Carlsbad City Council
February 11, 2025

RESOLUTION NO. 2025-047

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AND FILING THE 2025 WASTEWATER COST OF SERVICE STUDY, SETTING A PUBLIC HEARING FOR APRIL 22, 2025, AT 5 P.M.,

TO APPROVE INCREASES TO RATES FOR WASTEWATER SERVICES EFFECTIVE JULY 1, 2025, AND DIRECTING THE CITY MANAGER OR DESIGNEE TO ISSUE

WRITTEN NOTICE OF THE PUBLIC HEARING
WHEREAS, the City of Carlsbad provides wastewater collection services to approximately two thirds of the City's population and is responsible for the collection and conveyance of sewer discharges to the Encina Water Pollution Control Facility; and
WHREAS, the City and the Carlsbad Municipal Water District, or CMWD, solicited responses to its 2019 Utilities Cost of Service Study Request for Proposals and received four responses, and after an evaluation determined that Carollo Engineers, Inc., was the most qualified consultant; and WHEREAS, the City Council and CMWD Board authorized a professional services agreement with Carollo Engineers, Inc., to develop a comprehensive cost-of-service study, including the City's wastewater cost of services; and
WHEREAS, the City of Carlsbad's Final Wastewater Cost-of-Service Study dated January 2025 provides a revenue requirement analysis, cost of service analysis, and a rate design process, including recommended adjustments for wastewater rates; and
WHEREAS, the City is proposing wastewater service rate increases effective July 1, 2025, Jan. 1, 2026, and Jan. 1, 2027, consistent with the Final Wastewater Cost-of-Service Study dated January 2025; and
WHEREAS, the California Constitution , Article XIII D, section 6, or Proposition 218, requires the City to hold a majority-protest public hearing on any proposed new or increased rates and fees and mail a written notice at least 45 days prior to the public hearing to the record owners of each identified parcel upon which the fees or charge for imposition is proposed .

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:

1. That the above recitations are true and correct.

2. The Final Wastewater Cost-of-Service Study dated January 2025 (Attachment A) is approved by the City Council.

3. That the City Council of the City of Carlsbad hereby sets a majority-protest public hearing for Tuesday, April 22, 2025, at 5 p.m.

4. That the City Manager of designee is directed to issue written notice of the public hearing.

5. That approving a cost study, setting of a majority-protest public hearing, and sending written notice of the public hearing do not constitute a project within the meaning of the California Environmental Quality Act under Public Resources Code Section 21065 because it has no potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.

PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Board of Directors of the Carlsbad Municipal Water District of the City of Carlsbad, California, and the City Council of the City of Carlsbad, California, on the 11th day of February 2025, by the following vote, to wit:

AYES:

NAYS:

ABSTAIN:

ABSENT:

Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.

None.

None.

None.

KEITH BLACKBURN, MAYOR

CITY OF CARLSBAD
Wastewater Cost-of-Service Study
2025 Wastewater Cost-of-Service Study
FINAL / January 2025
Attachment A
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Contents
SECTION 1 INTRODUCTION 1

1.1 Study Purpose and Key Drivers 1

1.2 Overview of the Rate Setting Process 2

1.2.1 Revenue Requirement Analysis 2

1.2.2 Cost of Service Analysis 4

1.3 Project Findings and Recommendations 4
SECTION 2 INPUTS AND ASSUMPTIONS 7

2.1 Growth and Wastewater Usage 7

2.2 User Rate Categories 8
SECTION 3 REVENUE REQUIREMENT ANALYSIS 9

3.1 Fiscal Policies 9

3.2 Operating Revenues 10

3.3 Operations and Maintenance Expenditures 11

3.4 Capital Improvement Program Funding 11

3.5 Recommended Revenue Requirements 13
SECTION 4 COST-OF-SERVICE ANALYSIS 15

4.1 Revenue Needs 15

4.2 Functional Allocation 16

4.2.1 Functional Allocation Factors 17

4.2.2 Functional Allocation Results 18
SECTION 5 RATE DESIGN ANALYSIS 20

5.1 Customer Characteristics 20

5.1.1 Class Flow and Loading Assumptions 22

5.2 Unit Cost Calculation 27

5.3 Rate Design 27

5.3.1 Class Unit Costs per HCF Discharges 27

5.3.2 Customer Class Rate Calculations 30

5.3.3 Proposed Rates 31
SECTION 6 ALTERNATIVE OPTION 32

6.1 Bond Issuance 32

6.2 Recommended Revenue Requirements – Alternative Option 32

6.3 Proposed Rates – Alternative Option 34

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Appendices

APPENDIX A PROJECTED O&M

APPENDIX B CAPITAL IMPROVEMENT PLAN

APPENDIX C REVENUE REQUIREMENT ANALYSIS

APPENDIX D FUNCTIONAL ALLOCATION

APPENDIX E RATE CALCULATIONS

APPENDIX F PROJECTED FLOW AND LOADS

APPENDIX G PROJECTIONS FOR ALTERNATIVE OPTION
Tables
Table 1 Proposed Wastewater Rates by Customer Class 6
Table 2 Escalation Factors 7
Table 3 Current Rate Revenues (in millions) 10
Table 4 Offsetting Revenues (in millions) 10
Table 5 Operating Expenditures (in millions) 11
Table 6 Capital Improvement Plan Expenditures (in millions) 12 Table 7 Capital Improvement Plan Funding (in millions) 13 Table 8 Revenue Requirement Summary (in millions) 14
Table 9 Expenditures and Offsetting Revenues (in millions) 15 Table 10 Functional Allocation Factors 17
Table 11 CIP Functional Allocation (in millions, 2024 Dollars) 18 Table 12 O&M Functional Allocation (in millions) 18
Table 13 Revenue Requirements Functional Allocation (in millions) 19 Table 14 Wastewater Flow Mass Balance – FY 2021/22 Data 23 Table 15 Wastewater BOD Mass Balance – FY 2021/22 Data 24 Table 16 Wastewater TSS Mass Balance – FY 2021/22 Data 25 Table 17 Expected Billed Units by Customer Class for FY 2024/25 26 Table 18 Unit Cost per Billable Constituents 27
Table 19 Group I Unit Cost per HCF Calculation 28
Table 20 All Classes Unit Cost per HCF Calculation 29
Table 21 Group I Monthly Rate Calculation 30
Table 22 Rate per HCF of Water Consumption Calculation 30 Table 23 Schools Rates Calculation 30
Table 24 Proposed Wastewater Rates by Customer Class 31 Table 25 Alternative Option – Bond Summary 32
Table 26 Alternative Option with Bond Funding – Revenue Requirement Summary (in millions) 33
Table 27 Alternative Option with Bond Funding – Proposed Wastewater Rates by Customer Class 34
Table 28 Comparison of Rate Revenue Increases for Baseline Option to Alternative with Additional Bonds 35
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Figures
Figure 1 Cost of Service Rate Study Process 2
Figure 2 Single Family Bill Comparison 35
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Abbreviations
ACFR Annual Comprehensive Financial Report
ADU Accessory Dwelling Unit
BOD biological oxygen demand
Carlsbad City of Carlsbad
Carollo Carollo Engineers, Inc.

CIP capital improvement program
DSCR Debt Service Coverage Ratio
EDU Equivalent Dwelling Unit
EWA Encina Wastewater Authority
EWPCF Encina Water Pollution Control Facility
FYE Fiscal Year Ending
gpd gallons per day
HCF hundred cubic feet
MFR Multi-Family Residential
mgd or
MGD
million gallons per day
mg/L milligrams per liter
O&M Operation and maintenance
SFR Single Family Residential
SRF State Revolving Fund
Study Cost of Service Study
TSS total suspended solids
WEF Water Environment Federation
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SECTION 1 INTRODUCTION
The City of Carlsbad (Carlsbad) owns a wastewater system that provides wastewater service to roughly two thirds (2/3) of the City’s population and is responsible for the collection and conveyance of sewer discharges to the Encina Water Pollution Control Facility (EWPCF). The EWPCF is jointly owned by the cities of Carlsbad, Vista, Encinitas, the Buena Sanitation District, Vallecitos Water District, and Leucadia Wastewater District and provides full secondary treatment, sludge handling, and disposal through a deep ocean outfall that extends along the ocean floor to a point 1.5 miles offshore.

The City’s wastewater service customer base includes approximately 24,000 sewer accounts, consisting of single family residential, multi-family residential, commercial, other, breweries, industrial, and schools. The City maintains a separate wastewater enterprise fund with its own operating and capital reserves. The wastewater user rates are designed to distribute the cost of the operation and improvement of the City’s collection system and the City’s share of the EWPCF equitably among all users in accordance with California legal requirements as defined by Proposition 218.

1.1 Study Purpose and Key Drivers
Carlsbad retained Carollo Engineers, Inc. (Carollo) to perform a comprehensive Cost of Service Study (Study) of the City’s potable water, recycled water, and wastewater systems and to develop a rate plan for the upcoming 5-year period, Fiscal Year Ending (FYE) 2025 through FYE 2029. The City has historically set rates on a calendar year basis, and the rates calculated in this assume that schedule is retained. However, to align with the proposed increased for water and recycled water rates, implementation of the first increase will be delayed to July 1, 2025.

Carollo’s analysis was guided by the policies and practices of the City, industry best practices for cost-of- service analyses as outlined by the Water Environment Federation (WEF) updated Manual of Practice No. 27, Financing and Charges for Wastewater Systems, and requirements for establishing wastewater rates within the State of California. This report summarizes the findings and recommendations of the cost- of-service and rate analysis for the City’s wastewater system. The findings of the cost-of-service analysis for potable and recycled water are provided by Carollo in a separate report.

Several matters influence the need to conduct a comprehensive cost-of-service rate design study.

Identifying these matters upfront defines the strategic intent needed to complete this project successfully.

These issues include the following:
 The State of California requires that all utility rates meet the cost-of-service requirements imposed under Proposition 218. These principles underlie the approach to rate setting such that all customers are charged rates that are proportional to the cost of providing service attributable to a parcel based on the demands that each customer class places on the system.  Although there are others, the main factor driving the need for increased rate revenues for this Study is funding of the capital improvement program (CIP). Based on current projections, the City and the EWPCF have identified a total of $122.3 million (2024 dollars) in necessary capital improvements over the next 5 years. The City’s share of the EWPCF projects is expected to total approximately half of the City’s total CIP expenses over this time period.

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 In addition to anticipated CIP expenditures, the recent high inflation rates have affected operating costs of utilities dramatically in the last few years. Although the inflation rate is expected to return to a more historically “normal” rate during the Study period, FYE 2024 budget was carefully reviewed and updated to develop the appropriate 5-year financial plan.

1.2 Overview of the Rate Setting Process
Rate analyses should be performed periodically so that revenues from rates adequately fund utility operations and maintenance (O&M) and capital investments. Additionally, in California, water and wastewater rates must adhere to the cost-of-service requirements imposed by the State Constitution.

Proposition 218 requires that property related fees and charges, including wastewater rates, do not exceed the reasonable proportional cost of providing the service.

In addition to adhering to state requirements, Carollo’s rate-setting methodology is consistent with industry guidelines described in the WEF Manual of Practice 27: Financial and Charges for Wastewater Systems (MOP 27).

The cost-of-service analysis presented within this report consists of the following three interconnected processes:

Figure 1 Cost of Service Rate Study Process
While the process is described in a linear step by step approach, it is better understood as an iterative process where the ultimate objective is to balance revenues with costs in an equitable manner for customers. These three processes will form the basis for the rate analyses presented within this report.

1.2.1 Revenue Requirement Analysis
The revenue requirement analysis is a comprehensive test of a utility’s fiscal health, examining the adequacy of current revenues under existing rates and forecasted demands to its forecasted future O&M and capital funding needs. This analysis sets the basis for rate planning and reviews the viability of a utility’s revenues against expenses, debts, and reserve policies.

Revenue Requirement Analysis
Compares existing revenues of the utility to its operating, capital, and policy driven costs to establish the adequacy of the existing cost recovery levels.

Cost of Service Analysis
Identifies and apportions annual revenue requirements to functional rate components based on its application of the utility system.

Rate Design
Considers both the level and structure of the rate design to collect the distributed revenue requirements from each class of service.

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If revenue projections under existing rates do not meet forecasted requirements, rate revenue increases are recommended until the tests are passed. The study analyzed the revenue requirements to test the fiscal health of the City’s wastewater system, evaluated the adequacy of current rates and charges, and set the basis for the 5-year rate plan for the City. No bond issuance was assumed during the Study period.

1.2.1.1 Revenue Requirements Components
Revenue requirements are the summation of expenses or costs for providing wastewater services, including collecting and treating sewage, and handling treated effluent to the environment. They are determined on an annual basis, and they include:
 O&M: Salaries and benefits, chemicals, power, vehicles, equipment, supplies, etc. Some costs vary by the volume of treatment such as chemicals and power, but other costs are fixed and independent of volume such as salaries and vehicles.
 Capital Improvements and Financing: Design and construction of new and replacement infrastructure, including labor for City employees and fees for consultants and contractors that perform this work, along with debt service payments, bond issuance costs, commercial paper fees, etc. including debt coverage. Capital requirements include the City’s internal collection assets as well as the City’s share of costs for Encina.
 Encina Operating Costs: Wastewater treatment and effluent disposal costs incurred by Encina Wastewater Authority (EWA).
 Financial Policies: Maintenance of financial policies, such as minimum reserve balances, which are supported by user rates.

1.2.1.2 Revenue Requirement Tests
There are three sufficiency tests that can be used to define the annual revenue requirement: (1) operating income, (2) debt coverage, and (3) reserves. These sufficiency tests are commonly used to determine the amount of annual revenue that must be generated from an agency’s rates.  The cash flow sufficiency test examines whether a utility is generating enough revenues to meet O&M expenses, debt service payments, policy driven additions to working capital (and reserves), miscellaneous capital outlays, replacement funding, and rate- funded- capital expenditures. It requires a net positive cash flow at the end of each fiscal year. When there is a cash flow deficit, an increase in rate revenues is recommended. However, when ending reserve balance is sufficient, the rate increase can be reduced or omitted to mitigate rate payer impacts.  The debt service coverage test assesses a utility’s ability to meet their annual debt service obligations. Bond issuances regularly include a stipulation that the agency must maintain sufficient cash flows to meet annual debt service payments plus an additional amount by its covenant. Typical debt service coverage ratio (DSCR) target ranges from 1.10 to 1.40 times annual debt service payment, depending on an agency’s specific financial situation and the type of debt instrument issued. This means that for a utility’s every $100 in debt obligation, it needs to generate $110 to $140 in net operating income. When the calculated DSCR falls below the target, an increase in rate revenues is recommended. Based on the City’s State Revolving Fund loan agreement with the California State Water Resources Control Board, the DSCR target for the wastewater State Revolving Fund (SRF) loan is 1.20.

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 Reserves Test measures if a utility is maintaining its reserve target to ensure continuation of their operations and any financial obligations during unexpected revenue shortfalls. This test is not legally binding under Proposition 218 but provides an assurance for a utility’s financial stability. The reserve target is based on the polices adopted by the City Council. When the end of the year balance falls before the target, an increase in rate revenues is recommended. However, reserve targets could be reduced in some cases in order to mitigate rate payer impacts.

1.2.2 Cost-of-Service Analysis
This step builds a link between the City’s cost of wastewater service and the proposed rates for each customer. After determining the revenue requirement, this step outlines the cost to collect and treat each unit of sewage to serve each customer.

This process reviews each item in the system’s budget and allocates the items based on what function is served. For example, some cost items support the collection or treatment of wastewater while other costs are incurred to provide customer service or to fund infrastructure maintenance. Organizing the budget in terms of end function allows the creation of a nexus between the budget item and the rate. This process bridges the costs incurred by the City and the unique and varied benefits delivered to each customer.

With respect to wastewater, there are two methods outlined in Manual of Practice No. 27 for distributing these costs: Wastewater Flow and Wastewater Loading Strengths. Both are considered fair and equitable because both approaches distribute revenue requirements to each class in proportion to their respective contribution to the system cost components. This study’s cost of service analysis uses the Base-Extra Capacity method which uses a three-part allocation process:

1. Functionalization: Annual costs are allocated by utility functions, such as collections, treatment, and customer service.

2. Rate Components: Wastewater facilities are designed and operated to collect wastewater and treat it to remove pollutants prior to reuse or disposal. The costs can be tracked in rate components such as collection flow, treatment flow, biochemical oxygen demand (BOD), total suspended solids (TSS), and customer service. These services are the basis for allocating the functionalized costs to cost components.

3. Customer Class: Cost components are distributed to customer classes in proportion to their burden on the system based on their estimated wastewater flows and loading.

1.3 Project Findings and Recommendations
Based on the analysis projections, the City will need to increase wastewater rate revenues to implement identified capital improvement projects and, to a lesser extent, to keep pace with inflationary increases to O&M costs. While the use of reserves to fund a share of capital projects will help to mitigate the necessary level of rate increases, significant rate increases will still be required due to the magnitude of the capital improvements that are necessary. The main analysis discussed in this report assumes that the City will not be issuing bonds to support the CIP projects during the Study period, in line with the City’s typical capital funding practices. An alternative analysis, assuming the use of bonds, is included in the last section of the report. It is recommended that the City review its revenues and expenditures on an annual basis to verify that the implemented rates are adequately recovering costs.

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The key findings and recommendations are as follows:
 Proposed Rate Increases: Given the considerable capital improvement projects for the study period (FYE 2025 – FYE 2029), increases of 14 percent per year through FYE 2027 are proposed with projected increases at 7-percent per year for FYE 2028 and FYE 2029.  Retain the Current Rate Structure: The proposed user rates largely retain the City’s current rate structure and will include a cost-of-service adjustment on July 1, 2025 based on the updated cost-of- service allocations followed by across the board increases on January 1, 2026 and January 1, 2027.  Rate Implementation Timing: Subsequent to the development of the rates proposed in this report, the City opted to delay rate increased until July 1, 2025. This will allow time to update the customer billing system to include the pass-through charges that have been developed for water rates. Rather than recalculating rates, the implementation of the rates developed based on a January 1, 2025 increase will be delayed by six months. The City will resume its typical calendar year rate increases starting January 1, 2026. The delay in 2025 will result in decreased revenues of approximately $1.8 million which will be covered with reserves. Future increases, beyond FYE 2027 may need to be higher than those presented to replenish the reserves.
 Projected Reserves: The City’s utilities reserve policy sets a minimum reserve target based on components for 90-days of O&M costs, 1 year of annual debt service payments, 25-percent of the five year annual average CIP, a rate stabilization reserve set at minimum of 5-percent of annual rate revenues, and 1-percent of the system’s replacement value in an emergency reserve ($4.4 million for FYE 2025). The policy also includes general guidance to maintain total reserves equivalent to between 180 and 365 days of O&M expenditures. Due to the large anticipated CIP expenditures, the City will draw on its existing reserves to fund projects, resulting in rate increases lower than those that would be otherwise necessary. This use of reserves will result in total reserves being drawn below the minimum amount defined by the components, however they will remain within the 180 to 365 days of O&M range for all years except FYE 2028. Longer-term projections indicate that reserves would rebound above the minimum level by FYE 2030.

