2022-01-11; City Council; ; Public Hearing for approval of Proposed Three-Year Rates for Potable Water, Recycled Water and Wastewater Services — Carlsbad City Council, January 11, 2022 (part 2 of 2)

CODE LINE ITEM ESCALATOR FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 EXPENDITURES Projection Projection Projection Projection Projection Personnel
6100 Reg Salaries Labor Inflation 1,784,827$ 1,838,370$ 1,893,520$ 1,950,330$ 2,008,840$ 6101 Incentive Pay Labor Inflation - - - - - 6135 Hazard Pay Labor Inflation 31,602 32,550 33,530 34,540 35,580 6150 IOD Worker's Comp Labor Inflation - - - - - 6200 Overtime Salaries Labor Inflation 60,000 61,800 63,650 65,560 67,530 6210 Standby Pay Labor Inflation 26,000 26,780 27,580 28,410 29,260 6300 Parttimes Salaries Labor Inflation 18,776 19,340 19,920 20,520 21,140 6305 Intern Salaries Labor Inflation 7,429 7,650 7,880 8,120 8,360 6400 Temporary Help Labor Inflation - - - - - 6501 Health Insurance Labor - Health Insurance 318,780 340,710 363,300 386,480 410,170 6510 Life Insurance General Inflation 1,270 1,300 1,330 1,360 1,390 6511 AD&D - City Paid General Inflation 635 650 670 690 710 6520 Vision Insurance General Inflation - - - - - 6530 Medicare General Inflation 27,859 28,560 29,270 30,000 30,750 6629 Cell Phone Reimbursement General Inflation - - - - - 6630 Auto Allowance General Inflation 1,138 1,170 1,200 1,230 1,260 6640 Earned Leave Accrual Labor Inflation - - - - - 6651 Healthy Emp Awards General Inflation - - - - - 6653 Final Vacation Pay Labor Inflation 17,000 17,510 18,040 18,580 19,140 6654 Final Sick Leave Pay Labor Inflation - - - - - 6655 Disability General Inflation 16,146 16,550 16,960 17,380 17,810 6656 Unemployment General Inflation 9,129 9,360 9,590 9,830 10,080 6657 Worker's Compensation General Inflation 32,250 33,060 33,890 34,740 35,610 6720 PERS Labor - PERS (Normal Cost)220,696 242,665 249,945 257,444 265,167 6723 PERS Unfunded Liab Exp Labor - PERS (Normal Cost)204,586 304,066 315,460 330,581 337,284 6721 PERS (GASB 68 CONTRA ACCOUNT)Labor - PERS (Normal Cost)- - - - - 6722 Operation Expense General Inflation - - - - - 6730 Social Security General Inflation - - - - - 6740 Deferred Comp General Inflation 705 720 740 760 780 Other Personnel General Inflation - - - - - Total Personnel Costs 2,778,829$ 2,982,811$ 3,086,475$ 3,196,554$ 3,300,861$ Maintenance & Equipment7111 Other Mach & Equip General Inflation -$ -$ -$ -$ -$ 7115 Vehicle Rentals General Inflation - - - - - 7119 Misc Rentals General Inflation 6,500 6,660 6,830 7,000 7,180 7120 Misc Leases General Inflation - - - - - 7210 Office Equip Maint General Inflation - - - - - 7211 Communication Equip Maintenance General Inflation 1,000 1,030 1,060 1,090 1,120 7215 Software Maintenance General Inflation 46,650 47,820 49,020 50,250 51,510 7216 Computer Maintenance General Inflation - - - - - 7220 Vehicle Maintenance General Inflation 15,000 15,380 15,760 16,150 16,550 7221 Wash and Wax General Inflation 4,500 4,610 4,730 4,850 4,970 7222 Other Equip Maint General Inflation - - - - - 7226 Pipeline Maintenance General Inflation 145,000 148,630 152,350 156,160 160,060 7230 Routine Building Maintenance General Inflation - - - - - 7241 Asphalt Repairs General Inflation 10,000 10,250 10,510 10,770 11,040 7249 Maintenance, Repair and Rehab General Inflation 3,000 3,080 3,160 3,240 3,320 7400 Audit General Inflation - - - - - 7410 Legal General Inflation - - - - - 7435 Administrative General Inflation - - - - - 7490 Misc Professional Services General Inflation 287,100 294,280 301,640 309,180 316,910 7500 Encina Services Gnrl Infltn + Cstmr Dmnd Grwth 4,665,000 4,795,430 4,942,510 5,074,310 5,235,890 7500 Encina Services (Pension Payoff)No Annual Increase (266,721) (273,876) (281,750) (289,850) 7550 Miscellaneous Outside Services General Inflation 293,500 300,840 308,360 316,070 323,970 7551 Bank Services General Inflation 31,800 32,600 33,420 34,260 35,120 7553 Comm Arts Support General Inflation - - - - - 7554 Regulatory/Permitting Fees General Inflation 45,000 46,130 47,280 48,460 49,670 7556 Misc Services General Inflation - - - - - 7558 Laundry and Uniform Mainteance General Inflation 5,000 5,130 5,260 5,390 5,520 7559 Electrical/SCADA Services General Inflation 15,600 15,990 16,390 16,800 17,220 7560 Water Sampling Services General Inflation - - - - - 7562 FOG Inspection Services General Inflation 61,000 62,530 64,090 65,690 67,330 7563 Smartcover WIFI/Alarm Services General Inflation 50,000 51,250 52,530 53,840 55,190 7564 Landscaping Services General Inflation 60,000 61,500 63,040 64,620 66,240 7710 Ads and Publishing General Inflation 2,000 2,050 2,100 2,150 2,200 7711 Dues and Subscriptions General Inflation 10,500 10,760 11,030 11,310 11,590 7712 Books and Publications General Inflation 500 510 520 530 540 7713 Audio Visual Materials General Inflation - - - - - 7715 Printing General Inflation 7,500 7,690 7,880 8,080 8,280 7720 Postage General Inflation 3,500 3,590 3,680 3,770 3,860 7725 Office Supplies General Inflation 5,000 5,130 5,260 5,390 5,520 7726 Office Furniture & Equipment General Inflation 5,000 5,130 5,260 5,390 5,520 7730 Computer Software General Inflation 10,000 10,250 10,510 10,770 11,040 7731 Misc. Computer Hardware General Inflation 3,000 3,080 3,160 3,240 3,320 7735 Promo Materials General Inflation 5,000 5,130 5,260 5,390 5,520 7745 Food Expense General Inflation - - - - - 7750 Heat and Light Utilities Inflation 285,000 292,130 299,430 306,920 314,590 10/22/2021Jan. 11, 2022 Item #10 Page 194 of 247

CODE LINE ITEM ESCALATOR FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 7751 Telephone & Communications Utilities Inflation 12,000 12,300 12,610 12,930 13,250 7752 Waste Dispoal Services Utilities Inflation 10,000 10,250 10,510 10,770 11,040 7753 Water Utilities Inflation 36,000 36,900 37,820 38,770 39,740 7801 Building Maintenance General Inflation - - - - - 7810 Electrical Supplies General Inflation 500 510 520 530 540 7811 Janitorial Supplies General Inflation 300 310 320 330 340 7820 Parts-Vehicles General Inflation 500 510 520 530 540 7821 Parts-Equip General Inflation 169,000 173,230 177,560 182,000 186,550 7830 Rock and Mineral Products General Inflation 4,000 4,100 4,200 4,310 4,420 7831 Asphalt General Inflation 500 510 520 530 540 7850 Small Tools General Inflation 1,500 1,540 1,580 1,620 1,660 7851 Safety Equipment General Inflation 21,300 21,830 22,380 22,940 23,510 7852 Uniforms and Accessories General Inflation 5,000 5,130 5,260 5,390 5,520 7853 Meters/Fittings General Inflation - - - - - 7857 Personal Protective Equipment General Inflation - - - - - 7880 Gasoline and Oil Utilities Inflation 2,000 2,050 2,100 2,150 2,200 7883 Chemicals Chemicals Inflation 72,000 73,800 75,650 77,540 79,480 7886 Training Supplies General Inflation - - - - - 7896 Medical Supplies - Disposable General Inflation - - - - - 7899 Misc Supplies General Inflation 24,400 25,010 25,640 26,280 26,940 8110 Employee Training General Inflation 3,000 3,080 3,160 3,240 3,320 8120 Tuition Reimbursement General Inflation - - - - - 8130 Training/Training Related Travel General Inflation 3,000 3,080 3,160 3,240 3,320 8500 Depreciation Depreciation Funding 5,300,000 5,363,070 5,425,820 5,488,760 5,551,880 Note: Depreciation transfer for FYE 2023 to FYE 2026 not included in revenue requirement calculations for rate study.8520 Conference Travel General Inflation 500 510 520 530 540 8522 Misc. Meals/Miles General Inflation 6,000 6,150 6,300 6,460 6,620 8530 Bad Debt Exp - Other Inv/Bills General Inflation 40,600 41,620 42,660 43,730 44,820 8532 Disposal of Assets General Inflation - - - - - 8534 Reg Over/Short General Inflation - - - - - 8542 NED Rental Assistance Payments No Annual Increase - - - - - 8544 Lateral Assistance Program No Annual Increase 25,000 25,000 25,000 25,000 25,000 8610 Settlements General Inflation - - - - - 8700 Contingencies No Annual Increase - - - - - 8809 Vehicle Direct Charges General Inflation 18,628 19,090 19,570 20,060 20,560 8810 Vehicle Maintenance (2)General Inflation 92,440 94,750 97,120 99,550 102,040 8811 Vehicle Replacement General Inflation 250,342 256,600 263,020 269,600 276,340 8830 General Liab General Inflation 98,220 100,680 103,200 105,780 108,420 8860 Information Technologies General Inflation 231,260 237,040 242,970 249,040 255,270 8890 Misc Interdepartmental Charges General Inflation 768,005 787,210 806,890 827,060 847,740 8891 Mis Chg Back General Inflation - - - - - 8892 Utility Billing Chargeback General Inflation - - - - - 8910 Fiscal Agent Fees General Inflation - - - - - 8911 Arbitrage Costs General Inflation - - - - - 8920 Principal [ Calculated ]- 114,535 116,826 119,162 121,545 8921 Interest Expense [ Calculated ]- 92,929 90,639 88,302 85,919 8922 Int Exp-Capitalized Interest One Time Expense - - - - - Other - Heat & Light No Annual Increase - - - - - Other - Parts & Equipment No Annual Increase - - - - - Other - Smart Covers No Annual Increase - - - - - Addt'l Maintenance & Equipment General Inflation - - - - - Other Maintenance & Equipment [ Calculated Below ](1,081,941) (1,103,580) (1,125,651) (1,148,164) (1,171,128) Total Maintenance & Equipment Costs 12,196,704$ 12,391,613$ 12,656,547$ 12,907,290$ 13,189,417$ 10/22/2021Jan. 11, 2022 Item #10 Page 195 of 247

