been performed, together with the application of assumptions based on prudent financial, operational, and ratemaking relationships. The cost criteria and customer usage characteristics associated with general ratemaking procedures are representative of averages and are not intended as indicators of any individual customer.
In the preparation of the rate study, certain assumptions have been made with respect to conditions that may occur in the future. While it is believed that these assumptions are reasonable for the purpose of this update, they are dependent upon future events and actual conditions may differ from those assumed. In addition, the study has used and relied upon certain information that was provided by other parties not associated with Willdan.
Such information includes, among other things, the City's audited financial statements, annual operating budgets, periodic reports, and other information and data provided by the City, its independent auditors, and other sources. While the sources are believed to be reliable, there has been no independent verification of the information, and no assurances are offered with respect thereto. To the extent that future conditions differ from those assumed herein or provided by others, the actual results may vary from those projected.
6.1.2 Municipal Advisory Disclaimer
Unless the City of Calexico, California (the "City") has a written engagement from Willdan Financial Services ("Willdan") for municipal advisory services, Willdan is not advising or recommending any action be taken by the recipient of this information with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms and other similar matters concerning such financial products or issues). The City shall discuss any such information and material contained in Willdan's work product with any and all internal and/or external advisors and experts, including its own municipal advisor, that it deems appropriate before acting on the information and material.
For the avoidance of doubt and without limiting the foregoing, in connection with any revenue projections, cash-flow analyses, feasibility studies and/or other analyses Willdan may provide the City with respect to financial, economic or other matters relating to a prospective, new or existing issuance of municipal securities of the City, (A) any such projections, studies and analyses shall be based upon assumptions, opinions or views (including, without limitation, any assumptions related to revenue growth) established by the City, in conjunction with such of its municipal, financial, legal and other advisers as it deems appropriate; and (B) under no circumstances shall Willdan be asked to provide, nor shall it 48 | Page
CALEXICO California
WHESE CALIFORNIA AND MERICO MEET
provide, any advice or recommendations or subjective assumptions, opinions or views with respect to the actual or proposed structure, terms, timing, pricing or other similar matters with respect to any municipal financial products or municipal securities issuances, including any revisions or amendments thereto.
6.2 Conclusions
As previously addressed, the purpose of this study is to provide a review of the City's existing utility rates to determine if rate adjustments are necessary to meet the budgeted and/or projected financial needs in future years. This Report is the result of the collaborative efforts of representatives from both the City and Willdan. City staff were diligent and cooperative in their efforts to ensure the availability and quality of source data on financial and operating matters. Based on the reviews, analyses and assumptions discussed herein, it is concluded that:
1. The proposed user rates and charges are anticipated to generate sufficient revenues to meet the revenue requirements of the system based upon the projected expenditures, transfers, customers, and billable flows estimated for the Test Year. The proposed rates are based on an assumed implementation date of July 1, 2024 (or other such date as determined by the City). To the extent that the implementation date is postponed, additional rate adjustments and/or appropriations from existing reserves may be necessary.
2. The estimated revenues and resulting rate adjustments for the remaining years of the Projection Period beyond the Test Year are developed based on the customer growth assumptions generated from the historical analyses and discussions with City staff. If the customer growth projections are not realized, additional rate adjustments may be necessary.
3. Customer growth for the water and sewer systems is projected based on historical customer data as provided by the City as well as discussions with the City staff regarding developer activity and anticipated construction. If it turns out that the customer growth assumptions are not realized, the resulting revenues could be different than projected.
4. The projection of billable water and sewer flows is based on historical trends regarding the average flow per user for each customer class. The average water and sewer flow per account is developed from historical customer data and is assumed to remain relatively constant for the Projection Period. The historical billing data provided by the City was utilized to identify the average flow statistics for system customers. For the analyses developed herein, it is assumed that the average usage statistics for the Projection Period will be consistent with recent historical average usage levels as realized in recent years, or as otherwise assumed based on discussions with staff. When applying the estimated average usage statistics, it is assumed that the water and sewer 49 | Page
CALEXICO California
WHERE CALIFCRNIA AND MEXICC MEET
sales will increase with the estimated growth in customers. However, it is important to note that annual variations in rainfall and other climatological factors may influence the level of future water demands and the accompanying billable sewer flows for the City.
5. Future capital improvement projects are assumed to occur as reported by the City in its CIP. To the extent that the timing of such projects may change from that estimated herein, the cost of such projects and resulting impact on future rates and charges may vary from those indicated.
6. The proposed rates and rate structure are consistent with industry standards for rate-setting practices, comply with Proposition 218 and conform to the City's financial policies with respect to:
a. Equitably recovering costs;
b. Being based upon the proportionate cost of providing services; and c. Generating sufficient revenue to recover system revenue requirements, meet debt service coverage requirements, fund capital needs, and meet reserve requirements.
6.3 Recommendations
Based on the reviews, analyses and assumptions addressed herein, as well as the resulting conclusions provided above, it is respectfully recommended that the City:
Adopt the proposed water and sewer rates.
2. Enact the proposed rates to become effective as of July 1, 2024 (or other such date as determined by the City). Based on the timing of the project and the required public hearing notice procedures, it is expected that the effective date will occur on the recommended date.
3. Readdress the cost-of-service analysis portion of this study every three to five years to ensure costs are recovered consistent with cost-of-service principles and customer characteristics.
We appreciate the opportunity to be of service to the City in this engagement. In addition, we would like to thank City staff for the valuable assistance provided during the completion of the rate study.