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Table 1 outlines the calculated wastewater charges for FYE 2025 through FYE 2029 for Option 1.

Table 1 Proposed Wastewater Rates by Customer Class
Customer Class Current Rate
FYE 2025
Proposed
Delayed to Jul. 1
2025
FYE 2026
Proposed
Jan. 1 2026
FYE 2027
Proposed
Jan. 1 2027
Increase(1) 14.00% CoS
Adj. 14.00% 14.00%
Group I - Residential - Monthly Flat Rate
SFR $51.74 $59.85 $68.22 $77.77
SFR w/ Second Dwelling Unit 77.60 89.77 102.33 116.66
Group I - Residential - Rates per HCF
MFR $5.95 $6.89 $7.85 $8.95
Mobile Home 5.95 6.89 7.85 8.95
Commercial - Rates per HCF
GROUP II - Commercial 2 $5.06 $6.06 $6.91 $7.88
GROUP III - Commercial 3 7.21 8.01 9.13 10.41
GROUP IV - Commercial 4 12.61 12.90 14.71 16.76
Industrial Pretreatment Class III 8.14 9.03 10.29 11.73 Group V - School - Monthly Rates per Student
Elementary School (per student) $1.02 $1.18 $1.34 $1.53 Junior High School (per student) 1.53 1.77 2.01 2.30
High School (per student) 2.03 2.36 2.68 3.06
Boarding School (per student) 10.56 11.98 13.65 15.56
Breweries - Rates per HCF
B1 - Brewery without a restaurant and hauls waste
for outside treatment $5.06 $6.06 $6.91 $7.88
B2 - Brewery without a restaurant that does not haul
waste for outside treatment 14.06 14.63 16.67 19.01
B3 - Brewery with a restaurant and hauls waste for
outside treatment 12.61 12.90 14.71 16.76
B4 - Brewery with a restaurant that does not haul
waste for outside treatment 17.34 17.76 20.25 23.08
Notes:

HCF – hundred cubic feet; MFR – multi family resident; SFR – single family resident. (1) P roposed rates for FYE 2025 include a cost- of-service adjustment and increases for specific rates vary from the 14.0- percent overall rate revenue increase.

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SECTION 2 INPUTS AND ASSUMPTIONS
Financial, operational, and billing information provided by the City serve as the backbone of the revenue requirement and cost-of-service analysis. The projections developed for this analysis are based on several sources of information including the budgeted revenues and expenditures for FY 2023/24, actual revenues and expenditures from several prior fiscal years, EWPCF charge records, and other pertinent information such as the Council approved Utilities Reserve Policy. The analyses were completed by adding supplemental information and calculations to the City’s existing financial model.

2.1 Growth and Wastewater Usage
The escalation factors used in this analysis are based on a review of both long-term and recent cost escalation factors from the Engineering News-Record Index Construction Cost Index, an industry benchmarking resource, and based on input from Carlsbad staff based on realized cost escalations. Other costs were escalated based on recent and specific cost trends. A customer growth escalation factor, used to project revenues, wastewater accounts, and wastewater discharge, is included based on the City’s planning growth estimates. These factors are presented in Table 2.

Table 2 Escalation Factors
Escalation Factor FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 General Inflation 4.0% 2.5% 2.5% 2.5% 2.5%
Labor Inflation 4.0% 3.0% 3.0% 3.0% 3.0%
Labor - PERS (Normal Cost) 13.2% 13.2% 13.2% 13.2% 13.2% Labor - PERS (UAL) 17.0% 16.8% 16.6% 16.5% 16.3%
Labor - Health Insurance 6.4% 6.1% 5.9% 5.7% 5.7%
EWA Operating 3.0% 3.0% 3.0% 3.0% 3.0%
Chemicals Inflation 4.0% 4.0% 4.0% 4.0% 4.0%
Utilities Inflation 4.0% 4.0% 4.0% 4.0% 4.0%
Depreciation Funding 1.2% 1.2% 1.2% 1.2% 1.2%
Interest Earnings 2.5% 2.5% 2.5% 2.5% 2.5%
Customer Demand Growth 0.6% 0.2% 0.4% 1.0% 1.0%
Gnrl Infltn + Cstmr Dmnd Grwth 4.6% 2.7% 2.9% 3.5% 3.5% No Annual Increase 0.0% 0.0% 0.0% 0.0% 0.0%
One Time Expense -100.0% -100.0% -100.0% -100.0% -100.0%

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2.2 User Rate Categories
Carlsbad classifies its wastewater customers as follows:
 Group I:
» SFR.
» Single family residential with second dwelling unit.
» Mobile Home.
» Multi-Family Residential.
 Group II - Commercial 2.
 Group III - Commercial 3.
 Group IV - Commercial 4.
 Group V - Schools:
» Elementary Schools.
» Junior High Schools.
» High Schools.
» Boarding Schools.
 Group VI - Large volume (no accounts).
 Breweries:
» B1 - Brewery without a restaurant and hauls waste for outside treatment. » B2 - Brewery without a restaurant that does not haul waste for outside treatment. » B3 - Brewery with a restaurant and hauls waste for outside treatment. » B4 - Brewery with a restaurant that does not haul waste for outside treatment.  Industrial pretreatment class III.

SFR customers are charged a fixed monthly fee. SFR with an accessory-dwelling unit (ADU) has a higher fixed monthly fee to account for the additional discharges associated with the ADU as compared to a normal SFR account. All commercial groups and group VI customers are subject to a volumetric charge based on water usage. Schools are charged based on the number of students, as that influences a school’s impact on the wastewater system.

The volumetric charges vary between customer classes based on each class’s assumed flow and loadings.

Wastewater customers’ effluent discharges are not individually metered; instead, each user’s discharges are estimated using wastewater billing records and/or metered water consumption records and assumed strength characteristics. The City’s billing system has a detailed listing of historic water consumption by customer, property use classification, and month.

Commercial customers are grouped into Group II, Group III and Group IV depending on their discharge characteristics. Customers in the Brewery category are split into separate rate classes based on whether or not they also operate as a restaurant, and whether they haul their brewing waste offsite for treatment.

The Group VI - Large Volume rate category is currently not in use as the only customer in this category is located outside the service area and no longer has a business presence within the City.

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SECTION 3 REVENUE REQUIREMENT ANALYSIS
The revenue requirement analysis is a comprehensive test of a utility’s fiscal health, scrutinizing the adequacy of current revenues, and setting the basis for rate planning. It reviews the utility’s revenues, expenses, debts, and reserve policies, and other requirements assessing the viability of each metric going forward. Where cash flows and balances are insufficient, the revenue requirement analysis determines the needed additional cash flows to meet all funding goals.

The City’s FYE 2024 budget expenses serve as the base year for O&M costs. Furthermore, Carollo collected information related to current cash and restricted fund balances and policies, the budgeted capital improvement program expenditures, and all other operating and non-operating future revenues and expenditures.

Once the revenue requirement is established by compiling all of the City’s cost drivers, three tests are utilized to define the annual revenues necessary.
 The Cash Flow Sufficiency Test looks for a net positive cash flow at the end of each fiscal year to examine whether a utility is generating enough revenues to meet O&M expenses, debt service payments, policy driven additions to working capital (and reserves), miscellaneous capital outlays, replacement funding, and rate funded capital expenditures. When revenues exceed expenses, an increase in rate revenues is recommended.
 The Debt Service Coverage Test assesses a utility’s ability to meet their annual debt service obligations. Bond issuances regularly include a stipulation that the agency must maintain sufficient cash flows to meet annual debt service payments plus an additional amount by its covenant. Typical debt service coverage ratio (DSCR) target ranges from 1.25 to 1.40 times annual debt service payment, depending on an agency’s specific financial situation and the type of debt instrument issued. This means that for a utility’s every $100 in debt obligation, it needs to generate $125 to $140 in net operating income. When the calculated DSCR falls below the target, an increase in rate revenues is recommended. The City’s DSCR requirement is 1.20. The main analysis presented in this report assumes that the City has no plan to issue additional debt other than the planned State Revolving Fund (SRF) debt service loans for FYE 2025 and FYE 2026.  The Reserves Test determines whether sufficient cash balances are maintained to ensure continuation of their operations and any financial obligations in the event of unforeseen costs or revenue shortfalls.

This test is not legally binding but provides an assurance for a utility’s financial stability. When the end of the year balance falls before the target, an increase in rate revenues is recommended. However, reserve targets can be reduced in some cases in order to mitigate rate payer impacts.

3.1 Fiscal Policies
Utility fund policies are intended to be implemented as a measure of safety and security against future events that may negatively impact the utility’s financial health. Fund balances can address variability and timing of expenditures and receipts, as well as occasional disruptions in activities, costs, or revenues. The general objectives of these policies are to facilitate stable and predictable rates and funding sources, along with equitable recovery of costs from customers as they are being incurred (or accrued).

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Overall, a utility’s fund policies are a collection of rules and guidelines. The collective use of individual funds will allow the utility to minimize its exposure to revenue shortfalls and to mitigate the rate increases that would otherwise be necessary to fund the CIP. As a part of the Revenue Requirement Analysis, the utility’s fiscal policies were incorporated to assess their impact on rates in relation to capital funding and reserves.

The City’s utilities reserve policy sets a minimum reserve target based on components for 90-days of O&M costs, 1 year of annual debt service payments, 25-percent of the five year annual average CIP, a rate stabilization reserve set at 5-percent of annual rate revenues, and 1-percent of the system’s replacement value in an emergency reserve ($4.4 million for FYE 2025). The policy also includes general guidance to maintain total of these component reserves equivalent to between 180 and 365 days of O&M expenditures.

3.2 Operating Revenues
Operating revenues are projected from budgeted revenues based on the escalation factors shown in Table 2. Table 3 below shows the projected user rate revenues based on the current rates and prior to the inclusion of any rate increases for FYE 2025 through FYE 2029. This base level of rate revenue is expected to increase modestly over the study period based on the expected level of growth in customer accounts.

Table 3 Current Rate Revenues (in millions)
FYE 2024
(budget) FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Commodity Usage $23.557 $25.907 $25.962 $26.059 $26.316 $26.586 Sewer Pre-Treat 0.012 0.012 0.013 0.013 0.013 0.014 Total Wastewater Rate Revenues $23.569 $25.920 $25.974 $26.072 $26.329 $26.599 Notes:
(1) Li ne or column totals may not tie due to rounding.

In addition to rate revenues, the City also receives other offsetting revenues that can be used to decrease the amount of revenues needed from user rates. Table 4 summarizes the projected offsetting revenues for the wastewater fund.

Table 4 Offsetting Revenues (in millions)
FYE 2024
(budget) FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Fines & Forfeitures $0.120 $0.121 $0.121 $0.121 $0.123 $0.124 Income from Property & Investments(1) 0.744 0.503 0.205 0.177 0.176 0.156 Interdepartmental 0.120 0.125 0.128 0.131 0.134 0.138 Other Revenues 0.067 0.070 0.071 0.073 0.075 0.077 Total Offsetting Revenues $1.051 $0.819 $0.525 $0.503 $0.508 $0.495 Notes:
(1) Includes interest earned on the City’s fund balance based on the rate implementation. (2) Li ne or column totals may not tie due to rounding.

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3.3 Operations and Maintenance Expenditures
The cost-of-service analysis utilizes the wastewater fund’s FYE 2024 budget as the basis for forecasting future revenue needs. O&M expenditures are assumed to increase commensurate with cost inflation and projected cost increases associated with increases in wastewater flows due to growth and higher treatment standards. Revenues and expenses are projected for future fiscal years using the annual escalation factors shown in Table 2. Table 5 presents a summary of the projected operating expenditures for FYE 2025 through FYE 2029. Detailed O&M projections are included in Appendix A.

Table 5 Operating Expenditures (in millions)
FYE 2024
(budget) FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Personnel $3.322 $3.608 $3.726 $3.848 $3.973 $4.102 Encina (EWPCF) Operations 6.000 6.180 6.365 6.556 6.753 6.956 Maintenance & Equipment 4.100 3.981 4.086 4.194 4.305 4.419 Capital Outlay 0.025 0.026 0.026 0.027 0.028 0.028 Budget Adjustment (1.425) (1.456) (1.491) (1.528) (1.566) (1.605) Total Operating Expenses $12.022 $12.340 $12.713 $13.097 $13.492 $13.900 Notes:
(1) Li ne or column totals may not tie due to rounding.

3.4 Capital Improvement Program Funding
The City completed a wastewater master plan update in 2019 as well as an asset management master plan and a SCADA master plan. The plans developed capital improvement strategies, and the City has continually worked to refine the CIP based on project execution timelines, system needs, and funding availability. The City categorizes its capacity expansion-related projects as ‘connection projects’ and replacement-related projects as ‘replacement projects.’ Along with the City identified collection system projects, the EWPCF expects to continue its own reinvestment through rehabilitation and replacement projects.

The City has budgeted $53.22 million (in 2024 dollars) for 15 replacement projects for the next 5 years. In addition, there are projects associated with the EWA’s general improvement projects and planned asset replacements totaling approximately $40.69 million. The City also has budgeted $13.56 million for 7 connection (expansion related) projects for the next 5 years. Table 6 shows the projected CIP project costs for FYE 2025 through FYE 2029. The capital costs develop by the City are adjusted to the midpoint of construction. Based on discussion with the City, the funding analysis includes additional 2.0-percent annual cost escalation factor for FYE 2025 and FYE 2026 to account for increases in construction and contracting costs. Project level detail of the CIP is included in Appendix B.

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Table 6 Capital Improvement Plan Expenditures (in millions) FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Connection Fee Fund Projects $1.421 $1.312 $2.107 $4.700 $2.031 Replacement Fund Projects 6.598 13.102 9.325 12.615 11.580 Encina Projects 8.450 8.003 7.757 7.952 8.529
Total Sewer Projects $16.469 $22.417 $19.189 $25.267 $22.140 Total Escalated Cost $16.798 $25.187 $22.316 $30.412 $27.581 Notes:
(1) Li ne or column totals may not tie due to rounding.

The City frequently adjusts this CIP based on engineering and planning needs for the wastewater system.

Prior to the completion of the wastewater master plan and asset management master plan, the City’s CIP spending had been limited. The City continued to set aside funds for capital projects throughout that time in anticipation of increased investments, however, not to the level required by the wastewater master plan. While the use of these reserves to fund a share of capital projects will help to mitigate the necessary level of rate increases, significant rate increases will still be required due to the magnitude of the capital improvements that are necessary based on the recommendations of the sewer master plan and on the EWPCF’s CIP needs.

As shown in Table 6, the escalated CIP is projected to total approximately $122.29 million over the next 5 years. Table 7, on the next page, illustrates the anticipated funding sources to support these capital projects. At the beginning of FYE 2025, the City is expected to have a combined balance of $6.143 million between connection fee fund and replacement fund. Due to the level of capital spending needed, capital reserves will be drawn below the minimum of 25-percent of five year rolling average costs starting in FYE 2025 as they are spent to mitigate rate increases. Longer-term projections show the capital reserves rebounding above the minimum level in FYE 2030.

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Table 7 Capital Improvement Plan Funding (in millions)
FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Escalated Capital Costs (escalated) $16.798 $25.187 $22.316 $30.412 $27.581 Amount to be Rate Funded 4.594 14.868 12.615 21.131 21.278 Amount to be Funded with Reserves and
Loans 12.204 10.319 9.700 9.281 6.303

Beginning Capital Funds Balance
(Connection Fee and Replacement) $6.442 $4.567 $4.101 $3.528 $0.152 Transfers and Replacement Funding 5.361 5.423 5.486 5.549 5.612 Connection Fees 0.401 0.329 0.114 0.204 0.538
Loan Proceeds 0.500 4.101 0.000 0.000 0.000
Use of Replacement Funds (12.204) (10.319) (9.700) (9.281) (6.303) Year-End Transfer from Operating Fund 4.067 0.000 3.528 0.152 2.765 Year-End Balance $4.567 $4.101 $3.528 $0.152 $2.765 Notes:
(1) Li ne or column totals may not tie due to rounding.

An important aspect of the capital funding plan is that the City intends to draw on both existing replacement reserves and existing connection fee reserves to fund capital projects. Since the implementation of the City’s existing connection fees, reduced volumetric discharges due to conservation and changes in planned developments have reshaped the CIP projects that are necessary to serve new users. While some of the projects initially conceived and included in the connection fees have changed, other projects have been modified or expanded to take their place. Further, replacements and upgrades to the City’s existing infrastructure are required to maintain the assets that serve new users and to maintain the excess system capacity that will be needed to serve users that have not yet connected to the system. To these ends, the City plans to allocate existing connection fee reserves, as well as a share of future connection fees, to pay for replacement projects that have an excess capacity component.

3.5 Recommended Revenue Requirements
Rate revenue increases will be necessary in order to meet the City’s projected revenue requirements, with funding of the capital program as the primary driver. Table 8, on the next page, summarizes the revenue requirement projection. Additional details of the revenue requirement calculations are shown in Appendix C.