CODE LINE ITEM ESCALATOR FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 Capital Outlay
9005 Capital Outlay $10k - Repl General Inflation - - - - - 9021 Office Equipment General Inflation - - - - - 9022 Other Equipment General Inflation - - - - - 9030 Office Furniture General Inflation - - - - - 9050 Capitalized Assets General Inflation - - - - - Other Capital Outlay General Inflation - - - - - Total Capital Outlay Costs -$ -$ -$ -$ -$ Other Financing Uses
9999 Additional Transfer to Capital Fund One Time Expense -$ -$ -$ -$ -$ Transfer Out - Debt Service General Inflation - - - - - Total Other Financing Uses Costs -$ -$ -$ -$ -$ TOTAL EXPENDITURES 14,975,533$ 15,374,425$ 15,743,022$ 16,103,844$ 16,490,278$ TOTAL W/O DEPR & TRANSFER TO CAPITAL 9,675,533$ 10,011,355$ 10,317,202$ 10,615,084$ 10,938,398$ RATE REVENUES WITHOUT INCREASES FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 Commodity Usage Customer Demand Growth 14,007,136$ 14,048,576$ 14,128,254$ 14,151,796$ 14,248,623$ Sewer Pre-Treat Customer Demand Growth 19,614$ 19,672 19,783 19,816 19,952 Sewer Laterals Customer Demand Growth -$ - - - - Other Charges for Services General Inflation -$ - - - - 14,026,750$ 14,068,248$ 14,148,037$ 14,171,613$ 14,268,575$ 10/22/2021Jan. 11, 2022 Item #10 Page 196 of 247

WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix C

CAPITAL IMPROVEMENT PLAN

Jan. 11, 2022 Item #10 Page 197 of 247

SEWER REPLACEMENT PROJECTS FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026Include Project ID Project Title Total Budget55451 Agua Hedionda Lift Station Biological Monitoring and Maintenance 675,000$ 225,000$ 55371 Buena Interceptor Sewer Access Road Improvements 2,399,296 100,000 100,000 949,296 55011 Buena Interceptor Sewer Improvements 7,704,307 - 200,000 800,000 900,000 900,000 55441 Buena Interceptor Sewer Realignment - East Segment 3,040,000 - 408,646 1,013,000 1,013,000 55521 Cannon Road Lift Station Improvements 1,280,000 300,000 530,000 58011 Encina Capital Projects 176,218,362 11,786,234 7,132,000 7,737,000 8,487,000 8,240,000 55261 Foxes Landing Lift Station Wetwell and Pump Replacement 6,916,834 473,534 55471 North Batiquitos Access Road Improvement 640,000 50,000 200,000 90,000 55361 North Batiquitos Lift Station Forcemain Rehabilitation 1,711,743 300,000 545,897 55201 Odor and Corrosion Prevention Assessment 881,846 280,923 35723 Orion Center - 3,902,727 55421 SCADA Improvements 5,764,881 100,000 3,000,000 175,165 380,734 55131 Sewer Condition Assessment 3,535,992 250,000 100,000 100,000 38401 Sewer Lift Station Repairs and Upgrades 7,937,084 1,418,218 150,000 150,000 150,000 150,000 55481 Sewer Line Capacity Improvements 3,473,000 200,000 1,000,000 1,873,000 55031 Sewer System Rehabilitation and Replacement 43,065,897 1,610,637 1,200,000 1,850,000 1,900,000 1,000,000 60544 Terramar area coastal improvements -
55491 Vallecitos Interceptor Sewer Cleaning and CCTV 750,000 250,000 40153 Village/Bario traffic circles 159,452
55501 Villas Sewer Lift Station Replacement 2,052,614 934,675 55511 Vista Carlsbad Interceptor - Rehabilitation (VC1 and VC2)2,217,946 140,946 1,795,000 - -
Encina Supplemental Invoice 600,000 - Project Adjustments from Dashboard - - - - - - TOTAL SEWER REPLACEMENT PROJECTS 270,864,803$ 18,579,620$ 19,009,727$ 14,689,004$ 13,020,734$ 11,403,000$ Jan. 11, 2022 Item #10 Page 198 of 247

SUMMARY OF SEWER REPLACEMENT PROJECTS UNESCALATED ESCALATED FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 20265-YEAR CIP (2022-2026)UNESCALATEDR&R 76,702,085$ 81,511,441$ R&R 18,579,620$ 19,009,727$ 14,689,004$ 13,020,734$ 11,403,000$ Expansion - - Expansion - - - - - TOTAL:76,702,085$ 81,511,441$ Total 18,579,620$ 19,009,727$ 14,689,004$ 13,020,734$ 11,403,000$ 10-YEAR CIP (2022-2031)ESCALATED
R&R 134,874,085$ 155,532,599$ R&R 18,579,620$ 19,675,067$ 15,735,228$ 14,436,321$ 13,085,205$ Expansion - - Expansion - - - - - TOTAL:134,874,085$ 155,532,599$ Total 18,579,620$ 19,675,067$ 15,735,228$ 14,436,321$ 13,085,205$ TOTAL CIP (2022-2035)
R&R 179,074,085$ 221,231,404$
Expansion - -
TOTAL:179,074,085$ 221,231,404$
Jan. 11, 2022 Item #10 Page 199 of 247

SEWER CONNECTION PROJECTS FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026Include Project ID Project Title Total Budget55012 Buena Interceptor Sewer Improvements 700,000$ 10,000$ 10,000$ 10,000$ 10,000$ 10,000$ 55531 El Fuerte Lift Station Pump Addition 960,000 -$ 360,000 600,000 55391 Faraday and El Camino Real Sewer Replacement - Orion to Palomar Airport Road1,620,000 140,000$ 1,200,000 55401 Las Palmas Trunk Sewer 4,019,000 -$ 100,000 200,000 256,000 2,907,000 Loan Repay - Sewer Conn to Sewer Repl 3,760,000 -$ 55461 Sewer Modeling 624,077 55,089$ 50,000 50,000 50,000 50,000 55041 Sewer Monitoring Program (Capacity)1,392,000 -$ 70,000 70,000 70,000 70,000 34921 Vista Carlsbad Interceptor - Agua Hedionda LS and Forcemain (VC12-VC13)33,828,153 1,051,426$ 55351 Vista Carlsbad Interceptor - Buena Vista Lift Station Improvements 5,504,530 79,265$ 200,000 800,000 38861 Vista Carlsbad Interceptor - Lagoon Bridge Replacement (VC11B)9,430,772 (53,671)$ 39501 Vista Carlsbad Interceptor - Reach VC3 3,286,000 -$ 100,000 497,000 2,092,000 39491 Vista Carlsbad Interceptor - Reach VC14 To VC15 21,749,134 -$ 146,196 Project Adjustments From Dashboard - - - - - - TOTAL SEWER CONNECTION PROJECTS 86,873,667$ 1,282,109$ 1,676,196$ 1,387,000$ 3,878,000$ 3,037,000$ Jan. 11, 2022 Item #10 Page 200 of 247

SUMMARY OF SEWER CONNECTION PROJECTS UNESCALATED ESCALATED FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 20265-YEAR CIP (2022-2026)UNESCALATEDR&R -$ -$ R&R -$ -$ -$ -$ -$ Expansion 11,260,305 12,287,396 Expansion 1,282,109 1,676,196 1,387,000 3,878,000 3,037,000 TOTAL:11,260,305$ 12,287,396$ Total 1,282,109$ 1,676,196$ 1,387,000$ 3,878,000$ 3,037,000$ 10-YEAR CIP (2022-2031)ESCALATED
R&R -$ -$ R&R -$ -$ -$ -$ -$ Expansion 14,810,305 16,809,334 Expansion 1,282,109 1,734,863 1,485,789 4,299,608 3,485,027 TOTAL:14,810,305$ 16,809,334$ Total 1,282,109$ 1,734,863$ 1,485,789$ 4,299,608$ 3,485,027$ TOTAL CIP (2022-2035)
R&R -$ -$
Expansion 18,730,305 22,636,016
TOTAL:18,730,305$ 22,636,016$
Jan. 11, 2022 Item #10 Page 201 of 247