Respectfully Yours,
WILLDAN FINANCIAL SERVICES
50 | Page
APPENDIX
DETAIL FOR THE COMPREHENSIVE WATER &
SEWER UTILITY RATE STUDY
CALEXICO California
COMPREHENSIVE WATER & SEWER UTILITY RATE STUDY FOR THE
CITY OF CALEXICO, CALIFORNIA
M WILLDAN
APPENDIX A
Revenue Requirement
from User Rates
APPENDIX - A
CITY OF CALEXICO, CA
Development of Rate Revenue Requirements
CHA BI EJ-[A]*[D]
Test Year for Rate Revenue Requirement
Line No: Description FY 2025 % to Water Water % to Sewer Sewer Total Operating Revenues $ 17,701,939 8,949,659 8,752,280 Other Operating Revenues
Other Water/Wastewater Fees 284,000 100% 284,000 0%
Other Water/Wastewater Fees 110,000 100% 110,000 0%*
Transfer-Debt-Bonds 100% 0%*
Transfer In - Bonds 0% 100%
Transfer-Debt-Leases 0% 100%
Transfer-Debt-Leases 100% 0%
100 Transfer in-Operating Fund 100% 0%
Transfer- Capital-Ops 0% 100%
Total Other Operating Revenues 394,000 394,000
Total Rate Revenue Requirement 17,307,939. 49% 8,555,659 51% 8.752,280 A - 1
APPENDIX B
Water Cost-of-Service
Analysis
APPENDIX - B
CITY OF CALEXICO, CA
Allocation of Test Year Costs to Water Function
Test Year Revenue Requirement
Line No: Expense Group FY 2025
Treatment $3,473,290
Transmission & Distribution 1,666,489
Pumping
Customer Service 143,170
Admin 2,111,851
Source of Supply 0
Transfers 0
00 Existing Bond DS 820,850
9 New Bond DS
10 Capital Quilay 2,767,800
11 12 Total $10,983,450
B - 1
APPENDIX - B
CITY OF CALEXICO, CA
Water Customer and Equivalent Residential Unit Calculation - Test Year FY 2025 Meter Equivalencies
ГА-11 B-1 C-11 D-TI IN -11
COMMERCIAL
MULTI-FAMILY CONSTRUCTION/ WATER FOR
Line class •> RESIDENTIAL APARTMENTS COMMERCIAL IRRIGATION INDUSTRIAL/MFG CHURCHES SCHOOLS GOVERNMENT No: Meter Size DWELLING TR LOAD RESALE
ONIY
Billing Basis.» Unils Units Units Units Unlisi Unils] Units Units
0.625 8 8 0.67 0.67 0.67 0.67 0.67 0.67 0.67 0.67
0.75 1.00 8 8 8 8 8 8 8 .00
1.00 8 8
1.50 3.33 8 3.33 3.33 3.33 3.33 3.33 3.33 3.33 3.33
2.00 5.33 8 8 5.33 5.33 5.33 5.33 5.33 5.33 5.33 5.33
3.00 10.00 10.00 10.00 10.00 0.00 10.00 10.00 10.00
4.00 16.67. 8 8 16.67 16.67 16.67 6.67 16.67 16.67 16.67
6.00 33.33 33.33 33.33 33.33 33.33 33.33 33.33 33.33
8.00 53.33 8 53.33 53.33 53.33 53.33 53.33 53.33 53.33
10.00 76.67 8 76.67 76.67 76.67 76.67 76.67 76.67 76.67 Customer Accounts
/B-21 C-21 E:21 (G-21 TH: 21 K-2
COMMERCIAL
Line Class -•> RESIDENTIAL MULTI-FAMILY APARTMENTS COMMERCIAL CONSTRUCTION/ WATER FOR Meter Size DWELLING IRRIGATION INDUSTRIAL/MFG CHURCHES SCHOOLS GOVERNMENT No: TR LOAD RESALE Total
ONLY
Billing Basica Unilsi Unils
0.625
2,507 3,144
4,768 5,890
NiM HE 8088 1,099
8 6.00
8.00 10.00
Total Monthly Customers 7,277 1,935 21 11,150
Total Equivalent Residentiäl Units
D-UMD - 21 TE - 1Е - 21 DE-1EE-2 HEIMH -2 [K-1K•2
MULTI-FAMILY COMMERCIAL
Line Class •> RESIDENTIAL APARTMENTS COMMERCIAL IRRIGATION INDUSTRIAL/MFG CHURCHES SCHOOLS GOVERNMENT CONSTRUCTION/ WATER FOR No: Meter Size DWELLING TR LOAD RESALE Tolal
ONLY
Billing Basis. Units] Unils Unika Unis Units Unit Units UnIl
0.625
0.75 -2.507 3,144
4,768 660 -220 6.080
1.50 2.00 1,840
3.00 455 :880 18.88 815-
4.00 363
6.00 120 8 353
8.00 10.00
Total Monthly Customers 7286 1,935 1,350 414 101 12,919 B - 2
APPENDIX - B
CITY OF CALEXICO, CA
Water Max Day/Hour Allocation Factors - Test Year FY 2025 Max Day Max Day
Line No: Description Total Extra
Capacity Capacity
Operating Statistics: MGD Factor
Avg Day Flow (MGD) 4.60 1.00
Mox Day Flow (MGD) 7.19
Cost Allocation Factors: Base Max Day Max Hour
Base/Max Day 63.98% 36.02% 0.00%
Peaking Factors! ВИС
RESIDENTIAL, MULTI-FAMILY DWELLING, AND APARTMENTS
All Flow 187.758 138,920
All Flow 16,819 13,916
COMMERCIAL IRRIGATION ONLY
All Flow 10,960 6.525 1.68
SCHOOLS
All Flow 11,250 6.616
GOVERNMENT
la All Flow 3,950 1,341 2.95
CONSTRUCTION/TR LOAD 3.07
All Flow
WATER FOR RESALE 1.35
All Flow
Maximum Day
10x(B)
Average
Total Annual Daily Flow Peaking Total Extra
Estimated Max Day/Hour Flows:: Flow (CCE (CCF Factor Capacily
RESIDENTIAL, MULTI-FAMILY DWELLING, AND APARTMENTS
All Flow 1.725,162 4.726 6,388 1.662
COMMERCIAL, INDUSTRIAL/MFG, and CHURCHES 95
All Flow 166,989 458 553
COMMERCIAL IRRIGATION ONLY
All Flow 78,299 215 360
SCHOOLS
All Flow -79,392 218 370
GOVERNMENT
All Flow 16,451 2.95
CONSTRUCTION/TR LOAD
All Flow 592 3.07
WATER FOR RESALE
All Flow 1,254
Total 2,068,139 5,666 7,814 2,147
B- 3
APPENDIX - B
CITY OF CALEXICO, CA
Water Units of Service by Cost Component - Test Year FY 2025 LAI
Line No: Description Accounfs/ Max Day
ERUS Base (CCF) (CCF/Day)
RESIDENTIAL, MULTI-FAMILY DWELLING, AND APARTMENTS 10,571 10,562 1,725,162 1,662 All Flow 1,725,162 1,662
COMMERCIAL, INDUSTRIAL/MFG, and CHURCHES 1,456 475 166,989 95 All Flow 166,989 95
COMMERCIAL IRRIGATION ONLY 361 38 78,299 146
All Flow 78,299 146
SCHOOLS 414 43 79,392 152
All Flow 79,392 152
GOVERNMENT 101 24 16,451 88
All FloW 16,451 88
11 CONSTRUCTION/TR LOAD 592
12 All Flow 592