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Table 8 Revenue Requirement Summary (in millions)
FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Pre-Rate Increase
Rate Revenues without Increases $25.907 $25.962 $26.059 $26.316 $26.586 Revenues from Prior Years’ Increases 0.000 3.635 7.807 12.672 15.559 Offsetting Revenues (Inc. Pre Treatment) 0.831 0.538 0.516 0.522 0.509 Revenues $26.738 $30.134 $34.383 $39.510 $42.654
LESS:

Operating Expenditures $13.795 $14.204 $14.625 $15.058 $15.505 One-time Funding (Budget Analysis Amount) (1.456) (1.491) (1.528) (1.566) (1.605) Rate Funded Capital 4.594 14.868 12.615 21.131 21.278 Debt Service (SRF Loan) 0.000 0.000 0.294 0.294 0.294 Replacement Funding 5.361 5.423 5.486 5.549 5.612
Expenses $22.295 $33.004 $31.492 $40.466 $41.084
Cash Flow Surplus/(Deficit) $4.443 ($2.870) $2.891 ($0.956) $1.570 Rate Revenue Increase 14.00% 14.00% 14.00% 7.00% 7.00%
Post-Rate Increase
Revenues from Rate Increases $3.627 $4.143 $4.741 $2.729 $2.950 Less: Rate Increase Delay(1) ($1.814) ($2.072) ($2.371) ($1.365) ($1.475) Adjustment for Implementation Delay(2) ($1.814) $0.000 $0.000 $0.000 $0.000 Total Operating Revenues With Increases $26.738 $32.206 $36.753 $40.874 $44.129 Operating Cash Flows Available for Capital
and Reserves $4.443 ($0.798) $5.261 $0.409 $3.045
Operating Fund Reserve
Beginning Operating Fund Balance $4.546 $4.922 $4.123 $5.856 $6.113 Cash Flow 4.443 (0.798) 5.261 0.409 3.045
Transfers to Capital Reserve (4.067) 0.000 (3.528) (0.152) (2.765) Ending Operating Fund Balance $4.922 $4.123 $5.856 $6.113 $6.393 Ending Capital Fund Balance 4.567 4.101 3.528 0.152 2.765 Combined Ending Balance $9.489 $8.224 $9.385 $6.265 $9.158 Total Days of O&M Costs 281 days 236 days 261 days 170 days 240 days Operating Reserve Days of O&M Costs 130 days 106 days 146 days 148 days 151 days Notes:
(1) Adjustment to account for rate implementation on January 1 of each fiscal year. (2) Adjustment to reflect delay of rate implementation from January 1, 2025 to July 1, 2025. (3) Li ne or column totals may not tie due to rounding.

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SECTION 4 COST-OF-SERVICE ANALYSIS
The purpose of a cost-of-service (COS) analysis is to provide a rational basis for distributing the full costs of wastewater service to each customer in proportion to the demands they place on the system. The COS analysis yields an appropriate method for allocating costs, which could be continued until substantial changes in cost drivers or customer flow or loading patterns occur.

Using a COS analysis, user rates are developed to allocate O&M, debt service, and rehabilitation and replacement costs to system users. Allocating costs begins by developing unit costs for each billable constituent: treatment flow, BOD, TSS, and collections flow. Unit costs are then applied to the flow and loading of each customer category in order to allocate the costs to each customer. The City’s current rate structure was developed using a COS analysis. The overall procedure used to develop the user rates is as follows:
 Revenue Needs. Define the annual revenue that must be recovered from user rates and permit users.  Functional Allocation. Determine the percentage allocation of O&M and capital costs to the billable constituents: treatment flow, BOD, TSS, and collection flow.  Unit Costs. Develop unit costs for each billable constituent by dividing the total cost allocated to that constituent by the total wastewater flow or loadings of that constituent.  Customer Category Rates. Calculate customer rates based on each customer type’s wastewater discharge characteristics.

Note: The cost-of-service analysis values presented and discussed in this section are included for reference in Appendix D.

4.1 Revenue Needs
The revenue needs are defined as the amount of revenues that must be recovered through user rates and industrial user rates in order to cover annual expenditures less any offsetting revenues. Expenditures and offsetting revenues for FYE 2025 are shown in Table 9 below.

Table 9 Expenditures and Offsetting Revenues (in millions) FYE 2025
O&M Expenses $13.795
One-Time Funding (Budget Analysis Amount) (1.456)
Rate-Funded capital 4.594
Debt Service 0.000
Replacement Funding 5.361
Adjustment to Reflect Full Year Increase 3.627
Operating Cash Flows (Available for Capital and Reserves) 4.443 Less: Offsetting Revenues (Inc. Pre Treatment) (0.831)
Rate Revenues Required $29.534
Notes:
(1) Li ne or column totals may not tie due to rounding.

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For FYE 2025, wastewater rates must be set to recover $29.53 million in annual revenue requirements.

Because the calculated rate revenue increases reflected a January 1, 2025 implementation, and will be further delayed to July 1, 2025, the rate revenue requirements for each year include an “Adjustment to Reflect Full Year Increase.” This line item adjusts the required rate revenue to reflect a full year increase to match the full year of projected discharges and customer bills that are used to calculate the rates for each year.

4.2 Functional Allocation
The American Water Works Association (AWWA) defines a two-step process for recovering costs for wastewater services. First, capital and O&M costs should be allocated to applicable functional categories.

A functional category is a primary function of the utility that costs can be allocated to, then recovered based on how customers utilize the system. For this study, four functional categories were assumed as follows:
 Treatment flow costs are associated with the treatment of sewage at the EWPCF based on volume and regardless of strength. The City does not meter sewage discharges. Instead, flows by each customer class are estimated using water consumption. The flow component is measured in assumed flow in HCF.
 BOD costs are associated with providing the transportation and treatment of dissolved organisms within sewage effluent. BOD costs are allocated based on assumed BOD strength in a user class’s discharges. BOD is measured in pounds.
 TSS costs relate to providing the transportation and treatment of solid matter within sewage effluent.

TSS costs are allocated based on assumed TSS strength in a user class’s discharges. TSS is measured in pounds.
 Collection flow costs represent the collection and transportation of sewage discharges to the EWPCF for treatment. The City does not meter sewage discharges. Instead, flows by each customer class are estimated using water consumption. The flow component is measured in assumed flow in HCF.

Once the functional categories have been defined, each operating and capital cost is allocated on a line item basis to one or more of these functional categories. The functional costs are then used to develop unit costs for each category’s billable constituent.

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4.2.1 Functional Allocation Factors
Annual expenditures and off-setting non-rate revenues are allocated on a line-by-line item basis between the functional components outlined in Table 10. The allocation metrics shown above are consistent with industry standards. Items that cannot be reasonably allocated between these functional categories are allocated “As-All-Others” and costs are split proportionally based on the allocation split of all other items.

Table 10 Functional Allocation Factors
Allocation Factor Treatment
Flow BOD TSS Collection
Flow
As All
Other
(Weighted
Average)
Total
Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% - 100.0%
Collections - 5.0% 5.0% 90.0% - 100.0%
Staff Allocation - 3.3% 3.3% 60.2% 33.1% 100.0%
Vehicles - 5.0% 5.0% 90.0% - 100.0%
Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% - 100.0% Weighted Average O&M 26.6% 20.6% 22.3% 30.5% - 100.0%
Weighted Average Total Rate Revenue
Requirements 20.8% 17.0% 18.4% 43.8% - 100.0%
Notes:
(1) Li ne or column totals may not tie due to rounding.

The allocation factors shown in Table 10 were determined as follows:

Treatment Flow/BOD/TSS: This allocation factor is used to allocate the ongoing costs the City pays to the EWPCF for wastewater treatment. It represents the estimated average allocation of the City’s EWPCF charges and was determined based on detailed records of the City’s EWPCF invoices by allocating specific invoice elements to Treatment Flow, BOD, and TSS.

Collections: This allocation factor is applied to line item costs that are specifically attributable to the City’s wastewater collection activities. Collections costs are driven primarily by flow, and therefore they are allocated 90 percent to collections flow. The City’s collections staff also spend time and resources reacting to and preventing issues within the collection system that are related to the BOD and TSS carried in the wastewater. These issues include material buildup, pipe degradation, and odor problems among others.

To recognize these activities, a small share of collections costs is allocated to BOD and TSS at 5 percent each.

Staff Allocation: The staff allocation was determined using an analysis of the City’s wastewater staff positions and the typical costs for each position. Operations and maintenance staff as well as asset management staff were allocated to the functional categories using the collections allocation, as their responsibilities relate to the collection system. All other staff costs are allocated to the As All Other category to be redistributed based on the weighted average O&M costs.

Vehicles: The vehicles allocation was determined based on the responsibilities of the staff members who typically utilize City vehicles. These include predominantly operations and maintenance personnel and as such, the majority of vehicle costs are allocated based on the collections allocation and split between Collection Flow, BOS, and TSS.

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Capital Improvement Plan: Costs related to capital improvements are allocated to reflect the proposed CIP over the next 10 years. As shown in Table 11, capital costs for the collection system are assigned to the Collection Flow component. Capital costs for EWPCF projects are split between Treatment Flow, BOD, and TSS based on a typical allocation for municipal wastewater treatment plants. Using the 10-year CIP rather than a single year reflects that CIP projects are long-lived investments and helps to avoid large swings in cost allocations that could result from changes in the types of projects being completed from year-to-year.

Weighted Average – O&M: This allocation reflects the overall allocation of O&M costs.

Weighted Average – Total Revenue Requirements: This allocation reflects the overall allocation of total revenue requirements.

4.2.2 Functional Allocation Results
Table 11 shows the functional allocation of projected O&M costs for FYE 2025. The resulting allocated O&M is then included along with the other revenue requirement elements to determine the overall revenue requirements allocation as shown in Table 13. The total allocated revenue requirements for each functional category are then used to determine the unit costs by billable constituent and subsequently the rates. Additional detail showing the line item allocations is included in Appendix D.

Table 11 CIP Functional Allocation (in millions, 2024 Dollars) CIP Allocation Treatment
Flow BOD TSS Collection
Flow Ten-Year Total
Encina Projects - Treatment $27.024 $24.975 $26.923 $0.000 $78.922 Carlsbad Projects - Collections 0.000 0.000 0.000 119.361 119.361 Allocated Cash Funded CIP Costs $27.024 $24.975 $26.923 $119.361 $198.283 CIP Percentage Allocation 13.6% 12.6% 13.6% 60.2% 100.0% Notes:
(1) Li ne or column totals may not tie due to rounding.

Table 12 O&M Functional Allocation (in millions)
O&M Cost Allocation Treatment
Flow BOD TSS Collection
Flow
As All Other
(Weighted
Average)
Total
Personnel $0.000 $0.121 $0.121 $2.172 $1.195 $3.608 Maintenance & Equipment 0.000 0.064 0.064 1.154 2.981 4.263 Encina Services 2.376 1.687 1.835 0.000 0.000 5.898 Capital Outlay 0.003 0.003 0.003 0.015 0.000 0.026 Budget Adjustment 0.000 (0.034) (0.034) (0.615) (0.772) (1.456) Allocated Costs $2.380 $1.841 $1.989 $2.726 $3.404 $12.340 Reallocation of "As All Other" 0.906 0.701 0.758 1.038 Total O&M Allocation $3.286 $2.542 $2.747 $3.765 $12.340 O&M Percentage Allocation 26.63% 20.60% 22.26% 30.51% 100.0% Notes:
(1) Li
ne or column totals may not tie due to rounding.

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Table 13 Revenue Requirements Functional Allocation (in millions) Revenue Requirements Allocation Treatment
Flow BOD TSS Collection
Flow
As All Other
(Weighted
Average)
Total
Allocated O&M $3.286 $2.542 $2.747 $3.765 $12.340
Replacement Funding 0.731 0.675 0.728 3.227 0.000 5.361 Rate Funded Capital 0.626 0.579 0.624 2.766 0.000 4.594 Debt Service 0.000 0.000 0.000 0.000 0.000 0.000
Adj. to Reflect Full Year Increase 0.000 0.000 0.000 0.000 3.627 3.627 Operating Cash Flows 0.000 0.000 0.000 0.000 4.443 4.443 LESS: Offsetting Revenues 0.000 0.000 0.000 0.000 (0.831) (0.831) Allocated Costs $4.643 $3.796 $4.099 $9.758 $7.239 $29.534 Reallocation of "As All Other" 1.507 1.233 1.331 3.168 7.239 Total Allocation $6.150 $5.029 $5.429 $12.926 $29.534 O&M Percentage Allocation 20.82% 17.03% 18.38% 43.77%
Notes:
(1) Li ne or column totals may not tie due to rounding.

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SECTION 5 RATE DESIGN ANALYSIS

5.1 Customer Characteristics
The City does not individually meter wastewater usage by its customers. Metering wastewater is an expensive and generally inefficient process. Single family residential customers, including duplex and flat billed multi-family customers tracked as ‘M1’ customers in the billing system data, incur a flat monthly charge for service. Schools are charged on a per student basis, and all other customer classes are charged based on a percentage of water consumption, which is outlined in this report.

For the purposes of this study, City staff provided wastewater billing records, including January 2019 through June 2022. FY 2021/22 data were utilized to develop usage information by customer class and by month. Wastewater billing records list monthly charges by customer as well as the amount of water used by each customer. Water consumption was not provided for those customers who receive a flat monthly bill (i.e., single family residences and schools). For these customers, data from the water utility billing system was used to estimate discharges to the sewer system. In order to test the validity of the customer data, two tests were performed: an accuracy test and a reliability test.

The accuracy test verifies that the correct data is being used by performing a price out on the provided data set in order to calculate revenues and compare the result to the City’s actual revenues. An acceptable margin of error for this test is +/-3 percent (actual revenues compared to revenues calculated from the billing records). Based on preliminary actuals for FYE 2022, the actual wastewater rate revenues collected by the City amounted to $16.057 million. Using the customer data set provided, the calculated amount came to $15.699 million, a difference of $0.36 million or 2.24 percent. This minimal level of discrepancy validates that the data provided is sufficiently accurate to be used in the model and calculations.

Performing a reliability test is also necessary in order to confirm that the correct data is being used. From a statistical standpoint, the definition of reliability is the consistency of a set of measurements. In other words, "Can the provided data be considered a ‘normal’ year?" It is important to verify that a normalized year of data is being used as the foundation for developing rates; otherwise, revenues may be over or under collected. For example, during a wet year, consumption may be reduced. If a test for reliability is not performed under these circumstances, then the customer base may be understated. Rates would then be set at a level higher than needed and revenues would be over collected. While there is no guarantee that a ‘normal’ year will occur in the years addressed by this study, for the sake of projections, it is prudent to assume that this will be the case.

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After the provided customer data sets were validated, the number of accounts, the amount of flow, BOD, and TSS for each customer class were determined. This allowed for the allocation of costs from the various functional categories (as described in the previous section) to each customer class. The customer classes are defined as follows:
 Single Family Residential includes single family residences, duplexes and M1 (multiple PDUs) accounts. These users are charged a flat monthly wastewater bill. The analysis of water usage was used to determine an estimated wastewater discharge of 164.54 gallons per day (gpd) or 6.69 HCF per month. The estimated discharge was calculated by applying an 80-percent return to sewer factor to the average water use for minimum two months of each of the last three fiscal years. This amount represents the estimated monthly indoor water use that is discharged to the sewer by each single family customer.
 Multi-Family Residential includes multi-family residences and mobile homes. These users are charged based on their water usage (per HCF).
 Group II Commercial includes soft water services, car washes, office buildings, professional buildings, laundromats, department and retail stores, warehouses, hospital convalescent homes and indoor theaters. These users are charged based on their water usage (per HCF).  Group III Commercial includes hotels and motels without restaurants, repair and service stations, shopping centers, amusement parks, nightclubs, nurseries and greenhouses, commercial laundries, manufacturing and lumber yards. These users are charged based on their water usage (per HCF).  Group IV Commercial includes hotels and motels with restaurants, wholesale bakeries, supermarkets, mortuaries, and restaurants. These users are charged based on their water usage (per HCF).  Group V includes schools:
» Elementary Schools are billed on a per-student basis. » Middle Schools are billed on a per-student basis.
» High Schools are billed on a per-student basis.
» Boarding Schools are billed on a per-student basis.
 Group VI Large Volume includes organizations and social services. These users are charged based on their water usage (per HCF). Currently, there is no accounts under this class.  Breweries include all businesses where beer or beverage brewing takes place. Breweries are split into four classes based on the strength of their discharge. Each brewery class has specific concentration assumptions depending on whether or not they have an attached restaurant and whether or not they haul their brewing waste offsite for treatment. The brewery classes are:
» B1 - Brewery without a restaurant and hauls waste for outside treatment. These users are charged based on their water usage (per HCF).
» B2 - Brewery without a restaurant that does not haul waste for outside treatment. These users are charged based on their water usage (per HCF).
» B3 - Brewery with a restaurant and hauls waste for outside treatment. These users are charged based on their water usage (per HCF).
» B4 - Brewery with a restaurant and hauls waste for outside treatment. These users are charged based on their water usage (per HCF).

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 Industrial Pretreatment Class III includes any user discharging waste other than domestic waste, having a reasonable potential to adversely affect the Encina Water Pollution Control Facility and requires annual inspection and permits every three years. These users are charged based on their water usage.

5.1.1 Class Flow and Loading Assumptions
Return to sewer factors and loading assumptions for each class are based on typically expected values for each type of customer as well as additional analysis completed for previous rate planning efforts. The loading assumptions for most classes are source from the California Revenue Program Guidelines, Appendix G. Assumptions for breweries were developed during previous studies and reflect typical values for breweries published by brewing industry groups. The baseline assumptions are adjusted using a mass- balance calculation that compares the flow and loading estimated based on metered water use, return to sewer assumptions, and loading concentration assumptions to the City’s flow and loads measured by Encina for billing purposes.

Table 14 shows the flow mass balance for the FY 2021/22 billing data. Based on the billing data, the calculated flow per Equivalent Dwelling Unit (EDU) for single family customers, the assumed flow per student for schools, and assumed return to sewer factors for volumetric billed classes, estimated wastewater flows are 6.71 million gallons per day (MGD). EWA’s billing records (based on their FYE 2022 Annual Comprehensive Financial Report [ACFR]) indicated billed flow for Carlsbad at 5.74 MGD, 14.5- percent below the estimated amount. Based on this comparison, estimated flows for all customer classes and return to sewer factors for volumetric classes are reduced by 14.5-percent for subsequent calculations.

The mass balance analysis indicated the need for significant adjustments to BOD and TSS concentration assumptions. This level of discrepancy is typical for agencies whose concentration assumptions are based on Appendix G of the California Revenue Program Guidelines. Since those guidelines were developed agencies have experienced significant indoor water conservation leading to increased constituent concentrations in their wastewater. To account for this discrepancy, adjustments will be applied proportionally for all customer classes.