CIP TOTALS UNESCALATED ESCALATED COSTS(FYE 21 -35)FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 20265-YEAR CIP (2022-2026)UNESCALATEDR&R 76,702,085$ 81,511,441$ R&R 18,579,620$ 19,009,727$ 14,689,004$ 13,020,734$ 11,403,000$ Expansion 11,260,305 12,287,396 Expansion 1,282,109 1,676,196 1,387,000 3,878,000 3,037,000 TOTAL:87,962,390$ 93,798,837$ Total 19,861,729$ 20,685,923$ 16,076,004$ 16,898,734$ 14,440,000$ 10-YEAR CIP (2022-2031)ESCALATED
R&R 134,874,085$ 155,532,599$ R&R 18,579,620$ 19,675,067$ 15,735,228$ 14,436,321$ 13,085,205$ Expansion 14,810,305 16,809,334 Expansion 1,282,109 1,734,863 1,485,789 4,299,608 3,485,027 TOTAL:149,684,390$ 172,341,934$ Total 19,861,729$ 21,409,930$ 17,221,017$ 18,735,928$ 16,570,232$ Jan. 11, 2022 Item #10 Page 202 of 247

WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix D
REVENUE REQUIREMENT ANALYSIS – OPTION 1

Jan. 11, 2022 Item #10 Page 203 of 247

2022 2023 2024 2025 2026

CITY OF CARLSABAD
Wastewater Financial Model
Revenue Requirement
FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026

CASH FLOW TESTS

REVENUES
Charges for Services 14,026,750$ 16,881,900$ 20,373,170$ 24,488,540$ 25,642,330$ Fines and Forfeitures 30,399 30,490 30,660 30,710 30,920 Income from Property & Investments 75,000 90,360 98,440 110,280 113,480 Interdepartmental 15,931 16,330 16,740 17,160 17,590 Other Revenues 68,672 70,390 72,150 73,960 75,810 TOTAL REVENUES 14,216,752$ 17,089,470$ 20,591,160$ 24,720,650$ 25,880,130$

EXPENDITURES
Ongoing Operating Expenses - Without Depreciation
Personnel 2,778,829$ 2,982,811$ 3,086,475$ 3,196,554$ 3,300,861$ Encina Operations 4,665,000 4,795,430 4,942,510 5,074,310 5,235,890 Maintenance & Equipment 3,313,645 2,921,765 2,998,940 3,077,456 3,157,846 Capital Outlay - - - - - Transfer Out - Debt Service - - - - - Other Operating Expenses
One-time Funding (Budget Analysis Amount)(1,081,941) (1,103,580) (1,125,651) (1,148,164) (1,171,128) Rate Funded Capital - - 4,643,925 10,569,362 12,317,273 Debt Service - 207,464 207,464 207,464 207,464 Total Operating Expenditures 9,675,533$ 9,803,890$ 14,753,663$ 20,976,982$ 23,048,207$ Policy Expenditures
Replacement Funding - Depreciation 5,300,000$ -$ -$ -$ -$ Additional Transfer to Capital Fund - - - - - Additions to Meet Minimum Fund Balances - - - - - Total Policy Expenditures 5,300,000$ -$ -$ -$ -$ POLICY OVERRIDES (input in Dashboard)
Replacement Funding No Override -$ -$ -$ -$ Additional Transfer to Capital Fund -$ -$ -$ -$ -$ Additions to Meet Minimum Fund Balances (*)-$ -$ -$ -$ -$ TOTAL EXPENDITURES 14,975,533$ 9,803,890$ 14,753,663$ 20,976,982$ 23,048,207$ CASH FLOW SURPLUS (DEFICIT)(758,781)$ 7,285,580$ 5,837,497$ 3,743,668$ 2,831,923$

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026

DEBT COVERAGE TEST

1.25 x Bond Coverage

REVENUES
Operating Revenues 14,216,752$ 17,089,470$ 20,591,160$ 24,720,650$ 25,880,130$ Connection Fee Revenues Allowed
TOTAL REVENUES 14,216,752$ 17,089,470$ 20,591,160$ 24,720,650$ 25,880,130$

EXPENDITURES
Personnel 2,778,829$ 2,982,811$ 3,086,475$ 3,196,554$ 3,300,861$ Encina Operations 4,665,000 4,795,430 4,942,510 5,074,310 5,235,890 Maintenance & Equipment 3,313,645 2,921,765 2,998,940 3,077,456 3,157,846 Debt Service - 207,464 207,464 207,464 207,464 One-time Funding (Budget Analysis Amount)(1,081,941) (1,103,580) (1,125,651) (1,148,164) (1,171,128) Coverage - 51,866 51,866 51,866 51,866 TOTAL EXPENDITURES 9,675,533$ 9,855,756$ 10,161,604$ 10,459,486$ 10,782,799$ BOND COVERAGE SURPLUS (DEFICIT)4,541,219$ 7,233,714$ 10,429,556$ 14,261,164$ 15,097,331$ 10/25/2021Jan. 11, 2022 Item #10 Page 205 of 247

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026

REVENUE REQUIREMENT
Revenue Requirement (758,781)$ 7,233,714$ 5,837,497$ 3,743,668$ 2,831,923$ Cash Flow Driven Surplus Surplus Surplus Surplus
Month of implementation March January January January January Calculated Increase (%)16.23%0.00%0.00%0.00%0.00%
Rate Increase Override (INPUT in Dashboard)20.00% 20.00% 20.00%4.00%4.00% Rate Increase (%)20.00%20.00% 20.00%4.00%4.00%
Cumulative Rate Increase (%) 27.4%55.1%86.0%93.5%101.2% SFR Rate $35.43 $43.12 $51.74 $53.81 $55.96

CASH FLOW
Revenues Before Rate Increase 14,216,752$ 17,089,470$ 20,591,160$ 24,720,650$ 25,880,130$ Revenues From Rate Increase 2,805,350 3,376,380 4,074,634 979,542 1,025,693 Less: Rate Increase Delay (1,870,233) (1,688,190) (2,037,317) (489,771) (512,847) Less: Expenditures (14,975,533) (9,803,890) (14,753,663) (20,976,982) (23,048,207) Cash Flow 176,336$ 8,973,770$ 7,874,814$ 4,233,439$ 3,344,770$ RATE REVENUE REQUIREMENT 16,832,100$ 20,258,280$ 24,447,804$ 25,468,082$ 26,668,023$ Total Ending Balance 24,069,814$ 16,546,415$ 12,154,816$ 8,644,609$ 7,884,098$ 908 Days 629 Days 448 Days 309 Days 273 Days
Operating Fund
Beginning Balance 8,111,281$ 4,302,990$ 4,280,002$ 4,411,170$ 4,539,328$ Cash Flow 176,336 8,973,770 7,874,814 4,233,439 3,344,770 Transfers from Operating to Capital Fund (3,984,627) (8,996,757) (7,743,647) (4,105,281) (3,206,259) Ending Operating Fund Balance 4,302,990$ 4,280,002$ 4,411,170$ 4,539,328$ 4,677,839$ 10/25/2021Jan. 11, 2022 Item #10 Page 206 of 247

WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix E
REVENUE REQUIREMENT ANALYSIS – OPTION 2

Jan. 11, 2022 Item #10 Page 207 of 247

2022 2023 2024 2025 2026

CITY OF CARLSABAD
Wastewater Financial Model
Revenue Requirement
FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026

CASH FLOW TESTS

REVENUES
Charges for Services 14,026,750$ 21,102,370$ 22,070,930$ 22,992,020$ 24,075,300$ Fines and Forfeitures 30,399 30,490 30,660 30,710 30,920 Income from Property & Investments 75,000 90,360 98,440 110,280 113,480 Interdepartmental 15,931 16,330 16,740 17,160 17,590 Other Revenues 68,672 70,390 72,150 73,960 75,810 TOTAL REVENUES 14,216,752$ 21,309,940$ 22,288,920$ 23,224,130$ 24,313,100$

EXPENDITURES
Ongoing Operating Expenses - Without Depreciation
Personnel 2,778,829$ 2,982,811$ 3,086,475$ 3,196,554$ 3,300,861$ Encina Operations 4,665,000 4,795,430 4,942,510 5,074,310 5,235,890 Maintenance & Equipment 3,313,645 2,921,765 2,998,940 3,077,456 3,157,846 Capital Outlay - - - - - Transfer Out - Debt Service - - - - - Other Operating Expenses
One-time Funding (Budget Analysis Amount)(1,081,941) (1,103,580) (1,125,651) (1,148,164) (1,171,128) Rate Funded Capital - - 221,920 5,988,947 9,225,134 Debt Service - 207,464 207,464 207,464 207,464 Total Operating Expenditures 9,675,533$ 9,803,890$ 10,331,657$ 16,396,567$ 19,956,067$ Policy Expenditures
Replacement Funding - Depreciation 5,300,000$ -$ -$ -$ -$ Additional Transfer to Capital Fund - - - - - Additions to Meet Minimum Fund Balances - - - - - Total Policy Expenditures 5,300,000$ -$ -$ -$ -$ POLICY OVERRIDES (input in Dashboard)
Replacement Funding No Override -$ -$ -$ -$ Additional Transfer to Capital Fund -$ -$ -$ -$ -$ Additions to Meet Minimum Fund Balances (*)-$ -$ -$ -$ -$ TOTAL EXPENDITURES 14,975,533$ 9,803,890$ 10,331,657$ 16,396,567$ 19,956,067$ CASH FLOW SURPLUS (DEFICIT)(758,781)$ 11,506,050$ 11,957,263$ 6,827,563$ 4,357,033$

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026

DEBT COVERAGE TEST

1.25 x Bond Coverage

REVENUES
Operating Revenues 14,216,752$ 21,309,940$ 22,288,920$ 23,224,130$ 24,313,100$ Connection Fee Revenues Allowed
TOTAL REVENUES 14,216,752$ 21,309,940$ 22,288,920$ 23,224,130$ 24,313,100$