13 WATER FOR RESALE 1,254
All Flow 1,254
Total 12,919 11,150 2,068,139 2,147
B -4
APPENDIX - B
CITY OF CALEXICO, CA
Allocation of Water Costs - Test Year FY 2025
Extra Capacity Meters & Billing &
Line No: Description Water Costs Base Total (Check)
Max Day Services Collection
Allocation Factors:
Treatment 63.98% 36.02% 0.00% 0.00% 100.00%
Transmission & Distribution 63.98% 36.02% 0.00% 0.00% 100.00% Pumping 63.98% 36.02% 0.00% 0.00% 100.00%
Customer Service 0.00% 0.00% 0.00% 100.00% 100.00%
Admin 0.00% 0.00% 100.00% 0.00% 100.00%
Source of Supply 100.00% 0.00% 0.00% 0.00% 100.00%
Transfers 80.00% 0.00% 20.00% 0.00% 100.00%
Existing Bond DS 0.00% 0.00% 100.00% 0.00% 100.00%
New Bond DS 0.00% 0.00% 100.00% 0.00% 100.00%
10 CIP 32.00% 18.00% 50.00% 0.00% 100.00%
11 Capital Outlay 0.00% 0.00% 100.00% 0.00% 100.00%
Allocation of Costs:
12 Treatment $ 3,473,290 2,222,133 1,251,157 3,473,290
13 Transmission & Distribution 1,666,489 1,066,182 600,307 1,666,489 14 Pumping
15 Customer Service 143,170 1 143,170 143,170
16 2,111,851 2,111,851 2,111,851
Admin
17 Source of Supply
18 Transfers
19 Existing Bond DS 820,850 820,850 820,850
20 New Bond DS
21 CIP 2.767,800 885,696 498,204 1,383,900 2,767,800
22 Capital Outlay
23 Non-Rate Rev & Fund Balance 2,427,7917 (922,627) (519,373) (954,145) (31,646) (2,427.791) 24 Total $ 8,555,659 3,251,384 1,830,295 3,362,456 111,524 8,555,659 Total Units of Service 2,068,139.00 2,147.49 12,918.67 11,150.00 Units CCF CCF/Day ERU/Monthly Bills/Monthly
Cost Per Unit 1.5721 852.2932 21.6899 0.8335
Units CCF CCF/Day ERU/Monthly Bills/Monthly
B-5
APPENDIX - B
CITY OF CALEXICO, CA
Water Cost of Service by Cost Component and Customer Class - Test Year FY 2025 TAL
Line No: Description Accounts/ Max Day Total
ERUs Base (CCF)
Units CCF/Day)
$ 2,751,321 105,642 $ 2,712,179 $ 1,416,200 $ 6,985,343 - RESIDENTIAL, MULTI-FAMILY DWELLING, AND APARTMENTS
All Flow 2,712,179 1,416,200
COMMERCIAL, INDUSTRIAL/MFG, and CHURCHES™ $ 379,053 $ 4,751 262,528 81,348 727,681 All Flow 262,528 81,348
COMMERCIAL IRRIGATION ONLY 93,8745 380 123,096 124,262 $ 341,612 All Flow 123,096 124,262
SCHOOLS 107,755 $ 430 124,815 129,859 $ 362,859
All FloW 124,815 129,859
GOVERNMENT 26,375 240$ 25863 $ 74.757 $ 127235
10 All Flow 74,757
11 CONSTRUCTION/TR LOAD 2,516 $ 40 931 2,857 6,344
12 931 2,857
All Flow
13* WATER FOR RESALE 1,562 $ 40 1,971 1,012 4,585
14 All Flow 1,971 1,012
15 Total $ 3,362,456 $ 111,524 $ 3,251,384 $ 1,830,295 $ 8,555,659 B - 6
APPENDIX - B
CITY OF CALEXICO, CA
Water Rate Calculation - Test Year FY 2025
Line IA] DI
Description Capacity Customer Proposed Existing Fixed
No: Meter Charge Difference
Ratio Charge Fixed Charge Charge
General Service
1 3/4 Inch 1.00 21.69 0.83 22.52 20.69 1.83
1.0 Inch 1.67 36.15 0.83 36.98 34.55 2.43
WN
1.5 Inch 3.33 72.30 LA LALLAZAVA 0.83 73.13 68.90 4.23
4 2.0 Inch 5.33 115.68 0.83 enteresteres 116.51 110.27 6.24
3.0 Inch 10.00 tA tA GAGA GA GA tA GAIGA 216.90 0.83 217.73 220.75 (3.02) v'a'c 4.0 Inch 16.67 361.50 LA LA 0.83 362.33 344.88 17.45
6.0 Inch 33.33 723.00 0.83 723.83 689.55 34.28
eser
8 8.0 Inch 53.33 ,156.79 0.83 1,157.63
tAGA N/A N/A
10.0 Inch 76.67 1,662.89 0.83 1,663.73 N/A N/A
Line Proposed Existing Rate Tier
Customer Class Base Rate Peaking Rate Difference
No: Rate (S/CCE) (S/CCF) Differential
RESIDENTIAL, MULTI-FAMILY DWELLING, AND APARTMENTS
All Flow $ 1.57 $ 0.82. 2.39 $ 2.15 $ 0.24 1.00
COMMERCIAL, INDUSTRIAL/MFG, and CHURCHES
2 All Flow 1.57 $ 0.49 $ 2.06 $ 3.45 $ (1.39) 1.00
COMMERCIAL IRRIGAHION ONLY
All Flow. $ 1.57 E _1.59 $ 3.16 $ 3.45 $ _(0.29) 1.00
SCHOOLS
4 All Flow 1.57. $ _1.64 $ 3.21 $ 3.45 (0.24) 1.00
GOVERNMENT
All Flow $ 1.57 $ 4.54 $ 6.12. $ 6.12 1.00
CONSTRUCTION/TR LOAD
All Flow _ 1.57 $ 4.83 $ 6.40 $ 8.18 $ _ (1.78) 1.00
WATER FOR RESALE
All Flow 1.57 $ 0.81 $ 2.38 11.76 S (2.38) 1.00
Line Annual Use | Peaking Unil
Customer Class Peaking Costs
No: (CCF) Cost
RESIDENTIAL, MULTI-FAMILY DWELLING, AND APARTMENTS
All Flow i 1,725,162 $ 1,416,200 $ 0.82
COMMERCIAL, INDUSTRIAL/MFG, and CHURCHES
2 All Flow 166,989 $ 81,348 $ 0.49
COMMERCIAL IRRIGATION ONLY
3 All Flow 78,299 $ 124,262 $ 1.59
SCHOOLS
4 All Flow 79,392. $ 129,859 $ 1.64
GOVERNMENT
5 All Flow 16,451 $ 74,757 $ 4.54
CONSTRUCTION/TR LOAD
All Flow 592 $ 2,857 $ 4.83
WATER FOR RESALE
7 All Flow 1,254$ 1,012$ 0.81
8 Total - 2,068,139 $ 1,830,295
B - 7
APPENDIX C
Sewer Cost-of-Service
Analysis
APPENDIX - C
CITY OF CALEXICO, CA
Allocation of Test Year Costs to Sewer Function
Test Year Revenue Requirement
Line No: Expense Group FY 2025
1 Collection $838,963
2 Treatment 2,525,170
Administration 1,459,329
Pumping 0
Customer Service 94,760
6 Transfers
Existing Bond DS 1,146,200
New Bond DS 1,268,000
CIP 23,762,497
10 Capital Outlay
11 Total $ 31,094,919
C-1
APPENDIX - C
CITY OF CALEXICO, CA
Sewer Customer Account & Stength Characteristics by Customer Class - Test Year FY 2025 Total
Line No: Description Factor !!