Table 15 shows the BOD mass balance for the FY 2021/22 billing data. Based on the adjusted flows from Table 14 and the assumed BOD concentration for each customer class, total BOD is estimated at 11,706 pounds per day. EWA’s billing records (based on their FYE 2022 ACFR) indicated billed BOD for Carlsbad at 17,639 pounds per day, 50.7-percent above the estimated amount. Based on this comparison, estimated BOD for all customer classes and assumed concentrations are increased by 50.7-percent for subsequent calculations.

Table 16 shows the TSS mass balance for the FY 2021/22 billing data. Based on the adjusted flows from Table 14 and the assumed TSS concentration for each customer class, total TSS is estimated at 10,962 pounds per day. EWA’s billing records (based on their FYE 2022 ACFR) indicated billed TSS for Carlsbad at 20,790 pounds per day, 89.6-percent above the estimated amount. Based on this comparison, estimated TSS for all customer classes and assumed concentrations are increased by 89.6-percent for subsequent calculations.

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Table 14 Wastewater Flow Mass Balance – FY 2021/22 Data Customer Class
Billed/Estimated
Water Use (HCF)
Initial RTS
Assumption
Estimated
Wastewater
Flow
Mass Balance
Adjustment
Estimated
Wastewater
Flow Adjusted RTS
Prior to Mass Balance Mass Balance Adjusted
GROUP I – SFR (inc. M1):

Est. Flow = 6.69 HCF/month/EDU x 252,817 EDUs billed/year 1,735,877 (251,498) 1,484,378 0.0% GROUP I - MFR/Mobile Homes 646,426 90.0% 581,783 (84,290) 497,493 77.0% GROUP II - Commercial 2 383,006 90.0% 344,706 (49,942) 294,764 77.0% GROUP III - Commercial 3 405,248 90.0% 364,723 (52,842) 311,881 77.0% GROUP IV - Commercial 4 199,917 90.0% 179,925 (26,068) 153,857 77.0% Institutional 680 90.0% 612 (89) 523 77.0%
GROUP V - Elementary Schools
Est. Flow = 6,905 Students x 8 gpd/student x 200 days / 748 gal/HCF 14,770 (2,140) 12,630 0.0% GROUP V - Junior High Schools
Est. Flow = 2,692 Students x 12 gpd/student x 200 days / 748 gal/HCF 8,637 (1,251) 7,386 0.0% GROUP V - High Schools
Est. Flow = 3,965 Students x 16 gpd/student x 200 days / 748 gal/HCF 16,963 (2,458) 14,505 0.0% GROUP V - Boarding Schools
Est. Flow = 180 Students x 44.7 gpd/student x 365 days / 748 gal/HCF 3,922 (568) 3,354 0.0% GROUP VI - Large Volume (no accounts) 0 90.0% 0 0 0 77.0% Brewery - B2 4,786 82.5% 3,948 (572) 3,376 70.5%
Brewery - B3 9,939 90.0% 8,945 (1,296) 7,649 77.0%
Brewery - B4 3,088 82.5% 2,548 (369) 2,178 70.5%
Industrial Pretreatment Class III 0 90.0% 8,140 (1,179) 6,960 77.0% Total (HCF) 1,653,090 3,275,498 (474,562) 2,800,936
Total MGD 6.71 (0.97) 5.74
Total Flows From EWA Billing (MGD) (FYE 2022
ACFR)
adjustment: -14.5% 5.74
Notes:
(1) Li ne or column totals may not tie due to rounding.

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Table 15 Wastewater BOD Mass Balance – FY 2021/22 Data
Customer Class
Estimated Wastewater Flow with
Mass Balance Adjustment
Estimated BOD
Prior to Mass Balance
BOD Mass
Balance
Adjustment
Estimated BOD
With to Mass Balance
HCF MG mg/L lbs lbs lbs mg/L
GROUP I - SFR 1,484,378 1,110.32 200 1,853,206 939,228 2,792,433 301 GROUP I - MFR/Mobile Homes 497,493 372.12 200 621,106 314,784 935,891 301 GROUP II - Commercial 2 294,764 220.48 130 239,816 121,542 361,358 196 GROUP III - Commercial 3 311,881 233.29 328 639,224 323,967 963,191 495 GROUP IV - Commercial 4 153,857 115.09 820 787,554 399,142 1,186,695 1,236 Institutional 523 0.39 130 425 215 640 196
GROUP V - Elementary Schools 12,630 9.45 130 10,249 5,195 15,444 196 GROUP V - Junior High Schools 7,386 5.52 130 5,994 3,038 9,032 196 GROUP V - High Schools 14,505 10.85 130 11,771 5,966 17,737 196 GROUP V - Boarding Schools 3,354 2.51 130 2,721 1,379 4,101 196 GROUP VI - Large Volume (no accounts) 0 0.00 80 0 0 0 121 Brewery - B2 3,376 2.53 1,265 26,665 13,514 40,180 1,906 Brewery - B3 7,649 5.72 820 39,154 19,844 58,997 1,236 Brewery - B4 2,178 1.63 1,610 21,894 11,096 32,991 2,426 Industrial Pretreatment Class III 6,960 5.21 299 12,972 6,574 19,546 450 Total (lbs) 2,800,936 2,095 4,272,752 2,165,483 6,438,235 Pounds per Day 11,706 17,639
Pounds per Day Measured by EWA
(FYE 2022 ACFR)
adjustment: 50.7% 17,639
Notes:
mg/L - milligrams per liter.
(1) Li ne or column totals may not tie due to rounding.

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Table 16 Wastewater TSS Mass Balance – FY 2021/22 Data
Customer Class
Estimated Wastewater Flow
with Mass Balance
Adjustment
Estimated TSS
Prior to Mass Balance
TSS Mass
Balance
Adjustment
Estimated TSS (lbs)
With to Mass Balance
HCF MG mg/L lbs lbs lbs mg/L
GROUP I - SFR 1,484,378 1,110.32 200 1,853,206 1,661,375 3,514,580 379 GROUP I - MFR/Mobile Homes 497,493 372.12 200 621,106 556,814 1,177,920 379 GROUP II - Commercial 2 294,764 220.48 121 221,825 198,863 420,688 229 GROUP III - Commercial 3 311,881 233.29 279 542,962 486,758 1,029,720 529 GROUP IV - Commercial 4 153,857 115.09 680 653,093 585,490 1,238,583 1,290 Institutional 523 0.39 100 327 293 620 190
GROUP V - Elementary Schools 12,630 9.45 100 7,884 7,068 14,952 190 GROUP V - Junior High Schools 7,386 5.52 100 4,611 4,133 8,744 190 GROUP V - High Schools 14,505 10.85 100 9,055 8,117 17,172 190 GROUP V - Boarding Schools 3,354 2.51 100 2,093 1,877 3,970 190 GROUP VI - Large Volume (no accounts) 0 0.00 80 0 0 0 152 Brewery - B2 3,376 2.53 810 17,078 15,310 32,388 1,537 Brewery - B3 7,649 5.72 680 32,469 29,108 61,577 1,290 Brewery - B4 2,178 1.63 1,090 14,823 13,289 28,111 2,067 Industrial Pretreatment Class III 6,960 5.21 477 20,735 18,589 39,324 905 Total (lbs) 2,800,936 1,110.32 4,001,267 3,587,083 7,588,350 Pounds per Day 10,962 20,790
Pounds per Day Measured by EWA
(FYE 2022 ACFR)
adjustment: 89.6% 20,790
Notes:
(1) Li ne or column totals may not tie due to rounding.

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Using these assumptions and adjusted flow and loading discussed above, and wastewater billing records, the number of accounts, flows, and loading were projected for each customer class based on the City’s account growth assumptions. Projected statistics for FYE 2025 for each customer class are summarized in Table 17.

The City’s rate structure includes a minimum monthly bill provision in which volumetric users are charged for a minimum of 1 EDU (the single family charge) for months where their otherwise calculated bill would be less than that amount. The incremental flow and loads associated with those minimum charges is accounted for in the unit cost calculations so that the rates accurately reflect the amount of units billed, inclusive of those indicated by the minimum charges.

The incremental flow associated with the minimum charges is calculated by applying the flow per EDU to the number of minimum charges occurring. Incremental loading is calculated by applying the adjusted residential concentrations for BOD and TSS to the incremental flow. The incremental amount billed in minimum charges is shown in Table 17.

Table 17 Expected Billed Units by Customer Class for FY 2024/25 Customer Class Monthly Account Flow (HCF) BOD (lbs) TSSb(lbs) GROUP I – SFR 21,844 1,499,777 2,821,402 3,551,041
GROUP I – MFR/Mobile Homes 784 502,654 945,600 1,190,140 GROUP II – Commercial 2 1,102 297,822 365,107 425,052 GROUP III – Commercial 3 247 315,117 973,183 1,040,402 GROUP IV – Commercial 4 167 155,453 1,199,006 1,251,432 Institutional 3 529 647 626
Elementary School 20 12,761 15,604 15,107
Middle School 4 7,463 9,125 8,835
High School 4 14,655 17,921 17,350
Boarding School 1 3,388 4,143 4,011
GROUP VI – Large Volume (no accounts) 0 0 0 0
Breweries
B1 0 0 0 0
B2 7 3,411 40,597 32,724
B3 12 7,728 59,609 62,216
B4 4 2,201 33,333 28,403
Industrial Pretreatment Class III 1 7,033 19,749 39,732 Incremental Amount Billed in Minimum Charges 308,704 580,737 730,921 Total 24,200 3,138,696 7,085,763 8,397,992
Notes:
(1) Li ne or column totals may not tie due to rounding.

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5.2 Unit Cost Calculation
Unit costs for each billable constituent are calculated by dividing the total allocated revenue requirements from Table 13 by the billed units from Table 17. Table 18 shows the calculation of unit costs for FYE 2025.

Table 18 Unit Cost per Billable Constituents
Unit Cost Calculation Treatment Flow BOD TSS Collection Flow Allocated Rate Revenue (Millions) $6.150 $5.029 $5.429 $12.926 Unit Basis for Rate Design Estimated Sewer
Flows (HCF)
Estimated BOD
Discharges (lbs)
Estimated TSS
Discharges
(lbs)
Estimated Sewer
Flows (HCF)
FYE 2025 Billed Units 3,138,696 7,085,763 8,397,992 3,138,696 FYE 2025 Unit Costs $1.959 per HCF $0.710 per lb $0.646 per lb $4.118 per HCF Notes:
(1) Li ne or column totals may not tie due to rounding.

5.3 Rate Design
Based on the rate evaluation performed under the previous tasks, it was determined that in general, the City’s current rate structure is capable of meeting the City's goals. The recommended rates are based on “cost-of-service” principles that incorporate the work performed in previous tasks and adhere to Proposition 218 requirements.

Rates for each class are determined using two general steps:
 First, a unit cost per HCF of wastewater discharge is determined for each class based on the unit costs per billable constituent from Table 18 and the assumed BOD and TSS concentrations from Tables 15 and 16.
 Next, each class’s unit cost per HCF of discharge is used along with other assumptions to determine the proposed rate.
» For single family and other flat rate customers, the class unit cost per HCF is multiplied by the assumed flow per month to determine the monthly charge. » For customers charged based on water usage, each class’s unit cost per HCF is multiplied by its adjusted return-to-sewer factor to determine the rate per HCF of water consumption. » For schools, the class unit cost per HCF is multiplied by the assumed flow per student to determine the monthly rate per student.

The following sections outline the calculations used to determine rates for each customer class.

5.3.1 Class Unit Costs per HCF Discharges
As noted above, the first step in the rate calculations is determining each class’s unit cost per HCF of sewage discharged. This calculation is performed by converting the BOD and TSS mg/L concentrations from Tables 15 and 16 to a mass load concentration in lb/HCF. Next, the mass load in lb/HCF is multiplied by its respective unit cost per lb from Table 16 to calculate a component unit cost per HCF. Finally, the component unit costs per HCF for BOD and TSS are added to the unit costs for Treatment Flow and Collection Flow from Table 18 (already in terms of per HCF) to determine the total unit cost per HCF.

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An example of this calculation for Group 1 residential customers is shown in Table 19. An identical calculation is used to determine the $/HCF unit cost for each class as summarized in Table 20.

Table 19 Group I Unit Cost per HCF Calculation
Group I SFR 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 301 1.881 $0.710 $1.34
TSS 379 2.367 $0.646 $1.53
Treatment Flow N/A N/A N/A $1.96
Collections Flow N/A N/A N/A $4.12
Total Unit Cost per HCF N/A N/A N/A $8.94
Mass Load, lb per HCF (B) = [Concentration, mg/L (A)] x [3.785 gallons per L] x [748 gallons per HCF] / [453,592 mg per lb]
Unit Cost, $/HCF (D) = [Mass Load, lb/HCF (B)] x [Unit Cost, $/lb (C)] Notes:
(1) Li ne or column totals may not tie due to rounding.

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Table 20 All Classes Unit Cost per HCF Calculation
Customer Class Unit Costs
per HCF Discharged BOD (mg/L) Mass Load
lb/HCF BOD ($/HCF) TSS (mg/L) Mass Load
lb/HCF TSS ($/HCF)
Flow
(Collection
and
Treatment)
($/HCF)
Total $ Per
HCF
Discharged
GROUP I - SFR & Minimum Charges 301 1.881 $1.34 379 2.367 $1.53 $6.08 $8.94 GROUP I - MFR/Mobile Homes 301 1.881 $1.34 379 2.367 $1.53 $6.08 $8.94 GROUP II - Commercial 2 196 1.226 $0.87 229 1.427 $0.92 $6.08 $7.87 GROUP III - Commercial 3 495 3.088 $2.19 529 3.301 $2.13 $6.08 $10.40 GROUP IV - Commercial 4 1,236 7.712 $5.47 1,290 8.049 $5.20 $6.08 $16.76 Institutional 196 1.223 $0.87 190 1.184 $0.77 $6.08 $7.71 Elementary Schools 196 1.223 $0.87 190 1.184 $0.77 $6.08 $7.71 Junior High Schools 196 1.223 $0.87 190 1.184 $0.77 $6.08 $7.71 High Schools 196 1.223 $0.87 190 1.184 $0.77 $6.08 $7.71 Boarding Schools 196 1.223 $0.87 190 1.184 $0.77 $6.08 $7.71 GROUP VI - Large Volume (no accounts) 121 0.752 $0.53 152 0.947 $0.61 $6.08 $7.22 Breweries
B1 196 1.226 $0.87 229 1.427 $0.92 $6.08 $7.87
B2 1,906 11.899 $8.45 1,537 9.591 $6.20 $6.08 $20.73 B3 1,236 7.712 $5.47 1,290 8.049 $5.20 $6.08 $16.76 B4 2,426 15.142 $10.75 2,067 12.903 $8.34 $6.08 $25.17 Industrial Pretreatment Class III 450 2.808 $1.99 905 5.649 $3.65 $6.08 $11.72 Notes:
(1) Li ne or column totals may not tie due to rounding.

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5.3.2 Customer Class Rate Calculations
Charges for customers that pay flat monthly fees are determined by multiplying their $/HCF unit cost by their assumed monthly flow. The calculation of monthly charges for single-family and applicable multi- family, duplex, and flat charges is shown in Table 21. The calculated FYE 2025 charge for a single EDU customer is $59.85, equal to the $/HCF unit cost multiplied by the estimated monthly flow of 6.69 HCF.

For single family customers with an ADU, and EDU flow factor of 1.5 is applied to reflect the additional sewage discharged by the ADU. This results in a calculated charge for FYE 2025 of $89.77.

Table 21 Group I Monthly Rate Calculation
Unit Cost
$/HCF
Discharged
EDU Flow
Factor
Monthly
Discharge (HCF)
Proposed Monthly
Rate (per Account)
GROUP I – Single-Family & Minimum Charges $8.94 1.0 6.69 $59.85 Single Family with ADU $8.94 1.5 10.04 $89.77
Table 22 shows the rate calculation for classes that pay rates based on their billed water consumption in HCF. The rates are determined by multiplying each class’s $/HCF unit cost by the adjusted return to sewer factor to determine the rate per HCF of water consumed.

Table 22 Rate 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)
GROUP I – Multi-Family/Mobile Homes $8.94 76.96% $6.89 GROUP II - Commercial 2 $7.87 76.96% $6.06
GROUP III - Commercial 3 $10.40 76.96% $8.01
GROUP IV - Commercial 4 $16.76 76.96% $12.90
Brewery - B1 $7.87 76.96% $6.06
Brewery - B2 $20.73 70.55% $14.63
Brewery - B3 $16.76 76.96% $12.90
Brewery - B4 $25.17 70.55% $17.76
GROUP VI - Large Volume (no accounts) $7.22 76.96% $5.56 Industrial Pretreatment Class III $11.72 76.96% $9.03
Charges for schools that pay rates on a per-student basis are determined by multiplying their $/HCF unit cost by their assumed monthly flow per student. The calculation of monthly charges for each type of school is shown in Table 23.

Table 23 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)
GROUP V - Elementary Schools $7.71 6.84 0.15 $1.18
GROUP V - Junior High Schools $7.71 10.26 0.23 $1.77 GROUP V - High Schools $7.71 13.68 0.30 $2.36
GROUP V - Boarding Schools $7.71 38.18 1.55 $11.98
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5.3.3 Proposed Rates
Table 24 shows the proposed rates for January 1, 2025 (delayed to July 1, 2025), which are determined based on the COS analysis and Rate Design analysis as discussed above. Effective rates for each customer class in the first year vary from the overall 14-percent increase due to the updated cost allocation and rate design calculations. Rates for 2026 through 2029 are determined by applying the proposed rate revenue increases for those years to the 2025 rates.