EXPENDITURES
Personnel 2,778,829$ 2,982,811$ 3,086,475$ 3,196,554$ 3,300,861$ Encina Operations 4,665,000 4,795,430 4,942,510 5,074,310 5,235,890 Maintenance & Equipment 3,313,645 2,921,765 2,998,940 3,077,456 3,157,846 Debt Service - 207,464 207,464 207,464 207,464 One-time Funding (Budget Analysis Amount)(1,081,941) (1,103,580) (1,125,651) (1,148,164) (1,171,128) Coverage - 51,866 51,866 51,866 51,866 TOTAL EXPENDITURES 9,675,533$ 9,855,756$ 10,161,604$ 10,459,486$ 10,782,799$ BOND COVERAGE SURPLUS (DEFICIT)4,541,219$ 11,454,184$ 12,127,316$ 12,764,644$ 13,530,301$ 10/25/2021Jan. 11, 2022 Item #10 Page 209 of 247

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026

REVENUE REQUIREMENT
Revenue Requirement (758,781)$ 11,454,184$ 11,957,263$ 6,827,563$ 4,357,033$ Cash Flow Driven Surplus Surplus Surplus Surplus
Month of implementation March January January January January Calculated Increase (%)16.23%0.00%0.00%0.00%0.00%
Rate Increase Override (INPUT in Dashboard)50.00%4.00%4.00%4.00%4.00% Rate Increase (%)50.00%4.00%4.00%4.00%4.00%
Cumulative Rate Increase (%) 59.2%68.0%74.7%81.7%89.0%
SFR Rate $44.28 $46.71 $48.58 $50.52 $52.55

CASH FLOW
Revenues Before Rate Increase 14,216,752$ 21,309,940$ 22,288,920$ 23,224,130$ 24,313,100$ Revenues From Rate Increase 7,013,375 844,095 882,837 919,681 963,012 Less: Rate Increase Delay (4,675,583) (422,047) (441,419) (459,840) (481,506) Less: Expenditures (14,975,533) (9,803,890) (10,331,657) (16,396,567) (19,956,067) Cash Flow 1,579,011$ 11,928,097$ 12,398,681$ 7,287,404$ 4,838,539$ RATE REVENUE REQUIREMENT 21,040,125$ 21,946,465$ 22,953,767$ 23,911,701$ 25,038,312$ Total Ending Balance 25,472,489$ 20,918,146$ 16,678,683$ 11,698,574$ 9,377,867$ 961 Days 796 Days 615 Days 419 Days 325 Days
Operating Fund
Beginning Balance 8,111,281$ 4,302,990$ 4,280,002$ 4,411,170$ 4,539,328$ Cash Flow 1,579,011 11,928,097 12,398,681 7,287,404 4,838,539 Transfers from Operating to Capital Fund (5,387,302) (11,951,084) (12,267,514) (7,159,245) (4,700,028) Ending Operating Fund Balance 4,302,990$ 4,280,002$ 4,411,170$ 4,539,328$ 4,677,839$ 10/25/2021Jan. 11, 2022 Item #10 Page 210 of 247

WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix F
FUNCTIONAL ALLOCATION – OPTION 1

Jan. 11, 2022 Item #10 Page 211 of 247

TEST YEAR:FYE 2022
ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS
Treatment Flow/BOD/TSS 37.8%35.7%26.5%0.0%0.0%
50 Percent Customer 0.0%0.0%0.0%0.0%100.0%
Admin 0.0%0.0%0.0%0.0%100.0%Allocation 4 0.0%0.0%0.0%0.0%100.0%Allocation 5 0.0%0.0%0.0%0.0%100.0%Allocation 6 0.0%0.0%0.0%0.0%100.0%Allocation 7 0.0%0.0%0.0%0.0%100.0%Flow Only 100.0%0.0%0.0%0.0%0.0%Customer Only 0.0%0.0%0.0%0.0%100.0% As Weighted Average 0.0%0.0%0.0%0.0%100.0%
Collections 5.0%5.0%90.0%0.0%
Staff Allocation 0.0%2.6%2.6%47.7%47.0%
Vehicles 0.0%4.4%4.4%79.8%11.3%
Uniforms 0.0%5.0%5.0%90.0%0.0%
Miscellaneous Professional Services - 7490 0.0%0.0%0.0%0.0%100.0% Miscellaneous Outside Services - 7550 0.0%0.0%0.0%0.0%100.0% Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%
Weighted Average O&M 25.6%25.8%19.5%29.1%
Weighed Average Revenue Requirements 23.6%23.2%19.7%33.5%

PLANT IN SERVICE RCNLD TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS
IM - IMPROVEMENTS 7,187,260$ 100.0%0% JV - JOINT VENTURE 52,584,214 37.8%35.7%26.5%0% LD - LAND 2,629,102 100% ME - MACHINERY & EQUIPMENT 533,994 100% PP - PIPES & PUMPING 68,948,492 5.0%5.0%90.0%0% Plant-In-Service Sub Total 131,883,062$ 19,884,649$ 22,213,611$ 17,380,804$ 69,240,902$ 3,163,096$ Reallocation of "As All Others"488,635$ 545,865$ 427,107$ 1,701,489$ (3,163,096)$ Total Allocation 131,883,062$ 20,373,284$ 22,759,476$ 17,807,911$ 70,942,391$ -$ Percentage Allocation 100%15.4%17.3%13.5%53.8%0.0%
10/22/2021Jan. 11, 2022 Item #10 Page 212 of 247

ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS

EXPENDITURES
Personnel
Reg Salaries 1,784,827$ Staff Allocation 0.0%2.6%2.6%47.7%47.0%Incentive Pay - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Hazard Pay 31,602 Staff Allocation 0.0%2.6%2.6%47.7%47.0% IOD Worker's Comp - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Overtime Salaries 60,000 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Standby Pay 26,000 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Parttimes Salaries 18,776 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Intern Salaries 7,429 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Temporary Help - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Health Insurance 318,780 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Life Insurance 1,270 Staff Allocation 0.0%2.6%2.6%47.7%47.0% AD&D - City Paid 635 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Vision Insurance - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Medicare 27,859 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Cell Phone Reimbursement - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Auto Allowance 1,138 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Earned Leave Accrual - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Healthy Emp Awards - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Final Vacation Pay 17,000 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Final Sick Leave Pay - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Disability 16,146 Staff Allocation 0.0%2.6%2.6%47.7%47.0%Unemployment 9,129 Staff Allocation 0.0%2.6%2.6%47.7%47.0%Worker's Compensation 32,250 Staff Allocation 0.0%2.6%2.6%47.7%47.0%PERS 220,696 Staff Allocation 0.0%2.6%2.6%47.7%47.0%PERS Unfunded Liab Exp 204,586 Staff Allocation 0.0%2.6%2.6%47.7%47.0%PERS (GASB 68 CONTRA ACCOUNT)- Staff Allocation 0.0%2.6%2.6%47.7%47.0%Operation Expense - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Social Security - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Deferred Comp 705 Staff Allocation 0.0%2.6%2.6%47.7%47.0% Other Personnel - Staff Allocation 0.0%2.6%2.6%47.7%47.0% Maintenance & Equipment
Other Mach & Equip -$ As Weighted Average 0.0%0.0%0.0%0.0%100.0% Vehicle Rentals - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Misc Rentals 6,500 Collections 0.0%5.0%5.0%90.0%0.0%Misc Leases - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Office Equip Maint - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Communication Equip Maintenance 1,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0%Software Maintenance 46,650 As Weighted Average 0.0%0.0%0.0%0.0%100.0%Computer Maintenance - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Vehicle Maintenance 15,000 Collections 0.0%5.0%5.0%90.0%0.0% Wash and Wax 4,500 Collections 0.0%5.0%5.0%90.0%0.0% Other Equip Maint - Collections 0.0%5.0%5.0%90.0%0.0% Pipeline Maintenance 145,000 Collections 0.0%5.0%5.0%90.0%0.0% Routine Building Maintenance - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Asphalt Repairs 10,000 Collections 0.0%5.0%5.0%90.0%0.0% Maintenance, Repair and Rehab 3,000 Collections 0.0%5.0%5.0%90.0%0.0% Audit - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Legal - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Administrative - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Misc Professional Services 287,100 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Encina Services 4,665,000 Treatment Flow/BOD/TSS 37.8%35.7%26.5%0.0%0.0% Encina Services (Pension Payoff)- Treatment Flow/BOD/TSS 37.8%35.7%26.5%0.0%0.0% Miscellaneous Outside Services 293,500 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Bank Services 31,800 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Comm Arts Support - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Regulatory/Permitting Fees 45,000 Collections 0.0%5.0%5.0%90.0%0.0% Misc Services - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Laundry and Uniform Mainteance 5,000 Collections 0.0%5.0%5.0%90.0%0.0%Electrical/SCADA Services 15,600 Collections 0.0%5.0%5.0%90.0%0.0%Water Sampling Services - As Weighted Average 0.0%0.0%0.0%0.0%100.0%FOG Inspection Services 61,000 Collections 0.0%5.0%5.0%90.0%0.0%Smartcover WIFI/Alarm Services 50,000 Collections 0.0%5.0%5.0%90.0%0.0%Landscaping Services 60,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0%Ads and Publishing 2,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Dues and Subscriptions 10,500 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Books and Publications 500 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Audio Visual Materials - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Printing 7,500 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Postage 3,500 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Office Supplies 5,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Office Furniture & Equipment 5,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Computer Software 10,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Misc. Computer Hardware 3,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Promo Materials 5,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Food Expense - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Heat and Light 285,000 Collections 0.0%5.0%5.0%90.0%0.0% Telephone & Communications 12,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Waste Dispoal Services 10,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Water 36,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Building Maintenance - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Electrical Supplies 500 Collections 0.0%5.0%5.0%90.0%0.0% Janitorial Supplies 300 As Weighted Average 0.0%0.0%0.0%0.0%100.0% 10/22/2021Jan. 11, 2022 Item #10 Page 213 of 247

ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS
Parts-Vehicles 500 Collections 0.0%5.0%5.0%90.0%0.0% Parts-Equip 169,000 Collections 0.0%5.0%5.0%90.0%0.0% Rock and Mineral Products 4,000 Collections 0.0%5.0%5.0%90.0%0.0% Asphalt 500 Collections 0.0%5.0%5.0%90.0%0.0% Small Tools 1,500 Collections 0.0%5.0%5.0%90.0%0.0% Safety Equipment 21,300 Collections 0.0%5.0%5.0%90.0%0.0% Uniforms and Accessories 5,000 Collections 0.0%5.0%5.0%90.0%0.0% Meters/Fittings - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Personal Protective Equipment - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Gasoline and Oil 2,000 Collections 0.0%5.0%5.0%90.0%0.0% Chemicals 72,000 Collections 0.0%5.0%5.0%90.0%0.0% Training Supplies - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Medical Supplies - Disposable - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Misc Supplies 24,400 As Weighted Average 0.0%0.0%0.0%0.0%100.0%Employee Training 3,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0%Tuition Reimbursement - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Training/Training Related Travel 3,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0%Depreciation Included Below As Weighted Average 0.0%0.0%0.0%0.0%100.0% Conference Travel 500 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Misc. Meals/Miles 6,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Bad Debt Exp - Other Inv/Bills 40,600 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Disposal of Assets - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Reg Over/Short - As Weighted Average 0.0%0.0%0.0%0.0%100.0% NED Rental Assistance Payments - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Lateral Assistance Program 25,000 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Settlements - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Contingencies - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Vehicle Direct Charges 18,628 Vehicles 0.0%4.4%4.4%79.8%11.3% Vehicle Maintenance (2)92,440 Vehicles 0.0%4.4%4.4%79.8%11.3% Vehicle Replacement 250,342 Vehicles 0.0%4.4%4.4%79.8%11.3% General Liab 98,220 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Information Technologies 231,260 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Misc Interdepartmental Charges 768,005 As Weighted Average 0.0%0.0%0.0%0.0%100.0% Mis Chg Back - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Utility Billing Chargeback - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Fiscal Agent Fees - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Arbitrage Costs - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Principal - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Interest Expense - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Int Exp-Capitalized Interest - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Other - Heat & Light - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Other - Parts & Equipment - As Weighted Average 0.0%0.0%0.0%0.0%100.0%Other - Smart Covers - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Addt'l Maintenance & Equipment - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Other Maintenance & Equipment (1,081,941) [Non-Encina O&M]0.0%2.2%2.2%40.1%55.4% Capital Outlay
Capital Outlay $10k - Repl - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Office Equipment - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Other Equipment - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Office Furniture - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Capitalized Assets - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Other Capital Outlay - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Operating Expenditures Sub Total 9,675,533$ 1,764,063$ 1,776,485$ 1,347,743$ 2,009,624$ 2,777,618$ Reallocation of "As All Others"710,344$ 715,346$ 542,703$ 809,225$ (2,777,618)$ Total Allocation 9,675,533$ 2,474,408$ 2,491,831$ 1,890,446$ 2,818,849$ -$ Percentage Allocation 100.0%25.6%25.8%19.5%29.1%
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ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS
OPERATING EXPENSES (from above)9,675,533$ 25.6%25.8%19.5%29.1%0.0% NON-OPERATING EXPENSESReplacement Funding - Depreciation (Depreciation)5,300,000 Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Rate Funded Capital - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Debt Service - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Additional Transfer to Capital Fund - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Transfer Out - Debt Service - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Adjustment for Mid Year Increase 1,870,233 As Weighted Average 0.0%0.0%0.0%0.0%100.0% LESS: Offsetting Revenues
Over/Under Collection of Revenues (Available for Capital or Reserves)176,336$ As Weighted Average 0.0%0.0%0.0%0.0%100.0% Fines and Forfeitures (30,399) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Income from Property & Investments (75,000) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Interdepartmental (15,931) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Other Revenues (68,672) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Total Rate Revenues to be Collected 16,832,100$ 3,535,183$ 3,472,168$ 2,947,271$ 5,020,911$ 1,856,567$ Reallocation of "As All Others"438,268$ 430,456$ 365,383$ 622,459$ (1,856,567)$ Total Allocation 16,832,100$ 3,973,451$ 3,902,625$ 3,312,654$ 5,643,370$ -$ Percentage Allocation 100%23.6%23.2%19.7%33.5%0.0%
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WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix G
FUNCTIONAL ALLOCATION – OPTION 2

Jan. 11, 2022 Item #10 Page 216 of 247

TEST YEAR:FYE 2022
ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

PLANT IN SERVICE RCNLD TREATMENT FLOW BOD TSS COLLECTION

ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS

ALLOCATION INDEX FYE 2022 TREATMENT FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS
OPERATING EXPENSES (from above)9,675,533$ 25.6%25.8%19.5%29.1%0.0% NON-OPERATING EXPENSESReplacement Funding - Depreciation (Depreciation)5,300,000 Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0%Rate Funded Capital - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Debt Service - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Additional Transfer to Capital Fund - Capital Improvement Plan 20.0%18.5%19.9%41.5%0.0% Transfer Out - Debt Service - As Weighted Average 0.0%0.0%0.0%0.0%100.0% Adjustment for Mid Year Increase 4,675,583 As Weighted Average 0.0%0.0%0.0%0.0%100.0% LESS: Offsetting Revenues
Over/Under Collection of Revenues (Available for Capital or Reserves)1,579,011$ As Weighted Average 0.0%0.0%0.0%0.0%100.0% Fines and Forfeitures (30,399) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Income from Property & Investments (75,000) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Interdepartmental (15,931) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Other Revenues (68,672) As Weighted Average 0.0%0.0%0.0%0.0%100.0% Total Rate Revenues to be Collected 21,040,125$ 3,535,183$ 3,472,168$ 2,947,271$ 5,020,911$ 6,064,592$ Reallocation of "As All Others"1,431,631$ 1,406,113$ 1,193,547$ 2,033,302$ (6,064,592)$ Total Allocation 21,040,125$ 4,966,814$ 4,878,281$ 4,140,818$ 7,054,213$ -$ Percentage Allocation 100%23.6%23.2%19.7%33.5%0.0%
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WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix H
OPTION 2 RATE CALCULATIONS

Jan. 11, 2022 Item #10 Page 221 of 247

Cost of Service Analysis Tables for Option
The following tables show the results of the cost of service analysis discussed in Section based on Option rate increases. The table numbers below correspond to those in the report body.

Table Option - Expenditures and Offsetting Revenues (in millions) FYE &
O&M Expenses )*.+,
Replacement Funding )-..&
Adjustment for Mid-Year Increase ).+,
Operating Cash Flows ).-,
Less: Offsetting Revenues ()&.*)
Rate Revenues Required .
* Line or column totals may not tie due to rounding

Table . Option - Functional Allocation Factors
Allocation Factor Treatment
Flow BOD TSS Collection
Flow
As All Other
(Weighted
Average)
Total
Treatment Flow/BOD/TSS .8.,% .-.8% +.-% &.&% &.&% &&%
Collections &.&% -.&% -.&% *&.&% &.&% &&%
Staff Allocation &.&% .+% .+% 8.8% 8.&% &&%
Vehicles &.&% .% .% 8*.,% ..% &&%
Capital Improvement Plan &.&% ,.-% *.*% .-% &.&% &&%
Weighted Average O&M -.+% -.,% *.-% *.% N/A &&%
Weighted Average Total Rate
Revenue Requirements ..+% ..% *.8% ...-% N/A &&%
* Line or column totals may not tie due to rounding
No change from Option .

Jan. 11, 2022 Item #10 Page 222 of 247

Table Option - CIP Functional Allocation CIP Allocation Treatment Flow BOD TSS Collection Flow Ten-Year Total Encina Projects - Treatment )*.& )+., ),.*. - ),.,& Carlsbad Projects - Collections - - - )+.,, )+.,, Less: Debt Funded Projects - - - ().+&) ().+&) Allocated Cash Funded CIP Costs .. /.0 0..1 /.0 2.0 CIP Percentage Allocation .% 0.2% ...% .2% % * Line or column totals may not tie due to rounding No change from Option . Table - Option - O&M Functional Allocation O&M Cost Allocation Treatment Flow BOD TSS Collection Flow As All Other (Weighted Average) Total Personnel - )&.&8 )&.&8 )... ).. ).8, Maintenance & Equipment - )&.&+ )&.&+ ). ).&8 )... Encina Services ).8+ ).++ ). - - ).+8 Capital Outlay - - - - - - Budget Adjustment - ()&.&) ()&.&) ()&..) ()&.+&) ().&,) Allocated Costs .6/ .60 .12 . .60 ../0 Reallocation of "As All Other" )&.8 )&.8 )&.- )&., ().8,) - Total O&M Allocation .6 .. .0. .0 - ../0 O&M Percentage Allocation 2./% 2.0% ..2% ..% % * Line or column totals may not tie due to rounding No change from Option . Jan. 11, 2022Item #10 Page 223 of 247

Table + Option - Revenue Requirements Functional Allocation Revenue Requirements Allocation Treatment Flow BOD TSS Collection Flow As All Other (Weighted Average) Total Allocated O&M ).8 ).* ).,* )., - )*.+, Replacement Funding ).&+ )&.*, ).&+ ).& - )-..& Adjustment for Mid-Year Increase - - - - ).+, ).+, Operating Cash Flows - - - - ).-, ).-, Less: Offsetting Revenues - - - - ()&.*) ()&.*) Allocated Costs 1.2 1.6 ..2 2. /./ . Reallocation of "As All Other" ).. ). ).* ).&. ()+.&+) - Total O&M Allocation ..6 .00 . 6.2 . O&M Percentage Allocation 1./% 1.% ..6% 11.2% * Line or column totals may not tie due to rounding Jan. 11, 2022Item #10 Page 224 of 247

Rate Design Analysis Tables for Option
The following tables show the results of the cost of service analysis discussed in Section - based on Option rate increases. The table numbers below correspond to those in the report body.