Customers Factor"!! Pounds
Residential Classes
RESIDENTIAL 1,439,818 1,796,409 1,796,409
MULTI-FAMILY DWELLING 16.206 11250002
A, CO'N APARTMENTS
Sub-Total Residential 1,694,434 2,114,084 2,114,084
Non-Residential Classes
COMMERCIAL RATE I!
CHURCHES 23 276 4,987 200 8,319 200 8,319
6 COMMERCIAL 254 3,048 48,768 200 81,345 200 81,345
GOVERNMENT 9 108 8,100 130 8,782 100 6,755
INDUSTRIAL/MFG 2 24 144 200 240 200 240
9 SCHOOLS 39 468 60,372 130 65,455 100 50,350
10 Sub-Total COMMERCIAL RATE II 327 3,924 122,371 164,141 147,010 COMMERCIAL RATE !!!
11 COMMERCIAL 78 936 28,080 483 113,112 410 96,017
12 INDUSTRIAL/MFG 36 684 483 2.755 410 2,339
13 Sub-Total COMMERCIAL RATE I!! 81 972 28,764 115,868 98,356
COMMERCIAL RATE IV
14 COMMERCIAL 88 1,056 70,752 950 560,568 810 477,958
15 INDUSTRIAL/MFG 192 5,568 950 44,115 810 37,614
16 Sub-Total COMMERCIAL RATE IV 104 1,248 76,320 604,683 515,572 17 Sewer System Total 11,223 134,676 1,921,889 2,998,776 2,875,021 Notes:
[1] Average strength factors for BOD and TSS are based on the State Water Resources Control Board Revenue Program Guidelines, Appendix G.
....
C - 2
APPENDIX - C
CITY OF CALEXICO, CA
Allocation of Sewer Costs - Test Year FY 2025
Strength - Strength - SS Customer Total (Check)
Description Sewer Costs Volume Capacity BOD
Line No:
Allocation Factors: 38.47% 36.87% 0.00% 100.00%
Treatment 12.33% 12.33%
50.00% 50.00% 0.00% 0.00% 0.00% 100.00%
N Collection 0.00% 0.00% 100.00% 100.00%
Administration 0.00% 0.00%
12.33% 12.33% 38.47% 36.87% 0.00% 100.00%
Pumping 0.00% 0.00% 0.00% 100.00% 100.00%
Customer Service 0.00% 100.00%
50.00% 50.00% 0.00% 0.00% 0.00%
Transfers 19.23% 18.44% 50.00% 100.00%
CIP 6.16% 6.16% 100.00%
12.33% 12.33% 38.47% 36.88% 0.00%
Capital Outlay 0.00% 0.00% 100.00% 100.00%
Existing Bond DS 0.00% 0.00% 100.00%
0.00% 0.00% 0.00% 0.00% 100.00%
New Bond DS
Allocation of Costs: 971,360 $ 931,104 2,525,170
Treatment $ 2,525,170 311,353 311,353
11 838,963
838,963 419,482 419,481
12 Collection 1,459,329 1,459,329
Administration 1,459,329
14 Pumping 94.760 94,760
15 Customer Service 94,760
16 Transfers 1,464,556 4,570,374 4,381.762 T1,881,249 23,762,497 17 CIP 23,762,497 1,464,556
18 Capital Outlay 1.146,200 1,146,200 1,146,200
19 Existing Bond DS 1,268,000 1,268,000
New Bond DS 1,268,000 22342,639)
(22,342,639) (1,577,455) (1,577,454) (3,98T.903) 3,817,455) (T1,388,372) 21 Non-Rate Rev & Fund Balance 8,752,280
8,752,280 617,936 es 617,936 1,559,831 1,495,411 4,461,166 22 Total
Total Units of Service 1,921,889 1,921,889 2,998,776 2,875,021 11,223 CCF CCF Pounds Pounds Units/Monthly
Units
0.52 33.13
Cost Per Unit Pounds Pounds Units/Monthly
Units
C - 3
APPENDIX - C
CITY OF CALEXICO, CA
Sewer Cost of Service by Cost Component and Customer Class - Test Year FY 2025
TAL IDL
Line No: Description Strength - Strength - SS Customer Total Volume Capacity
BOD
- RESIDENTIAL $ 1,099,653 $ 1,099,618 $_4,257,645 $ 7,546,522 COMMERCIAL RATE II 370,519
COMMERCIAL RATE III 60,269 32,198
COMMERCIAL RATE IV 24,539 24,539 314,530 268,169 41,340 673,117 Total 617,936 617,936 $ 1,559,831 $ 1,495,411 $ 4,461,166 $ 8,752,280 C-4
APPENDIX - C
CITY OF CALEXICO, CA
Sewer Rate Calculation - Test Year FY 2025
= 5
Line No: Customer Class Fixed Rate Monthly Proposed Existing Monthly Fixed Volumetric Billable Annuat Proposed Existing Volumetric Dwelling Units Monthly Fixed Monthly Fixed Fee Difference Rate Costs Volume (CCF) Volumetric Volumetric Rate Fee Rate Rate Difference
Residential Classes
RESIDENTIAL 7,546,522 10.711 S 58.71 S 44.23 $ 14.48 N/A N/A N/A N/A N/A Non-Residential Classes
COMMERCIAL RATE Il 129,983 327 S 122,371 $ 1.97 $ 4,12 S (2.15) 81 $ 33.13 % 16.28 $
COMMERCIAL RATE III 32,198 28,764 les 4.52 $ 4.64 $ (0.12) COMMERCIAL RATE V 41,340 104 $ 33.13 $ 51.56 $ (18.43) S 76,320 $ 8.28 S 5.15 3.13 C - 5
APPENDIX - C
CITY OF CALEXICO, CA
Sewer Revenue vs Cost of Service by Customer Class Check - Test Year FY 2025 IC CHE
Line No: Customer Class Proposed Proposed
Monthly Monthly Fixed Total Fixed Fee Billable Annual Volumetric Volumetric Calculated Total COS Difference Dwelling Units Fee Revenue Volume (CCF) Rate Rate Revenues Revenues Revenues Calc vs COS RESIDENTIAL 10.711 58.71 7,546,522 N/A N/A 7,546,522 $ 7,546,522 COMMERCIAL RATE II 327 33.13 $ 129,983 122,371 $ 1.97 $ 240,536 370,519 COMMERCIAL RATE III 81 $ 33.13 32,198 28,764 $ 4.52 $ 129,925 162,122 162,122 COMMERCIAL RATE IV 104 $ 33.13 41,340 76,320 8.28 631,776 673,117 us. 673,117 $ Total 11,223 7,750,043 227,455 es 1,002,237. 8.752,280 8,752,280 C - 6
,XICO
КАМЕДАЙ!! IMPERIAL CALIFORNIA
M WILLDAN
27368 Via Industria, Suite 200
Temecula, CA 92590
800.755.6864 | Fax: 888.326.6864
www.willdan.com
ATTACHMENT NO. 3
NOTICE OF PUBLIC HEARING REGARDING
PROPOSED CHANGES TO WATER AND SEWER RATES
Hearing Date & Time: August 21, 2024, 6:30 PM
Hearing Location: Calexico City Council Chambers
CALEXICO 608 Heber Avenue, Calexico, California 92231
Why are you receiving this notice?