Table 24 Proposed Wastewater Rates by Customer Class
Customer Class Current Rate
FYE 2025
Proposed
Delayed to Jul. 1
2025
FYE 2026
Proposed
Jan. 1 2026
FYE 2027
Proposed
Jan. 1 2027
Increase(1) 14.00% CoS
Adj. 14.00% 14.00%
Group I - Residential - Monthly Flat Rate
Single Family Resident (SFR) $51.74 $59.85 $68.22 $77.77 SFR w/ Second Dwelling Unit 77.60 89.77 102.33 116.66
Group I - Residential - Rates per HCF
Multi Family Resident (MFR) $5.95 $6.89 $7.85 $8.95
Mobile Home 5.95 6.89 7.85 8.95
Commercial - Rates per HCF
GROUP II - Commercial 2 $5.06 $6.06 $6.91 $7.88
GROUP III - Commercial 3 7.21 8.01 9.13 10.41
GROUP IV - Commercial 4 12.61 12.90 14.71 16.76
Industrial Pretreatment Class III 8.14 9.03 10.29 11.73 Group V - School - Monthly Rates per Student
Elementary School (per student) $1.02 $1.18 $1.34 $1.53 Junior High School (per student) 1.53 1.77 2.01 2.30
High School (per student) 2.03 2.36 2.68 3.06
Boarding School (per student) 10.56 11.98 13.65 15.56
Breweries - Rates per HCF
B1 – Brewery without a restaurant and hauls
waste for outside treatment $5.06 $6.06 $6.91 $7.88
B2 – Brewery without a restaurant that does
not haul waste for outside treatment 14.06 14.63 16.67 19.01 B3 – Brewery with a restaurant and hauls
waste for outside treatment 12.61 12.90 14.71 16.76
B4 – Brewery with a restaurant that does not
haul waste for outside treatment 17.34 17.76 20.25 23.08 Notes:
(1) R ates are rounded to the nearest $0.01.

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SECTION 6 ALTERNATIVE OPTION
Using the same FYE 2024 budget, CIP, and assumptions, Carollo developed a scenario should the City decide to utilize bonds to mitigate impact of CIP funding on the rate payers. This chapter summarizes the findings and results of the alternative option with bond issuance.

6.1 Bond Issuance
Issuing bonds could help to mitigate immediate impact of CIP funding on the rate payers by recovering the cost over the future years. City has a SRF loan in the amount of $4,601,000 entering repayment in FYE 2027 with annual debt service of $293,749. Anticipated draws on this loan are in Table 25 below. The calculated coverage during the Study period is shown well above the requirement of 1.20 x, indicating the City’s capacity to issue additional debt if appropriate.

For the alternative option, additional debt issuances totaling $40.0M are assumed as shown in the table below. These potential bonds are assumed with loan terms of 30 years, 5.0 percent interest rates, and

1.0 percent of issuance cost. The debt service payments are calculated based on the assumptions shown in the table below. The table also illustrates the City’s capacity to meet its debt service coverage ratio requirement of 1.20 x with the assumed bonds.

Table 25 Alternative Option – Bond Summary
FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Assumptions SRF Loan SRF Loan Bond Bond
Term 20 years 20 years 30 years n/a 30 years
Interest Rate 2.45% 2.45% 5.00% n/a 5.00%
Issuance Costs n/a n/a 1.00% n/a 1.00%
Total Proceeds $500,0001 $4,101,0001 $25,000,000 n/a $15,000,000

Annual Debt Service Payment3 $- $- $1,936,462 $1,936,462 $2,922,090 DSCR (Target of 1.25x) No Debt No Debt 8.71 x 9.24 x 6.55 x Notes:
(1) Planned draws for the existing SRF loan.
(2) A nnual debt service payment shows the combined payments for all of the loans and bonds issued at any given year .

6.2 Recommended Revenue Requirements – Alternative Option With the additional debt issuances lower rate increases, as compared to those discussed in the previous sections, could be implemented. With the assumed debt issuances, the alternative option includes rate increases at 8-percent per year for FYE 2025 and FYE 2026 and at 3-percent per year thereafter. Though the combined fund balance in FYE 2026 falls below the minimum targets due to bond issuance timing, reserves would rebound in the following year. Table 26 below summarizes the revenue requirement projection.

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Table 26 Alternative Option with Bond Funding – Revenue Requirement Summary (in millions) FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Pre-Rate Increase
Rate Revenues without Increases $25.907 $25.962 $26.059 $26.316 $26.586 Revenues from Prior Years’ Increases 0.000 2.077 4.336 5.300 6.312 Offsetting Revenues (Inc. Pre Treatment) 0.831 0.538 0.491 0.624 0.693 Revenues $26.738 $28.576 $30.886 $32.240 $33.591
LESS:

Operating Expenditures $13.795 $14.204 $14.625 $15.058 $15.505 One-time Funding (Budget Analysis Amount) (1.456) (1.491) (1.528) (1.566) (1.605) Rate Funded Capital 4.594 14.788 0.000 6.973 1.843
Debt Service 0.000 0.000 1.936 1.936 2.922
Replacement Funding 5.361 5.423 5.486 5.549 5.612
Expenses $22.295 $32.924 $20.519 $27.951 $24.278
Cash Flow Surplus/(Deficit) $4.443 ($4.348) $10.367 $4.289 $9.313 Rate Revenue Increase 8.00% 8.00% 3.00% 3.00% 3.00%
Post-Rate Increase
Revenues from Rate Increases $2.073 $2.243 $0.912 $0.948 $0.987 Less: Rate Increase Delay(1) ($1.036) ($1.122) ($0.456) ($0.474) ($0.493) Adjustment for Implementation Delay(2) ($1.036) $0.000 $0.000 $0.000 $0.000 Total Operating Revenues With Increases $26.738 $29.698 $31.342 $32.714 $34.084 Operating Cash Flows Available for Capital
and Reserves $4.443 ($3.226) $10.823 $4.763 $9.806
Operating Fund Reserve
Beginning Operating Fund Balance $4.546 $4.842 $1.615 $7.136 $7.313 Cash Flow 4.443 (3.226) 10.823 4.763 9.806
Transfers to Capital Reserve (4.147) 0.000 (5.302) (4.587) (8.646) Ending Operating Fund Balance $4.842 $1.615 $7.136 $7.313 $8.473 Ending Capital Fund Balance 4.647 4.100 15.002 4.587 8.646 Combined Ending Balance $9.489 $5.715 $22.138 $11.900 $17.119 Days of O&M Costs – Total Reserves 281 days 164 days 617 days 322 days 450 days Days of O&M Costs – Operating Reserve Only 128 days 42 days 178 days 177 days 199 days Notes:
(1) Adjustment to account for rate implementation on January 1 of each fiscal year. (2) Adjustment to reflect delay of rate implementation from January 1, 2025 to July 1, 2025. (3) Li ne or column totals may not tie due to rounding.

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6.3 Proposed Rates – Alternative Option
Based on the adjusted revenue requirement shown in Table 27, the cost of service analysis and rate designs are conducted in similar matter detailed in Sections 4 and 5. The resulting rates for alternative options are summarized in the table below. The proposed rates for January 1, 2025 (delayed to July 1, 2025), are determined based on the COS analysis and Rate Design analysis as discussed above.

Effective rates for each customer class in the first year vary from the overall 8-percent increase due to the updated cost allocation and rate design calculations. Rates for 2026 through 2029 are determined by applying the proposed rate revenue increases for those years to the 2025 rates.

Table 27 Alternative Option with Bond Funding – Proposed Wastewater Rates by Customer Class Customer Class Current Rate
FYE 2025
Proposed
Delayed to Jul. 1
2025
FYE 2026
Proposed
Jan. 1 2026
FYE 2027
Proposed
Jan. 1 2027
Increase(1) 8.00% CoS Adj. 8.00% 3.00%
Group I - Residential - Monthly Flat Rate
Single Family Resident (SFR) $51.74 $56.70 $61.23 $63.07 SFR w/ Second Dwelling Unit 77.60 85.04 91.84 94.60
Group I - Residential - Rates per HCF
Multi Family Resident (MFR) $5.95 $6.53 $7.05 $7.26
Mobile Home 5.95 6.53 7.05 7.26
Commercial - Rates per HCF
GROUP II - Commercial 2 $5.06 $5.74 $6.20 $6.39
GROUP III - Commercial 3 7.21 7.59 8.20 8.44
GROUP IV - Commercial 4 12.61 12.22 13.20 13.60
Industrial Pretreatment Class III 8.14 8.55 9.24 9.51
Group V - School - Monthly Rates per Student
Elementary School (per student) $1.02 $1.12 $1.21 $1.24 Junior High School (per student) 1.53 1.68 1.81 1.86
High School (per student) 2.03 2.23 2.41 2.48
Boarding School (per student) 10.56 11.35 12.25 12.62
Breweries - Rates per HCF
B1 – Brewery without a restaurant and
hauls waste for outside treatment $5.06 $5.74 $6.20 $6.39 B2 – Brewery without a restaurant that
does not haul waste for outside treatment 14.06 13.86 14.96 15.41 B3 – Brewery with a restaurant and hauls
waste for outside treatment 12.61 12.22 13.20 13.60
B4 – Brewery with a restaurant that does
not haul waste for outside treatment 17.34 16.83 18.17 18.72 Notes:
(1) R ates are rounded to the nearest $0.01.

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Table 28 compares the rate revenue increases required for the baseline option presented in the previous section to those required for the alternative option.

Table 28 Comparison of Rate Revenue Increases for Baseline Option to Alternative with Additional Bonds Financial Forecast Option FYE 2025 FYE 2026 FYE 2027
Baseline Option - No Additional Bonds 14.0% 14.0% 14.0% Alternative Option - $40 million in Additional Bonds 8.0% 8.0% 3.0% Figure 2 compares the monthly single family bill for the baseline and alternative options.

Figure 2 Single Family Bill Comparison
$51.74
$59.85
$68.22
$77.77
$51.74
$56.70 $61.23 $63.07
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
FYE 2025 FYE 2026 FYE 2027
Monthly Single Family Bill
Baseline Option - No Additional Bonds
Alternative Option - $40 million in Additional Bonds
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APPENDIX A PROJECTED O&M

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CITY OF CARLSBAD
Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
O&M Escalators 2024 2025 2026 2027 2028 2029
General Inflation 5.00% 4.00% 2.50% 2.50% 2.50% 2.50%
Labor Inflation 5.00% 4.00% 3.00% 3.00% 3.00% 3.00%
Labor - PERS (Normal Cost) 13.20% 13.20% 13.20% 13.20% 13.20% 13.20% Labor - PERS (UAL) 16.66% 16.95% 16.79% 16.63% 16.47% 16.31% Labor - Health Insurance 6.63% 6.38% 6.13% 5.90% 5.70% 5.70% EWA Operating 10.00% 3.00% 3.00% 3.00% 3.00% 3.00%
Chemicals Inflation 7.00% 4.00% 4.00% 4.00% 4.00% 4.00% Utilities Inflation 7.00% 4.00% 4.00% 4.00% 4.00% 4.00% Construction Inflation 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% Depreciation Funding 1.17% 1.16% 1.15% 1.15% 1.15% 1.15% Interest Earnings 2.30% 2.50% 2.50% 2.50% 2.50% 2.50%
Customer Demand Growth 0.75% 0.61% 0.21% 0.38% 0.99% 1.02% Gnrl Infltn + Cstmr Dmnd Grwth 5.75% 4.61% 2.71% 2.88% 3.49% 3.52% No Annual Increase 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
One Time Expense -100.00% -100.00% -100.00% -100.00% -100.00% -100.00% O&M Summary

REVENUES
Charges for Services 23,568,818$ 25,919,790$ 29,609,082$ 33,879,632$ 39,001,750$ 42,158,596$ Fines and Forfeitures 120,000 120,730 120,980 121,430 122,630 123,890 Income from Property & Investments 744,011 503,337 204,758 177,128 176,089 156,499 Interdepartmental 120,000 124,800 127,920 131,120 134,400 137,760 Other Revenues 67,000 69,680 71,422 73,205 75,040 76,916 TOTAL 24,619,830$ 26,738,337$ 30,134,162$ 34,382,515$ 39,509,908$ 42,653,661$

EXPENDITURES
Personnel 3,322,088$ 3,608,180$ 3,726,452$ 3,847,915$ 3,972,679$ 4,101,841$ Maintenance & Equipment 13,975,595 14,067,207 14,383,443 14,707,878 15,040,746 15,382,190 Capital Outlay 24,651 25,637 26,278 26,935 27,608 28,299 Other Financing Uses 10,090,113 - - - - - TOTAL 27,412,447$ 17,701,025$ 18,136,173$ 18,582,727$ 19,041,034$ 19,512,330$ NET OPERATING SURPLUS (DEFICIT) (2,792,617)$ 9,037,312$ 11,997,989$ 15,799,788$ 20,468,874$ 23,141,331$

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Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
CODE LINE ITEM ESCALATOR FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 REVENUES Working Budget Projection Projection Projection Projection Projection Charges for Services
5100 Commodity Usage Customer Demand Growth 23,556,818$ 25,907,310$ 29,596,290$ 33,866,520$ 38,988,310$ 42,144,820$ 5112 Sewer Pre-Treat General Inflation 12,000 12,480 12,792 13,112 13,440 13,776 5121 Sewer Laterals General Inflation - - - - - - Other Charges for Services General Inflation - - - - - - Total Charges for Services 23,568,818$ 25,919,790$ 29,609,082$ 33,879,632$ 39,001,750$ 42,158,596$

24.05% 9.97%
Fines and Forfeitures
5225 Late Charges Customer Demand Growth 120,000$ 120,730$ 120,980$ 121,430$ 122,630$ 123,890$ Other Fines and Forfeitures Customer Demand Growth - - - - - - Total Fines and Forfeitures 120,000$ 120,730$ 120,980$ 121,430$ 122,630$ 123,890$ Income from Property & Investments
5300 Interest Income - Pooled Cash [ Calculated ] 744,011$ 503,337$ 204,758$ 177,128$ 176,089$ 156,499$ 5305 Interest-Unrealzd Gains/Losses General Inflation - - - - - - 5310 Interest Income Frm Othr Inv General Inflation - - - - - - 5360 Sale of Capital Assets (cash adj) General Inflation - - - - - - 5361 Donated Assets General Inflation - - - - - - Other Income from Property & Investments General Inflation - - - - - - Total Income from Property & Investments 744,011$ 503,337$ 204,758$ 177,128$ 176,089$ 156,499$ Interdepartmental
5430 Eng Labor General Inflation 120,000$ 124,800$ 127,920$ 131,120$ 134,400$ 137,760$ Other Interdepartmental General Inflation - - - - - - Total Interdepartmental 120,000$ 124,800$ 127,920$ 131,120$ 134,400$ 137,760$ Other Revenues
5550 Prior Year Fee Refunds General Inflation -$ -$ -$ -$ -$ -$ 5636 Loss Recovery General Inflation - - - - - - 5639 Misc Reimbursement Exp. General Inflation 65,000 67,600 69,290 71,020 72,800 74,620 5664 MISC AR Write Offs General Inflation - - - - - - 5674 Misc Revenues General Inflation 2,000 2,080 2,132 2,185 2,240 2,296 4691 MISC OTHER FED One Time Expense - - - - - - 4750 MISC RV FROM OTHER AGENCIES One Time Expense - - - - - - Other General Inflation - - - - - - Total Other Revenues 67,000$ 69,680$ 71,422$ 73,205$ 75,040$ 76,916$ TOTAL REVENUES 24,619,830$ 26,738,337$ 30,134,162$ 34,382,515$ 39,509,908$ 42,653,661$

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Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
CODE LINE ITEM ESCALATOR FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 EXPENDITURES Working Budget Projection Projection Projection Projection Projection Personnel
6100 Reg Salaries Labor Inflation 2,130,695$ 2,215,920$ 2,282,400$ 2,350,870$ 2,421,400$ 2,494,040$ 6101 Incentive Pay Labor Inflation - - - - - - 6135 Hazard Pay Labor Inflation 49,586 51,570 53,120 54,710 56,350 58,040 6150 IOD Worker's Comp Labor Inflation - - - - - - 6200 Overtime Salaries Labor Inflation 65,000 67,600 69,630 71,720 73,870 76,090 6210 Standby Pay Labor Inflation 25,470 26,490 27,280 28,100 28,940 29,810 6300 Parttimes Salaries Labor Inflation - - - - - - 6305 Intern Salaries Labor Inflation 3,646 3,790 3,900 4,020 4,140 4,260 6400 Temporary Help Labor Inflation - - - - - - 6501 Health Insurance Labor - Health Insurance 428,473 455,810 483,750 512,290 541,490 572,350 6510 Life Insurance General Inflation 1,438 1,500 1,540 1,580 1,620 1,660 6511 AD&D - City Paid General Inflation 716 740 760 780 800 820 6520 Vision Insurance General Inflation - - - - - - 6530 Medicare General Inflation 32,138 33,420 34,260 35,120 36,000 36,900 6629 Cell Phone Reimbursement General Inflation - - - - - - 6630 Auto Allowance General Inflation 1,138 1,180 1,210 1,240 1,270 1,300 6640 Earned Leave Accrual Labor Inflation - - - - - - 6651 Healthy Emp Awards General Inflation - - - - - - 6653 Final Vacation Pay Labor Inflation - - - - - - 6654 Final Sick Leave Pay Labor Inflation - - - - - - 6655 Disability General Inflation 12,829 13,340 13,670 14,010 14,360 14,720 6656 Unemployment General Inflation 11,079 11,520 11,810 12,110 12,410 12,720 6657 Worker's Compensation General Inflation 55,000 57,200 58,630 60,100 61,600 63,140 6720 PERS Labor - PERS (Normal Cost) 272,272 292,501 301,277 310,315 319,625 329,213 6723 PERS Unfunded Liab Exp Labor - PERS (Normal Cost) 232,471 375,598 383,215 390,950 398,805 406,778 6721 PERS (GASB 68 CONTRA ACCOUNT) One Time Expense - - - - - - 6722 Operation Expense One Time Expense - - - - - - 6730 Social Security One Time Expense - - - - - - 6740 Deferred Comp One Time Expense 137 - - - - - Other Personnel One Time Expense - - - - - - Total Personnel Costs Total Costs 3,322,088$ 3,608,180$ 3,726,452$ 3,847,915$ 3,972,679$ 4,101,841$