Table , Option - Billed Units by Customer Class for FY &/ Customer Class Monthly Account Flow BOD TSS
GROUP I - SFR & Minimum Charges ,8 ,-,-&- ,,,+,, ,,,+,, GROUP I - MFR/Mobile Homes *88 -8,-,+ ++,* ++,*
GROUP II - Commercial ,.8 .,+-, 88,*+* -8,-
GROUP III - Commercial . .-- .-*,,& 8.+,.8 +-,,&
GROUP IV - Commercial ., &-,&,+ -.8,*&* +,&8
Other (No Accounts) ++ -,,*&8 8,,& .+,88
Brewery - B , ,,*- ,,+8 ,+-
Brewery - B .,.&, ..,+ ,-&,
GROUP VI - Large Volume (no accounts) & & & &
Industrial Pretreatment Class III + ,.,+ ,,8. .,.&
GROUP V - Elementary Schools 8 ,,8* 8,.8 -,*&
GROUP V - Junior High Schools -,, ,. .,-8
GROUP V - High Schools 8 *,+-8 8,,.+ +,&,
GROUP V - Boarding Schools . -,.8. ,.+& .,.-
Total /,02 1,6/,/22 2,1,11/ 2,1,01
* Line or column totals may not tie due to rounding
No change from Option .

Table * Option - Unit Costs per Billable Constituents
Unit Cost Calculation Treatment
Flow BOD TSS Collection
Flow
Allocated Rate Revenue (Millions) ).*8 ).,, ). )8.&-
Unit Basis for Rate Design
Estimated
Sewer Flows
(HCF)
Estimated
BOD
Discharges
(lbs)
Estimated
TSS
Discharges
(lbs)
Estimated
Sewer Flows
(HCF)
FYE & Billed Units .,8,,,-- -,,,,8 ,*+,-. .,8,,,--
FYE Unit Costs .1 ..1 .01 ..
per HCF per lb per lb per HCF
* Line or column totals may not tie due to rounding

Jan. 11, 2022 Item #10 Page 225 of 247

Table & Option - Group I Unit Cost per HCF Calculation Group I Unit Cost per HCF
Example
Concentration
(mg/l)
Mass Load
lb/HCF Unit Cost /lb Unit Cost /HCF
Discharged
Item A B C D
BOD && .- )&.*. ).8
TSS && .- )&.,. ).&.

Treatment Flow N/A N/A N/A )..

Collections Flow N/A N/A N/A ).*&
Total Unit Cost per HCF N/A N/A N/A 2.1
Mass Load, lb per HCF (B) = [Concentration, mg/l (A)] x [..8,- gallons per L] x [8, gallons per HCF] / [-.,-* mg per lb]
Unit Cost, )/HCF (D) = [Mass Load, lb/HCF (B)] x [Unit Cost, )/lb (C)] * Line or column totals may not tie due to rounding

Table Option - All Classes Unit Cost per HCF Calculation Customer Class Unit Costs
per HCF Discharged
BOD
(mg/l)
BOD
(/HCF)
TSS
(mg/l)
TSS
(/HCF)
Flow
(/HCF)
Total Per
HCF
Discharged
GROUP I - SFR & Minimum
Charges && ).8 && ).&. )... )-..

GROUP I - MFR/Mobile Homes && ).8 && ).&. )... )-..

GROUP II - Commercial .& )&.8+ )&.+ )... ).+
GROUP III - Commercial . ., ).* 8* ). )... )+.-*
GROUP IV - Commercial ,& ).8, +,& )..- )... ).-
Other (No Accounts) .& )&.8+ && )&.- )... ).-
Brewery - B +- )8.., ,& )., )... ).8*
Brewery - B +& )*..* &*& )-.+ )... ),.

GROUP VI - Large Volume (no
accounts) ,& )&.8 ,& )&. )... ).

Industrial Pretreatment Class III ** ).8 88 ).+ )... )8.

GROUP V - Elementary Schools .& )&.8+ && )&.- )... ).-
GROUP V - Junior High Schools .& )&.8+ && )&.- )... ).- GROUP V - High Schools .& )&.8+ && )&.- )... ).-
GROUP V - Boarding Schools .& )&.8+ && )&.- )... ).-
* Line or column totals may not tie due to rounding

Jan. 11, 2022 Item #10 Page 226 of 247

Table Option - Group I Monthly Rate Calculation

Unit Cost
/HCF
Discharged
EDU Flow
Factor
Estimated
Monthly
Discharge
(HCF)
Proposed
Monthly
Rate (per
Account)
Rounded
GROUP I – Single-Family & Minimum Charges )-.. .&& ,.8 ).* Single Family with ADU )-.. .-& .& )+8..+

Table . Option - Rates per HCF of Water Consumption Calculation Usage Based Rates Unit Cost /HCF
Discharged
Return to
Sewer Factor
Calculated Monthly Rate (per
HCF of Water Used)
Rounded
GROUP I – Multi-
Family/Mobile Homes )-.. *-% )-.+
GROUP II - Commercial ).+ *-% )..*
GROUP III - Commercial . )+.-* *-% )+.+
GROUP IV - Commercial ).- *-% )&.*-
Other (No Accounts) ).- *-% ).*
Brewery - B ).8* ,.% ).&
Brewery - B ),. ,.% )-.&-
GROUP VI - Large Volume
(no accounts) ). *-% )..*
Industrial Pretreatment
Class III )8. *-% )8.&8

Table Option - Schools Rates Calculation
Group V - Schools Rates
Unit Cost
/HCF
Discharged
Assumed
Flow per
Student
(gpd)
Assumed
Flow per
Student
(HCF per
Month)
Proposed
Monthly Rate
(per Student)
Rounded
GROUP V - Elementary Schools ).- ., &. )&.,,
GROUP V - Junior High Schools ).- 8. &.. )..

GROUP V - High Schools ).- *.+ &. ).8+
GROUP V - Boarding Schools ).- -&.& .& )*.8

Jan. 11, 2022 Item #10 Page 227 of 247

Table + Option - Proposed Wastewater Rates by Customer Class Customer Class Current
Rate
FYE FYE 1 FYE FYE 2 FYE /

2.%
w/COS() .% () .% () .% () .% ()
Group I - Residential - Monthly Flat Rate
Single Family Resident (SFR) )*.- ).* )+.8 ),.-8 )-&.- )-.- SFR w/ Second Dwelling Unit )., )+8..+ )8&.&+ )8.,+ )8-.88 )8,.,& Group I - Residential - Rates per HCF
Multi Family Resident (MFR)
(per HCF) ).., )-.+ )-..8 )-.-* )-., )+.&
Mobile Home (per HCF) ).., )-.+ )-..8 )-.-* )-., )+.& Commercial -Rates per HCF
GROUP II - Commercial ).,, )..* ).-8 ).8- ).* )-..

GROUP III - Commercial . ).., )+.+ )+.- )+.88 )8.& )8..

GROUP IV - Commercial ),.& )&.*- )..* )., ).. )., Industrial Pretreatment Class III )., )8.&8 )8..- )8.+ )8.*- ),.8 Group V - School - Monthly Rates per Student
Elementary School (per student) )&.-* )&.,, )&.* )&.*+ )&.** ).&.

Junior High School (per student) )&.,8 ).. ).., ).. ).* ).-- High School (per student) ).8 ).8+ )., ).* ).*, ).&+ Boarding School (per student) )+.&* )*.8 )*.- )*.* )&.. )&.8.

Breweries -Rates per HCF
B – Brewery without a
restaurant and hauls waste for
outside treatment
).,, )..* ).-8 ).8- ).* )-..

B – Brewery without a
restaurant that does not haul
waste for outside treatment
)*.. ).& ).+* )..& )..8. ).,
B. – Brewery with a restaurant
and hauls waste for outside
treatment
),.& )&.*- )..* )., ).. ).,
B – Brewery with a restaurant
that does not haul waste for
outside treatment
).+& )-.&- )-.++ )+., )+.*. )8.+
Other - Rate per HCF ).*8 ).* ).8 ).+- ).,. )-.&
Note:
() Proposed rates for FYE & include a cost-of-service adjustment and increases for specific rates vary from the -&.&-percent overall rate revenue increase.
() Proposed rates for FYE and subsequent years are calculated by applying the proposed overall rate revenue increase to the FYE rate proportionally.

No change from Option .