The City of Calexico (City) is mailing this notice to you because you are a water and/or sewer customer, or record owner of property that receives one or both services. This notice is being provided pursuant to California Constitution Article XIII D (also known as "Proposition 218"), which requires the City to notify property owners and customers of proposed changes to property-related fees such as those for water or sewer service. This notice describes proposed changes to the rates for these services and provides information about a public hearing to be held at 6:30 p.m. on August 21, 2024, at the City Council Chambers, 608 Heber Avenue, Calexico, CA 92231. If adopted, the proposed rates for water and sewer service will take effect September 1, 2024.
What do water and sewer rates fund?
The City provides water and sewer service to residential, multi-family, and non-residential customers within its service territory and is committed to continuing high quality, reliable service at the lowest possible rates for our customers. Water and sewer rate revenue provides funding for costs related to system operations, maintenance, capital projects, repair and replacement of aging system components, debt repayment, administration, as well as costs related to prudent long-term operational or financial management of the utilities, such as maintaining adequate fund reserves and planning for contingencies. Monthly water and sewer rates charged to system users (customers) are the primary source of revenue for these purposes and are used solely for these purposes.
Over the next five years, the City has planned capital improvements to replace water transmission mains, pipelines, pumps and equipment, as well as sewer collection manholes and pipelines, and a significant expansion and upgrade of the City's Wastewater Treatment plant (WWTP).
The proposed rates are based on a comprehensive utility rate study and financial plan completed by an independent consultant. The rate structures for each utility were designed so that revenues derived from the proposed rates do not exceed the amount of revenue required for the City to provide the services. The revenue from the water and sewer rates will not be used for any purposes other than those for which they are imposed. The amount of the proposed rates imposed on any parcel will not exceed the proportional cost of the service(s) attributable to such parcel; and water and sewer charges will be imposed only if water or sewer service is actually used by or available to the property owner or customer.
Why are water and sewer rate changes needed?
The utility rate study and financial plan determined that the City's current water and sewer rates are not sufficient to meet ever increasing costs associated with system operations and maintenance, and costs for the capital projects mentioned above. These costs also include administrative support for operations, repair and replacement of aging system components, repayment of debt, maintenance of designated reserves, and capital facilities projects to ensure quality uninterrupted water and sewer service.
How the water and sewer rates are determined and proposed rate increases To develop water and sewer rates that generate sufficient revenue to meet fiscal and policy objectives of the City, a determination of the annual revenue requirements from water and sewer rates was completed. As previously mentioned, revenue requirements include projected expenditures for operations, maintenance, repair and replacement of aging system components, equipment, debt repayment, minimum coverage for scheduled debt payments, and capital projects.
The revenue requirement for each utility also includes maintenance of designated reserves. Maintaining appropriate reserve funds is critical to the ability of the City to serve its customers and respond to unforeseen and unpredictable costs.
The reserves, like all elements of the water and sewer charges, may only be used to fund costs associated with those systems.
The revenue requirements were compared to the total sources of available funds under existing rates during each year of revenue was found, a series of revenue adjustments was calculated, which if implemented, will provide revenue sufficient to meet those needs. The proposed rates are determined by calculating the costs associated with providing water and sewer service to each customer class. A description of the proposed water and sewer rates follows.
Water - Proposed water rates consist of 1) a monthly fixed charge per dwelling unit that applies to all residential customers which designates the minimum amount a residential customer will pay per dwelling unit regardless of the amount of water used. There is also a monthly fixed charge for all other customers that varies based on meter size regardless of the amount of water used, and 2) a volumetric rate per 100 cubic feet, based upon the amount of monthly metered water use. This volume charge varies for different customers based on the costs related to their specific demand and peak usage characteristics. The fixed charge recovers the fixed costs of maintaining and operating utility infrastructure and facilities, while the volumetric rate recovers variable costs of pumping, treating, and distributing water. The rate structure was designed so that each system user will be charged an amount that represents their proportional share of the City's cost of serving them, based on their historical demand and usage characteristics.
Sewer - Proposed sewer rates consist of 1) separate monthly fixed charges for Residential and Non-Residential customers, regardless of their usage, and 2) Volumetric rates for Non-Residential customers only, per 100 cubic feet, that vary by sewer discharge strength for three different customer categories. Residential customers pay only a flat monthly fee, and no volumetric rate per 100 cubic feet. The fixed charges recover the fixed costs associated with the operation and maintenance of sewer collection and treatment facilities, while the volumetric rates recover the variable costs of treatment and disposal of wastewater. The rate structure was designed so each system user will be charged an amount that is proportional to the cost of serving them, based upon their demand, discharge strength and usage characteristics.
New water rates
The City is proposing to implement new water rates as a series of annual adjustments starting on September 1, 2024, and then each July 1 thereafter, through July 1, 2028. The following table summarizes the proposed water rates.
Proposed Monthly Water Rates
July 1, 2024 - July 1, 2028
Existing Projected For Fiscal Year Beginning July 1:
Description 2025 2026 2027 2028
Rates 2024
Monthly Fixed Charge:
Residenfial
First Dwelling Unit 18.66 22.52 24.77 29.70 32.38
Additional Dwelling Unit 2.33 22.52 24.77 27.24 29.70 32.38 All Other Customers
3/4 Inch
1.0 Inch
1.5 Inch
2.0 Inch
3.0 Inch
4.0 Inch
6.0 Inch
Construction Truck
Water for Resale
Volumetric Rates Per 100 Cubic Feet:
Residential 2.15 $ 2.39 $ 2.63 2.89 3.15 3.43
Commercial, Manufacturing and Industrial $ 3.45 $ 2.06 $ 2.26 2.49 2.71 2.95 Construction/Truck $ 8.18 $ 6.40 $ 7.03 $ 7.73 $ 8.42 9.17 Water for Resale $ 11.76 2.38 2.61 2.87 $ 3.13 3.41
City/Government 3.45 6.12 $ 6.72 $ 7.39 $ 8.05 8.77
Commercial Irrigation Only 3.45 3.16 3.47 3.82 $ 4.16 4.53 Schools $ 3.45 3.21 3.53 $ 3.87 4.22 $ 4.60
New sewer rates
In order to provide necessary funding for the sewer system, the City is proposing to implement new sewer rates as a series of annual adjustments starting on September 1, 2024, and each July 1 thereafter though July 1, 2028.