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Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Maintenance & Equipment
7111 Other Mach & Equip General Inflation -$ -$ -$ -$ -$ -$ 7115 Vehicle Rentals General Inflation - - - - - - 7119 Misc Rentals General Inflation 10,000 10,400 10,660 10,930 11,200 11,480 7120 Misc Leases General Inflation - - - - - - 7210 Office Equip Maint General Inflation - - - - - - 7211 Communication Equip Maintenance General Inflation 1,000 1,040 1,070 1,100 1,130 1,160 7215 Software Maintenance General Inflation 27,228 28,320 29,030 29,760 30,500 31,260 7216 Computer Maintenance General Inflation - - - - - - 7220 Vehicle Maintenance General Inflation 15,000 15,600 15,990 16,390 16,800 17,220 7221 Wash and Wax General Inflation 4,500 4,680 4,800 4,920 5,040 5,170 7222 Other Equip Maint General Inflation - - - - - - 7226 Pipeline Maintenance General Inflation 84,600 87,980 90,180 92,430 94,740 97,110 7230 Routine Building Maintenance General Inflation - - - - - - 7241 Asphalt Repairs General Inflation 10,000 10,400 10,660 10,930 11,200 11,480 7249 Maintenance, Repair and Rehab General Inflation 3,000 3,120 3,200 3,280 3,360 3,440 7400 Audit General Inflation - - - - - - 7410 Legal General Inflation - - - - - - 7435 Administrative General Inflation - - - - - - 7490 Misc Professional Services General Inflation 417,278 433,970 444,820 455,940 467,340 479,020 7500 Encina Services EWA Operating 6,000,000 6,180,000 6,365,400 6,556,360 6,753,050 6,955,640 Encina Services (Pension Payoff) No Annual Increase (281,750) (289,850) (298,183) (306,756) (315,575) 7550 Miscellaneous Outside Services General Inflation 450,520 468,540 480,250 492,260 504,570 517,180 7551 Bank Services General Inflation 43,213 44,940 46,060 47,210 48,390 49,600 7553 Comm Arts Support General Inflation - - - - - - 7554 Regulatory/Permitting Fees General Inflation 38,350 39,880 40,880 41,900 42,950 44,020 7556 Misc Services General Inflation - - - - - - 7558 Laundry and Uniform Mainteance General Inflation 5,000 5,200 5,330 5,460 5,600 5,740 7559 Electrical/SCADA Services General Inflation 33,443 34,780 35,650 36,540 37,450 38,390 7560 Water Sampling Services General Inflation - - - - - - 7562 FOG Inspection Services General Inflation 20,000 20,800 21,320 21,850 22,400 22,960 7563 Smartcover WIFI/Alarm Services General Inflation 50,000 52,000 53,300 54,630 56,000 57,400 7564 Landscaping Services General Inflation 130,280 135,490 138,880 142,350 145,910 149,560 7710 Ads and Publishing General Inflation 2,000 2,080 2,130 2,180 2,230 2,290 7711 Dues and Subscriptions General Inflation 10,500 10,920 11,190 11,470 11,760 12,050 7712 Books and Publications General Inflation 500 520 530 540 550 560 7713 Audio Visual Materials General Inflation - - - - - -

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Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
7715 Printing General Inflation 7,500 7,800 8,000 8,200 8,410 8,620 7720 Postage General Inflation 4,500 4,680 4,800 4,920 5,040 5,170 7725 Office Supplies General Inflation 5,000 5,200 5,330 5,460 5,600 5,740 7726 Office Furniture & Equipment General Inflation 5,000 5,200 5,330 5,460 5,600 5,740 7730 Computer Software General Inflation 10,000 10,400 10,660 10,930 11,200 11,480 7731 Misc. Computer Hardware General Inflation 4,000 4,160 4,260 4,370 4,480 4,590 7735 Promo Materials General Inflation 5,000 5,200 5,330 5,460 5,600 5,740 7745 Food Expense General Inflation - - - - - - 7750 Heat and Light Utilities Inflation 310,551 322,970 335,890 349,330 363,300 377,830 7751 Telephone & Communications Utilities Inflation 12,000 12,480 12,980 13,500 14,040 14,600 7752 Waste Dispoal Services Utilities Inflation 10,696 11,120 11,560 12,020 12,500 13,000 7753 Water Utilities Inflation 37,440 38,940 40,500 42,120 43,800 45,550 7801 Building Maintenance General Inflation - - - - - - 7810 Electrical Supplies General Inflation 500 520 530 540 550 560 7811 Janitorial Supplies General Inflation 300 310 320 330 340 350 7820 Parts-Vehicles General Inflation 500 520 530 540 550 560 7821 Parts-Equip General Inflation 209,255 217,620 223,060 228,640 234,360 240,220 7830 Rock and Mineral Products General Inflation 4,000 4,160 4,260 4,370 4,480 4,590 7831 Asphalt General Inflation 500 520 530 540 550 560 7850 Small Tools General Inflation 1,500 1,560 1,600 1,640 1,680 1,720 7851 Safety Equipment General Inflation 21,750 22,620 23,190 23,770 24,360 24,970 7852 Uniforms and Accessories General Inflation 5,000 5,200 5,330 5,460 5,600 5,740 7853 Meters/Fittings General Inflation - - - - - - 7857 Personal Protective Equipment General Inflation - - - - - - 7880 Gasoline and Oil Utilities Inflation 2,000 2,080 2,160 2,250 2,340 2,430 7883 Chemicals Chemicals Inflation 82,340 85,630 89,060 92,620 96,320 100,170 7886 Training Supplies General Inflation - - - - - - 7896 Medical Supplies - Disposable General Inflation - - - - - - 7899 Misc Supplies General Inflation 16,400 17,060 17,490 17,930 18,380 18,840 8110 Employee Training General Inflation 3,000 3,120 3,200 3,280 3,360 3,440 8120 Tuition Reimbursement General Inflation - - - - - - 8130 Training/Training Related Travel General Inflation 4,500 4,680 4,800 4,920 5,040 5,170 8520 Conference Travel General Inflation 3,171 3,300 3,380 3,460 3,550 3,640 8522 Misc. Meals/Miles General Inflation 3,211 3,340 3,420 3,510 3,600 3,690 8530 Bad Debt Exp - Other Inv/Bills General Inflation 20,000 20,800 21,320 21,850 22,400 22,960

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Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
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 25,000 8610 Settlements General Inflation - - - - - - 8700 Contingencies No Annual Increase - - - - - - 8809 Vehicle Direct Charges General Inflation 2,628 2,730 2,800 2,870 2,940 3,010 8810 Vehicle Maintenance (2) General Inflation 138,960 144,520 148,130 151,830 155,630 159,520 8811 Vehicle Replacement General Inflation 179,573 186,760 191,430 196,220 201,130 206,160 8830 General Liab General Inflation 441,210 458,860 470,330 482,090 494,140 506,490 8860 Information Technologies General Inflation 322,955 335,870 344,270 352,880 361,700 370,740 8890 Misc Interdepartmental Charges General Inflation 843,808 877,560 899,500 921,990 945,040 968,670 8891 Mis Chg Back General Inflation - - - - - - 8892 Utility Billing Chargeback General Inflation - - - - - - 8910 Fiscal Agent Fees General Inflation - - - - - - 8911 Arbitrage Costs General Inflation - - - - - - 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 ] (1,424,566) (1,455,673) (1,491,457) (1,528,179) (1,565,868) (1,604,625) Total Maintenance & Equipment Costs 13,975,595$ 14,067,207$ 14,383,443$ 14,707,878$ 15,040,746$ 15,382,190$ Capital Outlay
9005 Capital Outlay < $10k - New General Inflation -$ -$ -$ -$ -$ -$ 9006 Capital Outlay < $10k - Repl General Inflation - - - - - - 9010 Cap Outlay - Vehicles General Inflation 24,651 25,637 26,278 26,935 27,608 28,299 9020 Computer Equip > $10k - Repl General Inflation - - - - - - 9021 Office Equipment General Inflation - - - - - - 9022 Other Equipment General Inflation - - - - - - 9030 Office Furniture General Inflation - - - - - - 9050 Capitalized Assets One Time Expense - - - - - - Other Capital Outlay General Inflation - - - - - - Total Capital Outlay Costs 24,651$ 25,637$ 26,278$ 26,935$ 27,608$ 28,299$

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Wastewater Financial Model
Operation & Maintenance
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Other Financing Uses
9999 Replacement Funding One Time Expense 10,090,113$ -$ -$ -$ -$ -$ Transfer Out - Debt Service General Inflation - - - - - - Total Other Financing Uses Costs 10,090,113$ -$ -$ -$ -$ -$ TOTAL EXPENDITURES 27,412,447$ 17,701,025$ 18,136,173$ 18,582,727$ 19,041,034$ 19,512,330$ 7 8 9 10 11 12
ADDITIONAL O&M EXPENDITURES FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029  PW Director Salary - est. 10% Labor Inflation -$ -$ -$ -$ -$ -$  Addt'l O&M 2 General Inflation - - - - - -  One-time (EWA spill costs) One Time Expense - - - - - -  One-time (Optimization, etc.) One Time Expense - - - - - -  less: Added Revenue General Inflation - - - - - -  Less: Budget Analysis Amount ` One Time Expense (1,424,566) (1,455,673) (1,491,457) (1,528,179) (1,565,868) (1,604,625)  Added O&M General Inflation - - - - - - (1,424,566)$ (1,455,673)$ (1,491,457)$ (1,528,179)$ (1,565,868)$ (1,604,625)$ RATE REVENUES WITHOUT INCREASES - FOR REFERENCE FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 Commodity Usage Customer Demand Growth 23,556,818$ 25,907,310$ 25,961,657$ 26,059,185$ 26,315,997$ 26,585,563$ Sewer Pre-Treat General Inflation 12,000$ 12,480$ 12,792 13,112 13,440 13,776 Sewer Laterals General Inflation - - - - - - Other Charges for Services General Inflation - - - - - - 23,568,818$ 25,919,790$ 25,974,449$ 26,072,297$ 26,329,437$ 26,599,339$

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2025 WASTEWATER COST-OF-SERVICE STUDY
JANUARY 2025 / FINAL / CAROLLO

CITY OF CARLSBAD

APPENDIX B CAPITAL IMPROVEMENT PLAN
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CITY OF CARLSBAD
Wastewater Financial Model
Capital Improvement Plan
SEWER REPLACEMENT PROJECTS FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 Include Project ID Project Title
 34922 Vista Carlsbad Interceptor - Agua Hedionda LS and Forcemain (VC12-VC13) 104,000$ 75,000$ 75,000$ 75,000 -  35723 Orion Center (3,778,500) (204,985) -  38401 Sewer Lift Station Repairs and Upgrades 150,000 150,000 150,000 150,000 150,000 150,000  39502 Vista Carlsbad Interceptor - Reach VC3 -
 40153 Village and Barrio Traffic Circles 500,000 -  55011 Buena Interceptor Sewer Improvements 1,500,000 1,500,000 2,950,000 3,540,000 3,540,000  55031 Sewer System Rehabilitation and Replacement 2,500,000 1,850,000 1,850,000 1,850,000 1,850,000 2,670,000  55131 Sewer Condition Assessment 100,000 100,000 100,000 100,000 100,000  55201 Odor and Corrosion Prevention Program -
 55261 Foxes Landing Lift Station Wetwell and Pump Replacement -  55352 Vista Carlsbad Interceptor - Buena Vista Lift Station Improvements 85,700 35,000 50,000 100,000 100,000 120,000  55361 North Batiquitos Lift Station Forcemain Rehabilitation (125,000) -  55371 Buena Interceptor Sewer Access Road Improvements (650,000) (200,000) - 400,000 -  55421 SCADA Improvements 380,734 -
 55441 Buena Interceptor Sewer Realignment - East Segment 400,000 800,000 3,600,000 1,800,000 -  55451 Agua Hedionda Lift Station Biological Monitoring and Maintenance -  55471 North Batiquitos Access Road Improvement 25,500 -  55481 Sewer Line Capacity Improvements 200,000 694,000 1,057,000 -  55491 Vallecitos Interceptor Sewer Cleaning and CCTV -  55501 Villas Sewer Lift Station Replacement 75,000 -  55511 Vista Carlsbad Interceptor - Rehabilitation (VC1 and VC2) 90,000 70,000 120,000 -  55521 Cannon Road Lift Station Improvements 50,000 -  55541 Chinquapin Lift Station Improvements 920,000 -  55551 Vista/Carlsbad Interceptor - Point Repair Reaches (VC13 & VC14) 1,200,000 -  55561 Poinsettia Lift Station Rehabilitation 650,000 300,000 8,000,000 -  58011 Encina Capital Projects (EWPCF) 6,277,600 8,450,000 8,002,500 7,757,200 7,952,000 8,528,800  60544 Terramar Area Coastal Improvements -
 NEW Vallecitos Land Outfall Replacement - Segment B 200,000 200,000 200,000 5,000,000 5,000,000  Spend Down of Available Balance 28,077,196
 Adjust for Burn Rate on New Appropriations - - - - - -  Project Adjustments From Dashboard - - - - - - TOTAL SEWER REPLACEMENT PROJECTS 35,928,230$ 15,048,015$ 21,104,500$ 17,082,200$ 20,567,000$ 20,108,800$ 1 City of Carlsbad Amount (total - EWA) 6,598,015$ 13,102,000$ 9,325,000$ 12,615,000$ 11,580,000$

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CITY OF CARLSBAD
Wastewater Financial Model
Capital Improvement Plan
SUMMARY OF SEWER REPLACEMENT PROJECTS FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

UNESCALATED
R&R 35,928,230$ 15,048,015$ 21,104,500$ 17,082,200$ 20,567,000$ 20,108,800$ Expansion - - - - - - TOTAL: 35,928,230$ 15,048,015$ 21,104,500$ 17,082,200$ 20,567,000$ 20,108,800$

ESCALATED
R&R 35,928,230$ 15,348,975$ 23,713,016$ 19,865,335$ 24,755,026$ 25,050,646$ Expansion - - - - - - TOTAL: 35,928,230$ 15,348,975$ 23,713,016$ 19,865,335$ 24,755,026$ 25,050,646$ SEWER CONNECTION PROJECTS FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 Include Project ID Project Title
 34921 Vista Carlsbad Interceptor - Agua Hedionda LS and Forcemain (VC12-VC13) 220,000$  38861 Vista Carlsbad Interceptor - Lagoon Bridge Replacement (VC11B)  39491 Vista Carlsbad Interceptor - Reach VC14 To VC15  39501 Vista Carlsbad Interceptor - Reach VC3 30,000 387,000 405,000  55012 Buena Interceptor Sewer Improvements - 500,000  55041 Sewer Monitoring Program (Capacity) 44,000 30,800  55351 Vista Carlsbad Interceptor - Buena Vista Lift Station Improvements 67,000 67,000  55391 Faraday and El Camino Real Sewer Replacement - Orion to Palomar Airport Road 1,100,000  55401 Las Palmas Trunk Sewer (255,000) - 800,000 2,000,000 3,700,000  55461 Sewer Modeling (100,000)
 55531 El Fuerte Lift Station Pump Addition 200,000 450,000  NEW Vallecitos Land Outfall Replacement - Segment B 40,000 40,000 40,000 1,000,000 2,000,000  PA031 Loan Repay - Sewer Conn to Sewer Repl
 Spend Down of Available Balance 4,304,931
 Adjust for Burn Rate on New Appropriations - - - - - -  Project Adjustments From Dashboard - - - - - - TOTAL SEWER CONNECTION PROJECTS 5,499,931$ 1,421,000$ 1,312,000$ 2,107,000$ 4,700,000$ 2,030,800$ SUMMARY OF SEWER CONNECTION PROJECTS FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

UNESCALATED
R&R -$ -$ -$ -$ -$ -$ Expansion 5,499,931 1,421,000 1,312,000 2,107,000 4,700,000 2,030,800 TOTAL: 5,499,931$ 1,421,000$ 1,312,000$ 2,107,000$ 4,700,000$ 2,030,800$

ESCALATED
R&R -$ -$ -$ -$ -$ -$ Expansion 5,499,931 1,449,420 1,474,163 2,450,285 5,657,054 2,529,880 TOTAL: 5,499,931$ 1,449,420$ 1,474,163$ 2,450,285$ 5,657,054$ 2,529,880$

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2025 WASTEWATER COST-OF-SERVICE STUDY
JANUARY 2025 / FINAL / CAROLLO

CITY OF CARLSBAD

APPENDIX C REVENUE REQUIREMENT ANALYSIS
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CITY OF CARLSBAD
Wastewater Financial Model
Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

CASH FLOW TESTS

REVENUES
Rate Revenues 23,556,818$ 25,907,310$ 29,596,290$ 33,866,520$ 38,988,310$ 42,144,820$ Other Charges for Services 12,000 12,480 12,792 13,112 13,440 13,776 Fines and Forfeitures 120,000 120,730 120,980 121,430 122,630 123,890 Income from Property & Investments 744,011 503,337 204,758 177,128 176,089 156,499 Interdepartmental 120,000 124,800 127,920 131,120 134,400 137,760 Other Revenues 67,000 69,680 71,422 73,205 75,040 76,916 TOTAL REVENUES 24,619,830$ 26,738,337$ 30,134,162$ 34,382,515$ 39,509,908$ 42,653,661$

EXPENDITURES
Ongoing Operating Expenses
Personnel 3,322,088$ 3,608,180$ 3,726,452$ 3,847,915$ 3,972,679$ 4,101,841$ Encina Operations 6,000,000 6,180,000 6,365,400 6,556,360 6,753,050 6,955,640 Maintenance & Equipment 4,100,161 3,981,400 4,086,360 4,194,187 4,304,974 4,418,775 Capital Outlay 24,651 25,637 26,278 26,935 27,608 28,299 Replacement Funding 10,090,113 - - - - - Transfer Out - Debt Service - - - - - - Other Operating Expenses
One-time Funding (Budget Analysis Amount) (1,424,566) (1,455,673) (1,491,457) (1,528,179) (1,565,868) (1,604,625) Rate Funded Capital 2,797,106 4,594,379 14,868,096 12,615,227 21,130,721 21,277,733 Debt Service - - - 293,749 293,749 293,749 Total Operating Expenditures 24,909,552$ 16,933,923$ 27,581,129$ 26,006,193$ 34,916,913$ 35,471,412$ Policy Expenditures
Replacement Funding 5,300,000$ 5,361,480$ 5,423,140$ 5,485,510$ 5,548,590$ 5,612,400$ Transfers to Capital Fund - - - - - - Additions to Meet Minimum Fund Balances - - - - - - Total Policy Expenditures 5,300,000$ 5,361,480$ 5,423,140$ 5,485,510$ 5,548,590$ 5,612,400$