Jan. 11, 2022 Item #10 Page 228 of 247

WASTEWATER COST-OF-SERVICE STUDY | FYE 2021 WASTEWATER RATE STUDY | CARLSBAD FINAL | OCTOBER 2021
Appendix I

PROJECTED FLOW AND LOADS

Jan. 11, 2022 Item #10 Page 229 of 247

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026
Customer Growth 0.49%0.30%0.57%0.17%0.68%
Estimated Sewer Flows (HCF)
GROUP I - SFR & Minimum Charges 2,254,505 2,261,175 2,273,999 2,277,789 2,293,373 GROUP I - MFR/Mobile Homes 517,586 519,117 522,062 522,931 526,509 GROUP II - Commercial 2 341,658 342,669 344,613 345,187 347,549 GROUP III - Commercial 3 359,280 360,343 362,387 362,990 365,474 GROUP IV - Commercial 4 105,086 105,397 105,995 106,172 106,898 Other 58,907 59,082 59,417 59,516 59,923 Brewery - B2 2,895 2,904 2,920 2,925 2,945 Brewery - B4 3,308 3,318 3,337 3,342 3,365 GROUP VI - Large Volume (no accounts)- - - - - Industrial Pretreatment Class III 44,386 44,518 44,770 44,845 45,152 GROUP V - Elementary Schools 8,794 8,820 8,870 8,885 8,946 GROUP V - Junior High Schools 5,218 5,233 5,263 5,272 5,308 GROUP V - High Schools 9,657 9,685 9,740 9,756 9,823 GROUP V - Boarding Schools 5,373 5,389 5,420 5,429 5,466 Total Estimated Sewer Flows (HCF)3,716,655 3,727,650 3,748,792 3,755,039 3,780,731 Estimated BOD Discharges (lbs)
GROUP I - SFR & Minimum Charges 2,814,688 2,823,015 2,839,026 2,843,757 2,863,214 GROUP I - MFR/Mobile Homes 646,192 648,104 651,779 652,866 657,332 GROUP II - Commercial 2 277,969 278,791 280,373 280,840 282,761 GROUP III - Commercial 3 736,371 738,550 742,739 743,976 749,067 GROUP IV - Commercial 4 537,909 539,501 542,560 543,465 547,183 Other 47,804 47,945 48,217 48,297 48,628 Brewery - B2 22,867 22,935 23,065 23,103 23,261 Brewery - B4 33,246 33,344 33,533 33,589 33,819 GROUP VI - Large Volume (no accounts)- - - - - Industrial Pretreatment Class III 82,723 82,967 83,438 83,577 84,149 GROUP V - Elementary Schools 7,137 7,158 7,198 7,210 7,260 GROUP V - Junior High Schools 4,234 4,247 4,271 4,278 4,307 GROUP V - High Schools 7,836 7,860 7,904 7,917 7,971 GROUP V - Boarding Schools 4,360 4,373 4,398 4,405 4,436 Total BOD Discharge (lbs)5,223,336 5,238,789 5,268,501 5,277,281 5,313,388 Estimated TSS Discharges (lbs)
GROUP I - SFR & Minimum Charges 2,814,688 2,823,015 2,839,026 2,843,757 2,863,214 GROUP I - MFR/Mobile Homes 646,192 648,104 651,779 652,866 657,332 GROUP II - Commercial 2 257,115 257,876 259,339 259,771 261,548 GROUP III - Commercial 3 625,480 627,330 630,888 631,939 636,263 GROUP IV - Commercial 4 446,071 447,391 449,928 450,678 453,761 Other 36,772 36,881 37,090 37,152 37,406 Brewery - B2 14,645 14,689 14,772 14,797 14,898 Brewery - B4 22,508 22,575 22,703 22,740 22,896 GROUP VI - Large Volume (no accounts)- - - - - Industrial Pretreatment Class III 132,230 132,622 133,374 133,596 134,510 GROUP V - Elementary Schools 5,490 5,506 5,537 5,546 5,584 GROUP V - Junior High Schools 3,257 3,267 3,285 3,291 3,313 GROUP V - High Schools 6,028 6,046 6,080 6,090 6,132 GROUP V - Boarding Schools 3,354 3,364 3,383 3,389 3,412 Total TSS Discharge (lbs)5,013,831 5,028,664 5,057,184 5,065,611 5,100,270 Jan. 11, 2022 Item #10 Page 230 of 247

FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026
Customer Accounts
GROUP I - SFR & Minimum Charges 22,724 22,792 22,921 22,959 23,116 GROUP I - MFR/Mobile Homes 977 980 985 987 994 GROUP II - Commercial 2 1,237 1,240 1,247 1,250 1,258 GROUP III - Commercial 3 355 356 358 358 361 GROUP IV - Commercial 4 238 239 240 241 242 Other 266 267 268 269 271 Brewery - B2 8 8 8 8 8 Brewery - B4 4 4 4 4 4 GROUP VI - Large Volume (no accounts)- - - - - Industrial Pretreatment Class III 262 263 264 265 267 GROUP V - Elementary Schools 17 17 17 17 17 GROUP V - Junior High Schools 22 22 22 22 22 GROUP V - High Schools 72 72 72 73 73 GROUP V - Boarding Schools 3 3 3 3 3 Total Accounts 26,185 26,262 26,411 26,455 26,636 Number of Students
GROUP V - Elementary Schools 6,852 6,872 6,911 6,923 6,970 GROUP V - Junior High Schools 2,710 2,718 2,734 2,738 2,757 GROUP V - High Schools 3,762 3,773 3,795 3,801 3,827 GROUP V - Boarding Schools 287 288 290 290 292 Jan. 11, 2022 Item #10 Page 231 of 247

Exhibit 8
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NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council of the City of Carlsbad will hold a virtual public hearing at 5 p.m. on Tuesday, Jan. 11, 2022 to consider approving three-year rate increases for potable water, recycled water, and wastewater services. Those wishing to protest the proposed rate increases must submit their concerns in writing to the office of the City Clerk any time before the close of the public hearing. You may hand deliver your written protest or mail it to City of Carlsbad, Office of the City Clerk, 1200 Carlsbad Village Drive, Carlsbad, CA 92008.

In order to be counted, protests must be signed by the property owner or ratepayer and include the protester's printed full name and the specific rate being protested. Only one protest notice is allowed per parcel. Emailed protests do not satisfy the signed written protest requirement. If a majority of ratepayers protest the increase, it will not be passed. You are welcome to speak at the public hearing, but official protests must be made in writing. Consistent with SB 323, which was signed into law in late 2021, any judicial action challenging these fees for water or sewer service shall be commenced within 120 days of the date of the resolution approving the increased rates.

In the interest of public health and safety, we are temporarily taking actions to prevent and mitigate the effects of the COVID-19 pandemic by holding City Council and other public meetings online only. All public meetings will comply with public noticing requirements in the Brown Act and will be made accessible electronically to all members of the public seeking to observe and address the City Council. All comments received by 2 p.m. the day of the meeting will be shared with the City Council prior to the meeting and all protests that satisfy the requirements above received by the clerk's office before the close of the public hearing will be counted. However, any comments received against the proposed rate increase will not be counted as protests unless they each satisfy the protest requirements described above. Written comments will not be read out loud. If you wish to participate virtually, you may visit:
https://www.carlsbadca .gov/city-ha II/meetings-agendas for meeting instructions.

Copies of the staff report will be available on and after Jan. 7, 2021. Those persons wishing to speak on these proposed rate adjustments are cordially invited to attend the public hearing. If you have any questions about how to protest the proposed rates, please visit carlsbadca.gov/rates. If you have any questions about the rate adjustments in general please contact Vicki Quiram, Utilities Director/General Manager of the Carlsbad Municipal Water District at (760)-438-2722 or [email protected].

CITY OF CARLSBAD CITY COUNCIL & CARLSBAD MUNICIPAL WATER DISTRICT BOARD

RECEIVED
JAN 1 0 2022

CITY OF CARLSBAD
Cl fY CLERl<'S OFFICE
All Receive -Agenda Item # / 0
For the Information of the:

P'.!' COUNCIL
Date l1lP.R;b CA .,--CC ...::::,
CM __L'ACM ~DCM (3) ..::::_
December 30, 2021
To: The Citizen Elected Members of the Carlsbad City
Council:

We are submitting as directed by the written paper
notice of the Carlsbad Municipal Water Districts, a
protest letter to OBJECT STRONGLY to all three
proposed water rate hikes upcoming in March 22, January 23, and January 24. Reason: We are the only city in
California to have a working water desalinization plant (thank you Bud Lewis) that was approved by the Coastal
Commission to more than adequately supply water for
future needs in our area. The small country of Israel with only 170 miles of coastline has 31 desalinization plants.

We are UNFORTUNATE enough to endure and pay
for the State Governor's mistakes, who was advised by an EXPERT in water conservation for future demands, to
build more collecting reservoirs for water use. HE DID
NOTHING and all along the coast, cities can build water desalinization plants (like Santa Barbra), to supply theirs and their inland neighbor's needs.

DO NOT raise our rates. Carlsbad can be an example
of self-sufficiency to other municipalities along the coast.

All this state does is RAISE rates to pay for other non- related issues while those who work hard give hand-outs to decision makers such as yourselves ( citizen elected council members). You tell us you need it for pipe repair.

Carlsbad City Council
1200 Carlsbad Village Drive
Carlsbad, CA 92008
January 10, 2022
Dear Council Members,

RECEIVED
JAN 1 0 2022

CITY OF CARLSBAD

CITY CLERK'S OFFICE
All Receive -Agenda Item# iQ.

For the Information of the: bl/ COUNCIL ✓
Date J.J.CA ........-cc 7 CM /ACM _vDCM (3} _
We are submitting a written protest to the proposed wastewater increases for single-family residents. The exponential increases over three years will hit families the hardest because there is no way to pass these expenses on to others like businesses or multi-family residential setting can. The flyer has a graphic of three green bills that states that even after the rates are approved, "Carlsbad will still have among the lowest wastewater rates in the region". Where is the data to support this? What is the "region" this statement is referring to? Where is a table of the current and proposed rates in the "region" mentioned?
This increase comes out of NOWHERE, with no warning, and very little time to digest, research and protest. It is interesting that this HAS to be done now, right after the holidays. I feel like the city is hoping people will overlook this because they are busy with family and friends.

We would like to see the protest deadline pushed back into February. We would like to have more information about this. We would like to see the research that went into deciding the increases. An increase is fine -an increase that will have each household paying $300 more per year in three years is ludicrous. We are discouraged that our city operates this way.