Proposed Monthly Sewer Rates
July 1, 2024 - July 1, 2028
Existing Projected For Fiscal Year Beginning July 1a
Description Rates 2024 2025 2026 2027 2028
Monthly Fixed Charge:
Residential "
First Dwelling Unit $ 44.23 $ 58.71 $ 79.26 $ 80.85 82.47 84.12 Additional Dwelling Unit 22.11 $. 58.71 $ 79.26 $ 80.85 82.47 $ 84.12 Non-Residential
Commercial Rate Il 41.22 33.13 $ 44.72 45.62 46.53 $ 47.46 Commercial Rate III 46.45 33.13 $ 44.72 45.62 1650 k 46.53 17.16 Commercial Rate IV $ 51.56 33.13$ 44.72$ 45.62 $
Volumetric Rates Per 100 Cubic Feet:
Commercial Rate Il 4.12 1.97 $ 2.65 2.70 2.75 2.81
Commercial Rate III 4.64 $ 4.52 6.09 $ 6.20 $ 6.32 $ 6.46 Commercial Rate IV 5.15 1$ 8.28 L$ 11.16 $ 11.37 L$ 11.58 $ 11.83 Notes:
[I] All residential customers only pay a flat fee per dwelling unit, regardless of usage.
Impact on your water and sewer bill
Per the proposed rates, effective September 1, 2024, the combined water and sewer bill for a typical single-family home that uses 1,600 cubic feet of water per month would increase from $97.29 per month to $119.52 per month. The . accompanying graph provides a summary of existing and proposed rates under various usage scenarios. $140.00 $129.09
$119.52
$120.00
$105.89
$100.38
$97.29
$100.00 $90.81
$80.09
$80.00 $71.49
$60.00
$40.00
$20.00
400 CF 800 CF 1600 CF 2000 CF
• Existing Bill Proposed Bill
How do you file a protest or participate in the public hearing? The City will consider the new water and sewer rates at a Public Hearing on Wednesday, August 21, 2024, at 6:30 p.m. at the City Council Chambers, 608 Heber Avenue, Calexico, CA 92231. You are invited to present oral or written testimony at the Public Hearing. Any owner or customer of record of a parcel subject to the proposed rates may submit a written protest against the proposed rate revisions. If written protests are filed for a majority of the affected parcels, the proposed rate revisions will not be adopted.
In order for a written protest to be counted, it must include the following: a statement indicating that the identified property owner or customer of record is in opposition to the proposed water or sewer rate changes; the street address or Assessor's Parcel Number (APN) for the parcel (s) with respect to which the protest is made; and the name and signature of the owner or customer.
Protests may be mailed, or hand delivered, to the City Clerk at 608 Heber Avenue, Calexico, CA 92231, prior to 4:00 p.m. on August 21, 2024, or hand delivered to the City Clerk at the Public Hearing on August 21, 2024. To be counted, a signed written protest must be received by the City Clerk before the conclusion of the Public Hearing. Protests submitted via e- mail or other electronic means will not be accepted. For any written protest, whether mailed or submitted in person to the City Clerk, please identify on the front of the envelope that the enclosed protest is for the Public Hearing on the Proposed Rate Changes - Water and Sewer Rates. While both property owners and customers of record may submit written protests, only one protest will be counted for each parcel.
The City Council will hear and consider all written and oral protests related to the proposed rate changes at the Public Hearing. Oral comments at the Public Hearing will not qualify as formal protests unless accompanied by a written protest.
If written protests, as outlined above, are not presented by a majority of property owners or customers of record, the City Council will be authorized to adopt the proposed rates. If adopted, the rates for water and sewer service will take effect beginning September 1, 2024.
In accordance with Government Code section 53759, there is a 120-day statute of limitations for challenging any new, increased, or extended fee or charge for water or sewer service, beginning from the effective date or the date of final passage, adoption, or approval of the resolution adopting the rates, whichever is later.
If you have any questions regarding this notice, or would like to view the rate study report, please contact the Public Works Department at (760) 768-2160.
ATTACHMENT NO. 4
AVISO DE AUDIENCIA PÚBLICA SOBRE LOS CAMBIOS
PROPUESTOS EN LAS TARIFAS DE AGUA Y DRENAJE
Fecha y hora de la audiencia: 21 de agosto de 2024, a las 6:30 p.m.
Lugar de la audiencia: Cámaras del Concejo Municipal de Calexico CALEXICO 608 Heber Avenue, Calexico, California 92231
PASe Cato Co Desde 77a
¿Por qué está recibiendo usted este aviso?
La ciudad de Calexico (ciudad) le está enviando por correo este aviso porque usted es un cliente de los servicios de agua y/o drenaje, o el propietario registrado de una propiedad que recibe uno o ambos servicios. Este aviso se está proporcionando de conformidad con el Artículo XIII D de la Constitución de California (conocido también como "Propuesta 218"), en el que se exige que la ciudad dé aviso a los propietarios y clientes de los cambios propuestos en las tarifas relacionadas con las propiedades, tales como las tarifas de los servicios de agua o drenaje. En este aviso se describen los cambios propuestos en las tarifas de estos servicios y se proporciona información sobre una audiencia pública que se llevará a cabo a las 6:30 p.m. del 21 de agosto de 2024 en las Cámaras del Concejo Municipal, 608 Heber Avenue, Calexico, CA 92231. Si se adoptan, las tarifas propuestas para los servicios de agua y drenaje entrarán en vigor el 1° de septiembre de 2024.
¿Qué financian las tarifas de agua y drenaje?
La ciudad presta servicios de agua y drenaje a los clientes residenciales, multifamiliares y no residenciales que se encuentren dentro de su territorio de servicio, y está comprometida a seguir prestando servicios confiables y de alta calidad a las tarifas más bajas posibles para nuestros clientes. Los ingresos provenientes de las tarifas de agua y drenaje financian los costos relacionados con las operaciones del sistema, el mantenimiento, los proyectos de capital, la reparación y el reemplazo de los componentes viejos del sistema, el pago de la deuda y la administración, así como también los costos relacionados con una gestión operativa o financiera prudente de los servicios públicos a largo plazo, tal como el mantenimiento de reservas adecuadas de fondos y la planificación para las contingencias.