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2024 2025 2026 2027 2028 2029

CITY OF CARLSBAD
Wastewater Financial Model
Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
POLICY OVERRIDES (input in Dashboard)
Replacement Funding No Override No Override No Override No Override No Override No Override Transfers to Capital Fund -$ -$ -$ -$ -$ -$ Additions to Meet Minimum Fund Balances (*) -$ -$ -$ -$ -$ -$ TOTAL EXPENDITURES 30,209,552$ 22,295,403$ 33,004,269$ 31,491,703$ 40,465,503$ 41,083,812$ CASH FLOW SURPLUS (DEFICIT) (5,589,723)$ 4,442,933$ (2,870,107)$ 2,890,812$ (955,595)$ 1,569,849$

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CITY OF CARLSBAD
Wastewater Financial Model
Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

DEBT COVERAGE TEST

1.25 x Bond Coverage
Calculation of Net Revenues
Operating Revenues
User Charges 23,556,818$ 25,907,310$ 29,596,290$ 33,866,520$ 38,988,310$ 42,144,820$ Other/Misc Revenues - Excludes Interest Earnings 319,000 327,690 333,114 338,867 345,510 352,342 Yes Connection Fees 471,438$ 400,974$ 328,896$ 113,883$ 204,368$ 538,144$ Yes Grants - - - - - - Modeled Interest Earnings
Yes Operating Funds 265,571$ 211,226$ 94,672$ 90,448$ 99,795$ 119,693$ Yes Capital Funds 478,440 292,111 110,086 86,680 76,294 36,806 Total Revenues Included in Test 25,091,268$ 27,139,311$ 30,463,059$ 34,496,398$ 39,714,276$ 43,191,804$ Less: Operating Expenses (13,422,249)$ (13,769,580)$ (14,178,212)$ (14,598,462)$ (15,030,703)$ (15,476,256)$ Net Operating Revenues Avaiable for Debt Service 11,669,019$ 13,369,731$ 16,284,847$ 19,897,936$ 24,683,573$ 27,715,548$ Debt Service -$ -$ -$ 293,749$ 293,749$ 293,749$ Coverage - - - 367,186 367,186 367,186 Subtotal: Debt Service and Coverage -$ -$ -$ 660,935$ 660,935$ 660,935$ BOND COVERAGE SURPLUS (DEFICIT) 11,669,019$ 13,369,731$ 16,284,847$ 19,237,002$ 24,022,638$ 27,054,614$

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CITY OF CARLSBAD
Wastewater Financial Model
Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

REVENUE REQUIREMENT
Revenue Requirement (5,589,723)$ 4,442,933$ (2,870,107)$ 2,890,812$ (955,595)$ 1,569,849$ Cash Flow Driven Surplus Cash Flow Driven Surplus Cash Flow Driven Surplus Month of implementation January January January January January January Calculated Increase (%) 47.46% 0.00% 19.40% 0.00% 4.90% 0.00% Rate Increase Override (INPUT in Dashboard) 20.00% 14.00% 14.00% 14.00% 7.00% 7.00% Rate Increase (%) 20.00% 14.00% 14.00% 14.00% 7.00% 7.00% Cumulative Rate Increase (%) 86.0% 115.2% 145.3% 179.6% 199.2% 220.2% SFR Rate $51.74 $59.85 $68.22 $77.77 $83.22 $89.04

CASH FLOW
Revenues Before Rate Increase 24,619,830$ 26,738,337$ 30,134,162$ 34,382,515$ 39,509,908$ 42,653,661$ Revenues From Rate Increase - 3,627,023 4,143,481 4,741,313 2,729,182 2,950,137 Less: Rate Increase Delay - (1,813,512) (2,071,740) (2,370,656) (1,364,591) (1,475,069) Less: Adjustment for Implementation Delay (1,813,512)
Less: Expenditures (30,209,552) (22,295,403) (33,004,269) (31,491,703) (40,465,503) (41,083,812) Cash Flow (5,589,723)$ 4,442,933$ (798,366)$ 5,261,469$ 408,996$ 3,044,918$ RATE REVENUE REQUIREMENT 23,556,818$ 29,534,333$ 33,739,771$ 38,607,833$ 41,717,492$ 45,094,957$ Total Ending Balance 10,987,236$ 9,488,607$ 8,224,194$ 9,384,662$ 6,265,258$ 9,157,926$ 161 days 205 days 109 days 132 days 65 days 94 days
Operating Fund
Beginning Balance 16,576,959$ 4,545,674$ 4,921,560$ 4,123,194$ 5,856,262$ 6,113,008$ Cash Flow (5,589,723) 4,442,933 (798,366) 5,261,469 408,996 3,044,918 Transfers from Operating to Capital Fund (6,441,562) (4,067,047) - (3,528,400) (152,249) (2,764,885) Ending Operating Fund Balance 4,545,674$ 4,921,560$ 4,123,194$ 5,856,262$ 6,113,008$ 6,393,041$

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CITY OF CARLSBAD
Wastewater Financial Model
Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Coverage Tests - Post Rate Increase
Calculation of Net Revenues
Operating Revenues
User Charges 23,556,818$ 25,907,310$ 31,668,030$ 36,237,176$ 40,352,901$ 43,619,889$ Other/Misc Revenues 319,000 327,690 333,114 338,867 345,510 352,342 Change selection above
Yes Connection Fees 471,438$ 400,974$ 328,896$ 113,883$ 204,368$ 538,144$ Yes Grants - - - - - -
Modeled Interest Earnings
Yes Operating Funds 265,571$ 211,226$ 94,672$ 90,448$ 99,795$ 119,693$ Yes Capital Funds 478,440 292,111 110,086 86,680 76,294 36,806 Total Revenues Included in Test 25,091,268$ 27,139,311$ 32,534,799$ 36,867,054$ 41,078,867$ 44,666,873$ LESS: Operating Expenses (13,422,249)$ (13,769,580)$ (14,178,212)$ (14,598,462)$ (15,030,703)$ (15,476,256)$ Net Operating Revenues Available for Debt Service 11,669,019$ 13,369,731$ 18,356,587$ 22,268,593$ 26,048,164$ 29,190,617$ Existing Debt Test - Includes debt service only for debt that has been issued and has been input into the model.

Net Operating Revenues Available for Debt Service 11,669,019$ 13,369,731$ 18,356,587$ 22,268,593$ 26,048,164$ 29,190,617$ LESS: Existing Debt Service - - - (293,749) (293,749) (293,749) Revenues Available for Coverage 11,669,019$ 13,369,731$ 18,356,587$ 21,974,844$ 25,754,415$ 28,896,868$ Existing Debt Service Coverage Ratio No Existing Debt No Existing Debt No Existing Debt 75.81 x 88.67 x 99.37 x Total Debt Test - Includes existing and projected debt.

Net Operating Revenues Available for Debt Service 11,669,019$ 13,369,731$ 18,356,587$ 22,268,593$ 26,048,164$ 29,190,617$ Less: Existing Debt Service - - - (293,749) (293,749) (293,749) Less: Projected Debt Service - - - - - -
Revenues Available for Coverage 11,669,019$ 13,369,731$ 18,356,587$ 21,974,844$ 25,754,415$ 28,896,868$ Total Debt Service Coverage Ratio No Debt No Debt No Debt 75.81 x 88.67 x 99.37 x

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2025 WASTEWATER COST-OF-SERVICE STUDY
JANUARY 2025 / FINAL / CAROLLO

CITY OF CARLSBAD

APPENDIX D FUNCTIONAL ALLOCATION
Feb. 11, 2025
Item #8 Page 74 of 265

CITY OF CARLSABAD
Wastewater Financial Model
Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% 0.0% See "Op Exp for Encina Services" tab for breakdown 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% 3.3% 3.3% 60.2% 33.1%
Vehicles 0.0% 5.0% 5.0% 90.0% 0.0%
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 13.6% 12.6% 13.6% 60.2% 0.0%
Weighted Average O&M 26.6% 20.6% 22.3% 30.5% 0.0%
Weighed Average Revenue Requirements 20.8% 17.0% 18.4% 43.8% 0.0%

PLANT IN SERVICE RCNLD TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES IM - IMPROVEMENTS 7,187,260$ 100.0% 0% JV - JOINT VENTURE 52,584,214 40.3% 28.6% 31.1% 0% LD - LAND 2,629,102 100% ME - MACHINERY & EQUIPMENT 806,073 100% PP - PIPES & PUMPING 70,927,459 5.0% 5.0% 90.0% 0% Plant-In-Service Sub Total 134,134,107$ 21,182,642$ 18,588,265$ 19,906,053$ 71,021,973$ 3,435,175$ Reallocation of "As All Others" 556,746$ 488,557$ 523,193$ 1,866,678$ (3,435,175)$ Total Allocation 134,134,107$ 21,739,387$ 19,076,823$ 20,429,246$ 72,888,651$ -$ Percentage Allocation 100% 16.2% 14.2% 15.2% 54.3% 0.0%

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CITY OF CARLSABAD
Wastewater Financial Model
Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES FYE 2025 ALLOCATION TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES

EXPENDITURES
Personnel
Reg Salaries 2,215,920$ Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Incentive Pay - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Hazard Pay 51,570 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% IOD Worker's Comp - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Overtime Salaries 67,600 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Standby Pay 26,490 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Parttimes Salaries - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Intern Salaries 3,790 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Temporary Help - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Health Insurance 455,810 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Life Insurance 1,500 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% AD&D - City Paid 740 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Vision Insurance - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Medicare 33,420 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Cell Phone Reimbursement - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Auto Allowance 1,180 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Earned Leave Accrual - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Healthy Emp Awards - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Final Vacation Pay - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Final Sick Leave Pay - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Disability 13,340 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Unemployment 11,520 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Worker's Compensation 57,200 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% PERS 292,501 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% PERS Unfunded Liab Exp 375,598 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% PERS (GASB 68 CONTRA ACCOUNT) - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Operation Expense - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Social Security - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Deferred Comp - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Other Personnel - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% 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 10,400 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 1,040 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Software Maintenance 28,320 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 15,600 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Wash and Wax 4,680 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%

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CITY OF CARLSABAD
Wastewater Financial Model
Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES Pipeline Maintenance 87,980 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 10,400 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Maintenance, Repair and Rehab 3,120 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 433,970 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Encina Services 6,180,000 Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% 0.0% Encina Services (Pension Payoff) (281,750) Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% 0.0% Miscellaneous Outside Services 468,540 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Bank Services 44,940 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 39,880 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 5,200 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Electrical/SCADA Services 34,780 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 20,800 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Smartcover WIFI/Alarm Services 52,000 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Landscaping Services 135,490 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Ads and Publishing 2,080 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Dues and Subscriptions 10,920 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Books and Publications 520 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 7,800 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Postage 4,680 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Office Supplies 5,200 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Office Furniture & Equipment 5,200 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Computer Software 10,400 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Misc. Computer Hardware 4,160 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Promo Materials 5,200 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 322,970 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Telephone & Communications 12,480 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Waste Dispoal Services 11,120 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Water 38,940 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 520 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Janitorial Supplies 310 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Parts-Vehicles 520 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Parts-Equip 217,620 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Rock and Mineral Products 4,160 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Asphalt 520 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Small Tools 1,560 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Safety Equipment 22,620 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Uniforms and Accessories 5,200 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 2,080 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Chemicals 85,630 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 17,060 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Employee Training 3,120 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%

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CITY OF CARLSABAD
Wastewater Financial Model
Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES Training/Training Related Travel 4,680 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Conference Travel 3,300 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Misc. Meals/Miles 3,340 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Bad Debt Exp - Other Inv/Bills 20,800 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 2,730 Vehicles 0.0% 5.0% 5.0% 90.0% 0.0% Vehicle Maintenance (2) 144,520 Vehicles 0.0% 5.0% 5.0% 90.0% 0.0% Vehicle Replacement 186,760 Vehicles 0.0% 5.0% 5.0% 90.0% 0.0% General Liab 458,860 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Information Technologies 335,870 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Misc Interdepartmental Charges 877,560 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 (1,455,673) [Non-Encina O&M] 0.0% 2.3% 2.3% 42.3% 53.1% Capital Outlay
Capital Outlay < $10k - New -$ Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Capital Outlay < $10k - Repl - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Cap Outlay - Vehicles 25,637 Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Computer Equip > $10k - Repl - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Office Equipment - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Other Equipment - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Office Furniture - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Capitalized Assets - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Other Capital Outlay - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Operating Expenditures Sub Total 12,339,545$ 2,379,502$ 1,841,048$ 1,989,113$ 2,726,319$ 3,403,562$ Reallocation of "As All Others" 906,311$ 701,224$ 757,619$ 1,038,408$ (3,403,562)$ Total Allocation 12,339,545$ 3,285,814$ 2,542,272$ 2,746,732$ 3,764,727$ -$ Percentage Allocation 100.0% 26.6% 20.6% 22.3% 30.5%

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Item #8 Page 78 of 265

CITY OF CARLSABAD
Wastewater Financial Model
Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES RATE REVENUE REQUIREMENT FYE 2025 ALLOCATION TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES OPERATING EXPENSES (from above) 12,339,545$ 26.6% 20.6% 22.3% 30.5% 0.0%

NON-OPERATING EXPENSES
Replacement Funding (Depreciation) 5,361,480$ Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Rate Funded Capital 4,594,379 Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Debt Service - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Transfers to Capital Fund - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Replacement Funding - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Transfer Out - Debt Service - As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Adj. to Reflect Full Year Increase 3,627,023.3 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)4,442,933$ As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Other Charges for Services (12,480) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Fines and Forfeitures (120,730) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Income from Property & Investments (503,337) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Interdepartmental (124,800) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Other Revenues (69,680) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Total Rate Revenues to be Collected 29,534,333$ 4,642,700$ 3,796,267$ 4,098,566$ 9,757,870$ 7,238,930$ Reallocation of "As All Others" 1,507,404$ 1,232,582$ 1,330,733$ 3,168,211$ (7,238,930)$ Total Allocation 29,534,333$ 6,150,104$ 5,028,848$ 5,429,300$ 12,926,081$ -$ Percentage Allocation 100% 20.8% 17.0% 18.4% 43.8% 0.0% Check
Rate Revenues from Revenue Requirement 29,534,333$
Rate Revenues from Functional Allocation 29,534,333$
Difference -$

UNIT COST CALCULATIONS TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS ccfs lbs lbs lbs
Amount Allocable to Constituent 6,150,104$ 5,028,848$ 5,429,300$ 12,926,081$ Total Units 3,138,696 7,085,763 8,397,992 3,138,696
PER UNIT COSTS 1.959$ 0.710$ 0.646$ 4.118$

Feb. 11, 2025
Item #8 Page 79 of 265

CITY OF CARLSABAD
Wastewater Financial Model
Staff Allocation

TITLE BARGAINING
UNIT ORG. KEY FTE

ALLOCATION RANGE MID-POINT
FY 2023 MID-PT

SALARY/WAGE
COST
CMWD

VEHICLE USE UNIFORM TREATMENT

FLOW BOD TSS COLLECTION

FLOW AS ALL OTHERS TOTAL
**Utility Locator** CCEA 5116310 0.3 66 76,211 22,863 100.0% 0.0% Accounting Technician CCEA 5116310 0.1 47 63,128 6,313 100.0% 0.0% Administrative Secretary CCEA 5116310 0.3 43 60,611 18,183 100.0% 0.0% Asset Management Program Specialist CCEA 5116310 0.5 84 91,208 45,604 100.0% 0.0% Associate Engineer CCEA 5116310 0.35 98 104,811 36,684 100.0% 0.0% BUYER/CONTRACT ADMINISTRATOR CCEA 5116310 0.2 63 74,006 14,801 100.0% 0.0% Engineering Technician II CCEA 5116310 0.35 60 71,802 25,131 5.0% 5.0% 90.0% 0.0% 100.0% GIS Associate Analyst CCEA 5116310 0.35 70 79,331 27,766 100.0% 0.0% Management Analyst MGT 5116310 0.2 89,108 17,822 100.0% 0.0% Sanitation Systems Operator II CCEA 5116310 1 89 95,846 95,846 y y 5.0% 5.0% 90.0% 0.0% 100.0% Sanitation Systems Operator II CCEA 5116310 1 89 95,846 95,846 y y 5.0% 5.0% 90.0% 0.0% 100.0% Sanitation Systems Operator III CCEA 5116310 1 103 110,178 110,178 y y 5.0% 5.0% 90.0% 0.0% 100.0% Sanitation Systems Operator II CCEA 5116310 1 89 95,846 95,846 y y 5.0% 5.0% 90.0% 0.0% 100.0% SENIOR SCADA & IMPLEMENTATION TECH.103 SENIOR STORM DRAIN MAINT. WORKERMGT 5116310 0.45 72 80,891 36,401 100.0% 0.0% SCADA & IMPLEMENTATION Technician CCEA 5116310 1 98 104,811 104,811 100.0% 0.0% Secretary CCEA 5116310 0.1 35 56,014 5,601 100.0% 0.0% Secretary CCEA 5116310 0.5 35 56,014 28,007 100.0% 0.0% Senior Engineer MGT 5116310 0.3 127,254 38,176 5.0% 5.0% 90.0% 0.0% 100.0% Senior Management Analyst MGT 5116310 0.25 108,560 27,140 100.0% 0.0% Senior Office Specialist CCEA 5116310 0.3 27 51,709 15,513 100.0% 0.0% ASSISTANT ENGINEER CCEA 5116310 0.35 82 89,398 31,289 5.0% 5.0% 90.0% 0.0% 100.0% Utilities Director MGT 5116310 0.35 193,465 67,713 100.0% 0.0% Utilities Engineering Manager MGT 5116310 0.35 166,392 58,237 5.0% 5.0% 90.0% 0.0% 100.0% Utilities Maintenance Planner MGT 5116310 0.3 89,108 26,732 5.0% 5.0% 90.0% 0.0% 100.0% Utilities Manager MGT 5116310 0.4 166,392 66,557 5.0% 5.0% 90.0% 0.0% 100.0% Utilities Senior Engineer MGT 5116310 0.35 127,254 44,539 5.0% 5.0% 90.0% 0.0% 100.0% Utilities Senior Engineer MGT 5116310 0.35 127,254 44,539 5.0% 5.0% 90.0% 0.0% 100.0% Utilities Superintendent MGT 5116310 1 127,254 127,254 100.0% 0.0% Utilities Technical Services Manager MGT 5116310 0.5 142,921 71,461 100.0% 0.0% Utility Worker II CCEA 5116310 1 66 76,211 76,211 y y 5.0% 5.0% 90.0% 0.0% 100.0% Warehouse Technician CCEA 5116310 0.3 43 60,611 18,183 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker I - UF CCEA 5116310 1 54 67,683 67,683 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker II CCEA 5116310 1 66 76,211 76,211 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker II CCEA 5116310 1 66 76,211 76,211 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker II CCEA 5116310 1 66 76,211 76,211 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker II CCEA 5116310 1 66 76,211 76,211 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker II CCEA 5116310 1 66 76,211 76,211 y y 5.0% 5.0% 90.0% 0.0% 100.0% Wastewater Utility Worker III CCEA 5116310 1 77 85,051 85,051 y y 5.0% 5.0% 90.0% 0.0% 100.0% All Staff Allocation 21.8 3,593,239$ 2,035,039$ -$ 68,055$ 68,055$ 1,224,992$ 673,937$ 2,035,039$ Resulting Allocation 100% 0.0% 3.3% 3.3% 60.2% 33.1% 100% Staff with CMWD Vehicle Use Vehicle Use Units (Assumed equal to allocated FTEs) - 0.62 0.62 11.07 - 12.30 Vehicle Costs Allocation 0.0% 5.0% 5.0% 90.0% 0.0% 100% FTEs with Uniforms Uniform Units (Assumed equal to allocated FTEs) - 0.62 0.62 11.07 - 12.30 Uniforms Cost Allocation 0.0% 5.0% 5.0% 90.0% 0.0% 100% Note: Total salary cost indicated here is based on assuming midpoint of range for each FTE and position as a reasonable means of allocating costs. This number is not a direct match to actual or budgeted costs which reflect each specific staff member's assigned compensation level.