Pamela and Michael Gentile
(J~Jbd_Ut __
l}l~
4431 Coastline Ave
Carlsbad, CA 92008
760-505-5179
Account Number 3720000-04

January 6, 2022
City of Carlsbad
Municipal Water District
To Whom It May Concern:

RECEIVED
JAM 1 0 2022

CITY OF CARLSBAD

CITY CLERK'S OFFICE
I protest all rate increases listed for the January 11, 2022 public hearing. Senior citizens on a fixed income cannot afford rate increases. My property information is listed below:
3544 Celinda Dr.

Carlsbad, CA 92008
Parcel number: 167-540-04-00
City of Carlsbad Utility Bill account num ber: 3107400-03 ~'1Sl.1~ (Vir~fNfrlllj
Susan Montgo~:;p -.

Property owner

To: City of Carlsbad, Council Chamber
To Whom It May Concern:

RECEIVED
JAN O 7 2022

CITY OF CARLSBAD

CITY CLERK'S OFFICE
I do not agree with the proposed rate increases for the water usage and for wastewater.

Bogdan Ionescu
Account number: 10100120-04
3732 Arapaho PL
Carlsbad, CA 92010
-/
/~ /~A:~
/ /
// //

Public Hearing – Proposed
multi-year rates for potable
water, recycled water and
wastewater services
Vicki Quiram, Utilities Director/CMWD General Manager
Shoshana Aguilar, Senior Management Analyst
Jan. 11, 2022

PROPOSED ACTIONS
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

1.Hold a Public Hearing and Adopt a City Council
Resolution approving three-year rates for
wastewater services

2.Hold a Public Hearing and Adopt a Carlsbad
Municipal Water District (CMWD) Resolution
approving three-year rates for potable water and
recycled water services

TODAY’S PRESENTATION
Water
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES
Recycled waterWastewater

SCHEDULE
Status of wastewater
and water funds
Public hearing
Cost-of-service study presented
with proposed rate increases and
options, and set public hearing
Sept. 2021 Nov. 2021
Notifications mailed to
customers (Prop 218)
If approved,
new rates go
into effect
Jan. 2022
Customer/ business outreach
5-7 weeks
following
approval
Feb. 2021
Update on
funds
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

PUBLIC HEARING REQUIREMENT
CALIFORNIA PROPOSITION 218
Any increase in these rates requires:
City Council’s and the CMWD Board’s establishment of
the date and time of the majority-protest public hearing Notification of customers at least 45 days before such a hearing
A public hearing
Compliance with California’s Proposition 218
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

PROTEST PROCESS
Customers have the right to protest the proposed rates
•By submitting their concerns in writing to the City
Clerk's office any time before close of the public
hearing
•If less than 50% of customers protest the proposed
rates, the City Council and the CMWD Board may
consider adopting the proposed changes at the
public hearing
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

Why Increases?

$2.1 billion in infrastructure
•815 miles of underground pipelines
•Over 14,000 water valves
•Over 4,000 fire hydrants
•12 reservoirs
•11 wastewater lift stations and wet wells

•Aging infrastructure
•Carlsbad’s rates among the lowest in the county
•Encina Wastewater Authority capital improvement
projects and treatment costs are increasing (pass-
through)
•Increasing cost of water from San Diego Water Authority (pass through)
•Using a more accurate assessment of high-risk needs
using data, technology and modeling and detailed asset management plans

WHY RATES NEED TO INCREASE
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

Age of our city 70 years
Infrastructure lifespan 30 -50 years

THE COST OF AGING INFRASTRUCTURE
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

INFLATION
2” copper tubing 83%
8” PVC pipe
144%
31%
Steel reinforcing bars
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

SOME OF THE LOWEST WATER RATES

13 THE LOWEST WASTEWATER RATES
*MONTHLY SINGLE FAMILY RESIDENTIAL

Water

WATER REVENUE VS EXPENDITURES
15 0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
CMWD Ops (not Water Purchase)CMWD CIP Total Water Purchases Revenue Cost to
buy water
Needed
projects
Operations
Revenue

COST OF PURCHASED WATER
Cost per acre foot
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

POTENTIAL WATER RATES-Residential
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

SAMPLE WATER BILL INCREASES-Commercial
Starting bill
Gym
$583
Restaurant
$708
Resort
$33,300
2022 $12 $14 $667
2023 $12 $14 $680
2024 $12 $14 $680
Total proposed monthly
increase
$36 $42 $2,027
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

Wastewater

WASTEWATER FUND REVENUE VS EXPENDITURES
20 $0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Expenses Revenue

POTENTIAL WASTEWATER RATES-Residential
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

SAMPLE WASTEWATER INCREASES-Commercial
Starting Bill
Gym
$283
Restaurant
$1,083
Resort
$5,000
2022 $57 $217 $1,000
2023 $68 $260 $1,200
2024 $70 $269 $1,240
Total proposed monthly
increase
$195 $745 $3,440
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

Recycled Water

•Recycled water is more affordable than potable irrigation rates
•Local drought-proof supply
•Electricity costs are rising
•Keep up with expenses and inflation

RECYCLED WATER INCREASES
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

POTENTIAL RECYCLED WATER RATES
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

Outreach

OUTREACH
Mailer to 27,000 customers
Webinar for commercial customers
Social media posts
Informational webpage
Direct outreach to largest customers
Public notice in the newspaper
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

PROPOSED ACTIONS
ITEM 10: WATER, RECYCLED WATER, & WASTEWATER RATES

1.Hold a Public Hearing and Adopt a City Council
Resolution approving three-year rates for
wastewater services

2.Hold a Public Hearing and Adopt a Carlsbad
Municipal Water District (CMWD) Resolution
approving three-year rates for potable water and
recycled water services

Thank you

760-438-2722
[email protected]
www.carlsbadca.gov/rates

WASTEWATER COSTITEM 8: WATER, RECYCLED WATER, & WASTEWATER RATES

WATER COSTS
9%
Depreciation
costs
22%Costs to
operate the
system
69%
Cost to
purchase water
ITEM 8: WATER, RECYCLED WATER, & WASTEWATER RATES

Encina Treatment Facility
30 -50 years
THE COST OF AGING INFRASTRUCTURE: ENCINA
60 years
Infrastructure lifespan
ITEM 8: WATER, RECYCLED WATER, & WASTEWATER RATES

ABOUT RATES
Cost to provide service
Pass-through cost
Water Quality
Environmental Protection
Repairs/Replacements
Maintenance/Operations
Price paid by customer
Businesses
Apartments/HOAs
Industry
Homes
Cost of Service
Studies
ITEM 8: WATER, RECYCLED WATER, & WASTEWATER RATES

ESTIMATED 2022 WATER BILL

SOME CONTROL VERY LITTLE CONTROL

ADDITIONAL COST DRIVERS
•Aging infrastructure throughout the city’s and the Encina Wastewater Authority •Delayed project implementation by Encina, resulting in higher construction costs •Decreasing wastewater volumes associated with water conservation are causing higher treatment costs due to more concentrated wastewater that is harder to treat
•The wastewater authority’s decision to pay off 100% of the CalPERS retirement liability in three years, while other agencies choose to remain closer to 80% funded (City of Carlsbad) or payoff the liability over a longer time span •The wastewater authority’s $95 million of capital requirements for infrastructure budgeted over the next 10 years
•Materials such as steel, copper, chlorine and odor control chemicals have not only risen in cost but are now difficult to obtain

RESERVES
•Past rate increases included the use of reserves, but much of those reserves have now been allocated to the updated Sewer Master Plan. •In the FY 2021-22 budget for wastewater, there is an estimated $24 million in capital reserves, however $35 million is needed to execute the Sewer Master Plan, creating a $9 million deficit.
•City and CMWD staff are developing a reserve policy for potable water, recycled water and wastewater, which will be in line with industry standards.
•Potable water capital funding is sufficient for planned projects.

Cost of Service Process –Water

Cost of Service Process –WasteWater

49 WASTEWATER BILL COMPARISON
*MONTHLY SINGLE FAMILY RESIDENTIAL
Carlsbad
$29.52
Average
$54.52
Highest
$114.62

ABOUT WATER RATES
Water delivery fee
Fixed monthly charge based
on meter size
Equal to all customers in a
particular class (e.g.,
commercial, single-family
residential)
Water usage fee
Charged based on
the amount of
water in units
consumed each
month

RECYCLED WATER BILL COMPARISON - 2022
*A sample recycled water bill is for a 1.5” meter using 350 units of water per month.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Oceanside Carlsbad Poway Encinitas

ABOUT WASTEWATER RATES
Not individually metered
Equal to all customers in a particular class
(e.g., commercial, breweries, single family
residential)
Each class charged based on:

Water use
Wastewater quality (BOD, TSS)
Treatment costs

WASTEWATER TREATMENT -ENCINA
•More regional capital improvement projects are
needed to maintain aging infrastructure
•Cost of projects is increasing significantly
•City has little control over regional capital
improvement projects
•Impacts on customer rates are not presented when
the Encina Board approves projects

COST OF SERVICE STUDY
•Revenues from rates must adequately fund utility operations, maintenance and capital investments •Rates must adhere to the cost-of-service requirements of Prop 218 •Prop 218 requires rates cannot and do not exceed reasonable and proportional cost of providing the service •The city and the CMWD make NO profit on utility rates
•Rates must be both equitable and reasonable

AVERAGE SINGLE FAMILY HOME WATER BILL
2022 -$0.35
2023 $1.46
2024 $1.45
Total proposed
increase
$2.56

SAMPLE RECYCLED WATER BILL INCREASES
Starting Bill
2022
$1,421
$57
2023 $56
2024 $64
Total proposed 3-year
monthly increase
$177
*A sample recycled water bill is for a 1.5” meter using 350 units of water per month.

Carlsbad City CouncilJanuary 11, 2022

Carlsbad City Council
January 11, 2022