Las tarifas mensuales de agua y drenaje cobradas a los usuarios del sistema (clientes) son la principal fuente de ingresos para estos fines y se utilizan únicamente para estos fines.
Durante los próximos cinco años, la ciudad ha planificado mejoras de capital para reemplazar las tuberías principales, las tuberías secundarias, las bombas y los equipos de transmisión de agua, así como también las bocas de alcantarilla y las tuberías secundarias de recolección de drenaje, y una importante ampliación y mejora de la planta de tratamiento de aguas residuales de la ciudad.
Las tarifas propuestas se basan en un estudio integral de las tarifas de los servicios públicos y un plan financiero realizado por un consultor independiente. Las estructuras de las tarifas correspondientes a cada servicio público se concibieron de manera que los ingresos derivados de las tarifas propuestas no excedan el monto de los ingresos requeridos para que la ciudad preste los servicios.
Los ingresos provenientes de las tarifas de agua y drenaje no se utilizarán para ningún fin aparte de aquellos para los cuales fueron impuestas. El monto de las tarifas propuestas impuestas a cualquier parcela no excederá el costo proporcional de los servicios atribuibles a tal parcela, y los cargos de agua y drenaje solo se impondrán si el servicio de agua o drenaje es realmente utilizado por, o está realmente disponible para el propietario o cliente. ¿Por qué se necesitan cambios en las tarifas de aqua y drenaje? Durante el estudio de las tarifas de los servicios públicos y la realización del plan financiero se determinó que las tarifas actuales de agua y drenaje de la ciudad no son suficientes para cubrir los costos cada vez mayores asociados con las operaciones y el mantenimiento del sistema, y los costos de los proyectos de capital mencionados anteriormente. Estos costos también incluyen el apoyo administrativo de las operaciones, la reparación y el reemplazo de los componentes viejos del sistema, el pago de la deuda, el mantenimiento de las reservas designadas y los proyectos de capital de las instalaciones para garantizar servicios ininterrumpidos de agua y drenaje de calidad.
Cómo se determinan las tarifas de agua y drenaje y aumentos propuestos de las tarifas Para fijar tarifas de agua y drenaje que generen ingresos suficientes para lograr los objetivos fiscales y políticos de la ciudad se determinaron los requisitos anuales de ingresos provenientes de las tarifas de agua y drenaje. Como se mencionó anteriormente, los requisitos de ingresos incluyen los gastos proyectados correspondientes a las operaciones, el mantenimiento, la reparación y el reemplazo de los componentes viejos del sistema, los equipos, el pago de la deuda, la cobertura mínima para los pagos programados de la deuda y los proyectos de capital.
El requisito de ingresos correspondiente a cada servicio público incluye también el mantenimiento de las reservas designadas. El mantenimiento de los fondos adecuados de reserva es fundamental para la capacidad de la ciudad de atender a sus clientes, y responder a los costos imprevistos e impredecibles. Las reservas, como todos los elementos de los cargos de agua y drenaje, sólo pueden usarse para financiar los costos asociados con esos sistemas.
Los requisitos de ingresos se compararon con las fuentes totales de los fondos disponibles de acuerdo con las tarifas existentes durante cada año del período de pronóstico para determinar la idoneidad de los ingresos proyectados para cumplir con esos requisitos. Cuando se descubría una falta de ingresos se calculaba una serie de ajustes de los ingresos que, de implementarse, proporcionaría ingresos suficientes para satisfacer esas necesidades. Las tarifas propuestas se determinan calculando los costos asociados con la prestación de los servicios de agua y drenaje a cada clase de clientes. A continuación se encuentra una descripción de las tarifas propuestas de agua y drenaje.
Agua - Las tarifas propuestas de agua consisten en 1) un cargo fijo mensual por unidad de vivienda que se aplica a todos los clientes residenciales y designa el monto mínimo que un cliente residencial pagará por unidad de vivienda independientemente de la cantidad de agua consumida. También hay un cargo fijo mensual para todos los otros clientes que varía según el tamaño del medidor, independientemente de la cantidad de agua consumida y 2) una tarifa volumétrica por cada 100 pies cúbicos basada en el consumo mensual medido de agua. Este cargo por volumen varía para diferentes clientes según los costos relacionados con su demanda específica y las características del consumo pico. El cargo fijo permite recuperar los costos fijos de mantenimiento y operación de la infraestructura y las instalaciones de los servicios públicos, mientras que la tarifa volumétrica permite recuperar los costos variables del bombeo, el tratamiento y la distribución de agua. La estructura de las tarifas fue concebida para que a cada usuario del sistema se le cobre un monto que represente su parte proporcional del costo de la ciudad para atenderlo, según su demanda histórica y las características de su consumo.
Drenaje - Las tarifas propuestas de drenaje consisten en 1) cargos fijos mensuales separados para los clientes residenciales y no residenciales, independientemente de su consumo y 2) tarifas volumétricas solo para los clientes no residenciales por cada 100 pies cúbicos, que varían según la potencia de descarga del drenaje correspondiente a tres categorías diferentes de clientes. Los clientes residenciales solo pagan una tarifa mensual fija y no pagan ninguna tarifa volumétrica por cada 100 pies cúbicos. Los cargos fijos permiten recuperar los costos fijos asociados con la operación y el mantenimiento de las instalaciones de recolección y tratamiento de drenaje, mientras que las tarifas volumétricas permiten recuperar los costos variables de tratamiento y eliminación de las aguas residuales. La estructura de las tarifas fue concebida para que a cada usuario del sistema se le cobre un monto que sea proporcional al costo de atenderlo, según las características de su demanda, potencia de descarga y consumo.
Nuevas tarifas de agua
La ciudad está proponiendo implementar nuevas tarifas de agua como una serie de ajustes anuales a partir del 1° de septiembre de 2024, y luego cada 1° de julio a partir de ahí hasta el 1° de julio de 2028. En la siguiente tabla se resumen las tarifas propuestas de agua.
Tarifas mensuales propuestas de agua
1° de julio de 2024 al 1° de julio de 2028
Existing Projected For Fiscal Year Beginning July 1:
Description
Rates 2024 2025 2026 2027 2028
Monthly Fixed Charge:
Residential
First Dwelling Unit $ 18.66 $ 22.52 $ 24.77 $ 27.24 $ 29.70 32.38 Additional Dwelling Unit $ 9.33 $ 22.52 $ 24.77 $ 27.24 29.70 $ 32.38 All Other Customers
3/4 Inch $ 20.69 22.52 $ 24.77 27.24 29.70 $ 32.38
1.0 Inch $ 34.55 36.98 40.67 44.74 48.78 53.18
1.5 Inch $ 68.90 $ 73.13 80.43 88.47 96.45 105.16
2.0 Inch $ 110.27 $ 116.51 128.14 140.94 $ 153.67 $ 167.53
3.0 Inch $ 220.75 217.73 239.47 263.38 $ 287.16 313.07
4.0 Inch $ 344.88 362.33 $ 398.50 438.30 $ 477.87 $ 520.99
6.0 Inch $ 689.55 723.83 $ 796.08 $ 875.59 $ 954.63 $ 1,040.77 Construction Truck $ 110.86 Will now pay based on respective meter size.
Water for Resale $ 110.91 Will now pay based on respective meter size.
Volumetric Rates Per 100 Cubic Feet:
Residential $ 2.15 2.39 $ 2.63 $ 2.89 $ 3.15 $ 3.43
Commercial, Manufacturing and Industrial $ 3.45 2.06 2.26 2.49 $ 2.71 2.95 Construction/Truck 8.18 $ 6.40 $ 7.03 7.73 $ 8.42 9.17
Water for Resale $ 11.76 $ 2.38 $ 2.61 2.87 3.13 $ 3.41 City/Government $ 3.45 $ 6.12 6.72 7.39 $ 8.05 $ 8.77
Commercial Irrigation Only $ 3.45 3.16 3.47 3.82 4.16 4.53 Schools $ 3.45 $ 3.21 $ 3.53 $ 3.87 4.22 $ 4.60
Nuevas tarifas de drenaje
A fin de proporcionar el financiamiento necesario para el sistema de drenaje, la ciudad está proponiendo implementar nuevas tarifas de drenaje como una serie de ajustes anuales a partir del 1° de septiembre de 2024, y luego cada 1° de julio a partir de ahí hasta el 1° de julio de 2028.
Tarifas mensuales propuestas de drenaje
1º de julio de 2024 al 1° de julio de 2028
Existing Projecled For Fiscal Year Beginning July 1:
Description 2025 2027 2028
Rates 2024 2026
Monthly Fixed Charge:
Residential!!!
First Dweling Unit 44.23 $ 58.71 79.26 $ 80.85 $ 82.47 84.12 Additional Dwelling Unit $ 22.11 $ 58.71 79.26 $ 80.85 $ 82.47 $ 84.12 Non-Residential
Commercial Rate Il 41.22 $ 33.13$ 44.72 $ 45.62 46.53 $ 47.46 Commercial Rate III 46.45 33.13 44.72 45.62 46.53 $ 47.46 Commercial Rate IV 51.56 $ 33.13 44.72 45.62 46.53 47.46 Volumetric Rates Per 100 Cubic Feet:
Commercial Rate lI 4.12 $ 1.97 2.65 2.70 2.75 2.81
Commercial Rate II! 4.64 $ 4.52 6.09 $ 6.20 6.32 $ 6.46 Commercial Rate IV $ 5.15 $ 8.28 $ 11.16 $ 11.37 $ 11.58 11.83 Notes:
[|] All residential customers only pay a flat fee per dwelling unit, regardless of usage.
Impacto en su factura de aqua y drenaje
De acuerdo con las tarifas propuestas, a partir del 1° de septiembre de 2024 la factura combinada de aqua y drenaje correspondiente a una vivienda unifamiliar típica que consuma 1,600 pies cúbicos de agua al mes aumentaría de $97,29 al mes a $119,52 al mes: En el gráfico adjunto se proporciona un resumen de las tarifas existentes y propuestas de acuerdo con varios escenarios de consumo.. $140.00 $129.09
$119.52
$120.00
$105.89
$100.38
$100.00 $97.29
$90.81
$80.09
$80.00 $71.49
$60.00
$40.00
$20.00
400 CF 800 CF 1600 CF 2000 CF
•Existing Bill Proposed Bill
¿Cómo puede presentar usted una protesta o participar en la audiencia pública? La ciudad considerará las nuevas tarifas de agua y drenaje en una audiencia pública el miércoles 21 de agosto de 2024 a las 6:30 p.m. en las Cámaras del Concejo Municipal, 608 Heber Avenue, Calexico, CA 92231. Se le invita a presentar un testimonio verbal o por escrito en la audiencia pública. Cualquier propietario o cliente registrado de una parcela sujeta a las tarifas propuestas puede presentar una protesta por escrito contra las revisiones propuestas de las tarifas. Si se presentan protestas por escrito correspondientes a la mayoría de las parcelas afectadas, las revisiones propuestas de las tarifas no se adoptarán.
A fin de que se cuente una protesta por escrito, la misma debe incluir una declaración en la que se indique que el propietario o cliente registrado identificado se opone a los cambios propuestos en las tarifas de agua o drenaje, la dirección postal o el número de parcela del tasador de las parcelas con respecto a las cuales se haga la protesta, y el nombre y la firma del propietario o cliente.
Las protestas pueden enviarse por correo o entregarse personalmente al Secretario Municipal en 608 Heber Avenue, Calexico, CA 92231, antes de las 4:00 p.m. del 21 de agosto de 2024, o entregarse personalmente al Secretario Municipal en la audiencia pública del 21 de agosto de 2024. Para ser contada, el Secretario Municipal debe recibir una protesta firmada por escrito antes de la conclusión de la audiencia pública. No se aceptarán las protestas enviadas por correo electrónico ni otros medios electrónicos. En el caso de cualquier protesta por escrito, ya sea enviada por correo o presentada en persona al Secretario Municipal, por favor, indique en el frente del sobre que la protesta adjunta es para la audiencia pública sobre los cambios propuestos en las tarifas de agua y drenaje.
Aunque tanto los propietarios como los clientes registrados pueden presentar protestas por escrito, solo se contará una protesta por cada parcela.
El Concejo Municipal escuchará y considerará todas las protestas verbales y por escrito relacionadas con los cambios propuestos en las tarifas en la audiencia pública. Los comentarios verbales hechos en la audiencia pública no se clasificarán como protestas formales a menos que estén acompañados de una protesta por escrito. Si la mayoría de los propietarios o clientes registrados no presenta protestas por escrito como se indica anteriormente, el Concejo Municipal estará autorizado para adoptar las tarifas propuestas. Si se adoptan, las tarifas correspondientes a los servicios de agua y drenaje entrarán en vigor el 1° de septiembre de 2024.
De conformidad con la sección 53759 del Código de Gobierno, existe un plazo de prescripción de 120 días para impugnar cualquier tarifa o cargo nuevo, aumentado o ampliado correspondiente al los servicios de agua o drenaje a partir de la fecha de vigencia, o la fecha de aprobación o adopción final de la resolución en la que se que adopten las tarifas, lo que ocurra después.
Si usted tiene alguna pregunta sobre este aviso, por favor, comuníquese con el Departamento de Obras Públicas llamando al (760) 768-2160.