Feb. 11, 2025
Item #8 Page 80 of 265
2025 WASTEWATER COST-OF-SERVICE STUDY
JANUARY 2025 / FINAL / CAROLLO

CITY OF CARLSBAD

APPENDIX E RATE CALCULATIONS
Feb. 11, 2025
Item #8 Page 81 of 265

CITY OF CARLSABAD
Wastewater Financial Model
Customer Allocation & Rates
FYE 2025 PROPOSED
Customer Data Billed Units Summary
FYE 2025 Units
ESTIMATED SEWER FLOWS (HCF) 3,138,696
ESTIMATED BOD DISCHARGE (lbs) 7,085,763
ESTIMATED TSS DISCHARGE (lbs) 8,397,992
CUSTOMER ACCOUNTS 24,200
Allocated Revenue Requirements TREATMENT FLOW BOD TSS COLLECTION FLOW TOTAL Rate Revenue Required 6,150,104$ 5,028,848$ 5,429,300$ 12,926,081$ 29,534,333$ Unit Basis for Rate Design ESTIMATED SEWER

FLOWS (HCF)

ESTIMATED BOD
DISCHARGE (lbs)

ESTIMATED TSS
DISCHARGE (lbs)

ESTIMATED SEWER

FLOWS (HCF)
2025 Units 3,138,696 7,085,763 8,397,992 3,138,696 2025 Unit Cost $1.959 $0.710 $0.646 $4.118
per HCF per lb per lb per HCF
Rate Class Unit Costs - Per HCF Discharged BOD (mg/l) BOD ($/HCF) TSS (mg/l) TSS ($/HCF) Flow ($/HCF) Total $ Per HCF Discharged GROUP I - SFR & Minimum Charges 301 $1.34 379 $1.53 $6.08 $8.94 GROUP I - MFR/Mobile Homes 301 $1.34 379 $1.53 $6.08 $8.94 GROUP II - Commercial 2 196 $0.87 229 $0.92 $6.08 $7.87 GROUP III - Commercial 3 495 $2.19 529 $2.13 $6.08 $10.40 GROUP IV - Commercial 4 1236 $5.47 1290 $5.20 $6.08 $16.76 Other 0 $0.00 0 $0.00 $6.08 $6.08
Brewery - B2 1906 $8.45 1537 $6.20 $6.08 $20.73
Brewery - B3 1236 $5.47 1290 $5.20 $6.08 $16.76
Brewery - B4 2426 $10.75 2067 $8.34 $6.08 $25.17
GROUP VI - Large Volume (no accounts) 121 $0.53 152 $0.61 $6.08 $7.22 Industrial Pretreatment Class III 450 $1.99 905 $3.65 $6.08 $11.72 Institutional 196 $0.87 190 $0.77 $6.08 $7.71
GROUP V - Elementary Schools 196 $0.87 190 $0.77 $6.08 $7.71 GROUP V - Junior High Schools 196 $0.87 190 $0.77 $6.08 $7.71 GROUP V - High Schools 196 $0.87 190 $0.77 $6.08 $7.71
GROUP V - Boarding Schools 196 $0.87 190 $0.77 $6.08 $7.71 ALLOCATION YEAR:

Feb. 11, 2025
Item #8 Page 82 of 265

CITY OF CARLSABAD
Wastewater Financial Model
Customer Allocation & Rates
GROUP I - SFR & Minimum Charges $8.94 1.0 6.69 $59.84 $59.85 SFR with ADU $8.94 1.5 10.04 $89.76 $89.77
GROUP I - MFR/Mobile Homes $8.94 76.96% $6.88 $6.89
GROUP II - Commercial 2 $7.87 76.96% $6.06 $6.06
GROUP III - Commercial 3 $10.40 76.96% $8.01 $8.01
GROUP IV - Commercial 4 $16.76 76.96% $12.90 $12.90
Other $6.08 0.00% $0.00 $0.00
Brewery - B2 $20.73 70.55% $14.62 $14.63
Brewery - B3 $16.76 76.96% $12.90 $12.90
Brewery - B4 $25.17 70.55% $17.76 $17.76
GROUP VI - Large Volume (no accounts) $7.22 76.96% $5.56 $5.56 Industrial Pretreatment Class III $11.72 76.96% $9.02 $9.03 Institutional $7.71 76.96% $5.93 $5.94
Institutional Rates Total $ Per HCF
Discharged
Assumed Flow per
Student (gpd)
Adjustment for
Student Days
Effective Flow per
Student (HCF per
Month)
Calculated Monthly Rate
(per Student)
No Rounding
Proposed Monthly Rate
(per Student) Rounded
GROUP V - Elementary Schools $7.71 6.84 55% 0.15 $1.18 $1.18 GROUP V - Junior High Schools $7.71 10.26 55% 0.23 $1.76 $1.77 GROUP V - High Schools $7.71 13.68 55% 0.30 $2.35 $2.36 GROUP V - Boarding Schools $7.71 38.18 100% 1.55 $11.97 $11.98 Calculated Monthly Rate
(per Account or Dwelling
Unit)
No Rounding
Calculated Monthly Rate (per HCF of
Water Used) Rounded
Proposed Monthly Rate (per Account
or Dwelling Unit)
Rounded
GROUP I - SFR & Minimum Charges Estimated Monthly
Discharge (HCF)
Total $ Per HCF
Discharged EDU Flow Factor
Discharge Based Rates Total $ Per HCF
Discharged
Return to Sewer
Factor
Calculated Monthly Rate
(per Account or Dwelling
Unit)
No Rounding
Feb. 11, 2025
Item #8 Page 83 of 265
2025 WASTEWATER COST-OF-SERVICE STUDY
JANUARY 2025 / FINAL / CAROLLO

CITY OF CARLSBAD

APPENDIX F PROJECTED FLOW AND LOADS
Feb. 11, 2025
Item #8 Page 84 of 265

CITY OF CARLSBAD
Wastewater Financial Model
Customer Data Projection
NOTE FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

ESTIMATED SEWER FLOWS (HCF)
GROUP I - SFR & Minimum Charges Calculated Sewer Flows SFR and Duplex w/ Mass Balance Adjustment1,484,378 1,479,614 1,490,691 1,499,777 1,502,923 1,508,569 1,523,436 1,539,042 Additional Billed Due to Minimum Charges 305,534 304,553 306,833 308,704 309,351 310,513 313,573 316,785 GROUP I - SFR & Minimum Charges Adjusted to Reflect Minimum Charges 1,789,912 1,784,167 1,797,525 1,808,481 1,812,275 1,819,083 1,837,010 1,855,827 GROUP I - MFR/Mobile Homes 497,493 495,896 499,609 502,654 503,708 505,601 510,583 515,813 COMMERCIAL, C1 Included in Group I 0 0 0 0 0 0 0 0
GROUP II - Commercial 2 294,764 293,818 296,017 297,822 298,446 299,567 302,520 305,619 GROUP III - Commercial 3 311,881 310,880 313,208 315,117 315,778 316,964 320,088 323,366 GROUP IV - Commercial 4 153,857 153,363 154,511 155,453 155,779 156,364 157,905 159,523 Other 0 0 0 0 0 0 0 0
Brewery - B2 3,376 3,366 3,391 3,411 3,419 3,431 3,465 3,501 Brewery - B3 7,649 7,625 7,682 7,728 7,745 7,774 7,850 7,931 Brewery - B4 2,178 2,172 2,188 2,201 2,206 2,214 2,236 2,259 GROUP VI - Large Volume (no accounts) 0 0 0 0 0 0 0 0
Industrial Pretreatment Class III 6,960 6,938 6,990 7,033 7,047 7,074 7,143 7,217 Institutional 523 522 526 529 530 532 537 543
GROUP V - Elementary Schools 12,630 12,590 12,684 12,761 12,788 12,836 12,962 13,095 GROUP V - Junior High Schools 7,386 7,362 7,417 7,463 7,478 7,506 7,580 7,658 GROUP V - High Schools 14,505 14,458 14,567 14,655 14,686 14,741 14,887 15,039 GROUP V - Boarding Schools 3,354 3,343 3,368 3,388 3,395 3,408 3,442 3,477 Total Estimated Sewer Flows (HCF) 3,106,470 3,096,498 3,119,681 3,138,696 3,145,280 3,157,096 3,188,209 3,220,867 ESTIMATED BOD DISCHARGE (lbs)
GROUP I - SFR & Minimum Charges 2,792,433 2,783,470 2,804,309 2,821,402 2,827,320 2,837,942 2,865,909 2,895,266 Additional Billed Due to Minimum Charges 574,775 572,930 577,219 580,737 581,956 584,142 589,899 595,941 GROUP I - SFR & Minimum Charges Adjusted to Reflect Minimum Charges 3,367,208 3,356,400 3,381,528 3,402,139 3,409,276 3,422,083 3,455,808 3,491,207 GROUP I - MFR/Mobile Homes 935,891 932,887 939,871 945,600 947,583 951,143 960,516 970,355 COMMERCIAL, C1 Included in Group I 0 0 0 0 0 0 0 0
GROUP II - Commercial 2 361,358 360,198 362,895 365,107 365,873 367,247 370,866 374,665 GROUP III - Commercial 3 963,191 960,099 967,287 973,183 975,224 978,888 988,535 998,661 GROUP IV - Commercial 4 1,186,695 1,182,886 1,191,742 1,199,006 1,201,521 1,206,035 1,217,920 1,230,396 Other 0 0 0 0 0 0 0 0
Brewery - B2 40,180 40,051 40,351 40,597 40,682 40,835 41,237 41,659 Brewery - B3 58,997 58,808 59,248 59,609 59,735 59,959 60,550 61,170 Brewery - B4 32,991 32,885 33,131 33,333 33,403 33,528 33,859 34,206 GROUP VI - Large Volume (no accounts) 0 0 0 0 0 0 0 0
Industrial Pretreatment Class III 19,546 19,483 19,629 19,749 19,790 19,865 20,061 20,266 Institutional 640 638 643 647 648 651 657 664
GROUP V - Elementary Schools 15,444 15,394 15,510 15,604 15,637 15,696 15,850 16,013 GROUP V - Junior High Schools 9,032 9,003 9,070 9,125 9,144 9,179 9,269 9,364 GROUP V - High Schools 17,737 17,680 17,812 17,921 17,958 18,026 18,203 18,390 GROUP V - Boarding Schools 4,101 4,088 4,118 4,143 4,152 4,168 4,209 4,252 Total BOD Discharge (lbs) 7,013,010 6,990,499 7,042,834 7,085,763 7,100,627 7,127,301 7,197,540 7,271,268 Feb. 11, 2025
Item #8 Page 85 of 265

CITY OF CARLSBAD
Wastewater Financial Model
Customer Data Projection
NOTE FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029 ESTIMATED TSS DISCHARGE (lbs)
GROUP I - SFR & Minimum Charges 3,514,580 3,503,299 3,529,527 3,551,041 3,558,490 3,571,858 3,607,058 3,644,007 Additional Billed Due to Minimum Charges 723,416 721,094 726,493 730,921 732,454 735,206 742,451 750,057 GROUP I - SFR & Minimum Charges Adjusted to Reflect Minimum Charges 4,237,997 4,224,393 4,256,020 4,281,962 4,290,944 4,307,064 4,349,510 4,394,063 GROUP I - MFR/Mobile Homes 1,177,920 1,174,139 1,182,929 1,190,140 1,192,636 1,197,117 1,208,914 1,221,298 COMMERCIAL, C1 Included in Group I 0 0 0 0 0 0 0 0
GROUP II - Commercial 2 420,688 419,338 422,477 425,052 425,944 427,544 431,757 436,180 GROUP III - Commercial 3 1,029,720 1,026,415 1,034,099 1,040,402 1,042,585 1,046,501 1,056,815 1,067,640 GROUP IV - Commercial 4 1,238,583 1,234,607 1,243,850 1,251,432 1,254,057 1,258,768 1,271,173 1,284,194 Other 0 0 0 0 0 0 0 0
Brewery - B2 32,388 32,284 32,526 32,724 32,793 32,916 33,240 33,581 Brewery - B3 61,577 61,379 61,839 62,216 62,346 62,581 63,197 63,845 Brewery - B4 28,111 28,021 28,231 28,403 28,463 28,570 28,851 29,147 GROUP VI - Large Volume (no accounts) 0 0 0 0 0 0 0 0
Industrial Pretreatment Class III 39,324 39,198 39,492 39,732 39,816 39,965 40,359 40,772 Institutional 620 618 622 626 627 630 636 643
GROUP V - Elementary Schools 14,952 14,904 15,016 15,107 15,139 15,196 15,346 15,503 GROUP V - Junior High Schools 8,744 8,716 8,781 8,835 8,853 8,886 8,974 9,066 GROUP V - High Schools 17,172 17,117 17,245 17,350 17,386 17,452 17,624 17,804 GROUP V - Boarding Schools 3,970 3,957 3,987 4,011 4,020 4,035 4,075 4,116 Total TSS Discharge (lbs) 8,311,766 8,285,087 8,347,114 8,397,992 8,415,609 8,447,224 8,530,471 8,617,852

CUSTOMER ACCOUNTS
GROUP I - SFR & Minimum Charges 21,620 21,550 21,712 21,844 21,890 21,972 22,189 22,416 GROUP I - MFR/Mobile Homes 776 774 779 784 786 789 796 805 COMMERCIAL, C1 Included in Group I 0 0 0 0 0 0 0 0
GROUP II - Commercial 2 1,091 1,087 1,096 1,102 1,105 1,109 1,120 1,131 GROUP III - Commercial 3 244 243 245 247 247 248 250 253 GROUP IV - Commercial 4 165 164 166 167 167 168 169 171 Other 0 0 0 0 0 0 0 0
Brewery - B2 7 7 7 7 7 7 7 7
Brewery - B3 12 12 12 12 12 12 12 12
Brewery - B4 4 4 4 4 4 4 4 4
GROUP VI - Large Volume (no accounts) 0 0 0 0 0 0 0 0
Industrial Pretreatment Class III 1 1 1 1 1 1 1 1
Institutional 3 3 3 3 3 3 3 3
GROUP V - Elementary Schools 20 20 20 20 20 20 21 21
GROUP V - Junior High Schools 4 4 4 4 4 4 4 4
GROUP V - High Schools 4 4 4 4 4 4 4 4
GROUP V - Boarding Schools 1 1 1 1 1 1 1 1
Total Accounts 23,952 23,875 24,054 24,200 24,251 24,342 24,582 24,834 Feb. 11, 2025
Item #8 Page 86 of 265

CITY OF CARLSBAD
Wastewater Financial Model
Customer Data Projection
NOTE FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

SFR & MINIMUM CHARGES
GROUP I - SFR & Minimum Charges 21,620 21,550 21,712 21,844 21,890 21,972 22,189 22,416 Additional Billed Due to Minimum Charges Monthly 673 671 676 680 681 684 691 698 Total Minimum Charges (Monthly) 22,293 22,221 22,388 22,524 22,571 22,656 22,879 23,114 -0.321% 0.749% 0.610% 0.210%

BILLED/ESTIMATED WATER USE (HCF)
GROUP I - SFR & Minimum Charges 0 0 0 0 0 0 0 0
GROUP I - MFR/Mobile Homes 646,426 644,351 649,175 653,132 654,502 656,961 663,435 670,231 COMMERCIAL, C1 0 0 0 0 0 0 0 0
GROUP II - Commercial 2 383,006 381,777 384,635 386,979 387,791 389,248 393,084 397,111 GROUP III - Commercial 3 405,248 403,947 406,971 409,452 410,311 411,852 415,911 420,171 GROUP IV - Commercial 4 199,917 199,275 200,767 201,991 202,414 203,175 205,177 207,279 Other 0 0 0 0 0 0 0 0
Brewery - B2 4,786 4,771 4,806 4,836 4,846 4,864 4,912 4,962 Brewery - B3 9,939 9,907 9,981 10,042 10,063 10,101 10,201 10,305 Brewery - B4 3,088 3,078 3,101 3,120 3,127 3,138 3,169 3,202 GROUP VI - Large Volume (no accounts) 0 0 0 0 0 0 0 0
Industrial Pretreatment Class III 9,044 9,015 9,082 9,138 9,157 9,191 9,282 9,377 Institutional 680 678 683 687 689 691 698 705
GROUP V - Elementary Schools 0 0 0 0 0 0 0 0
GROUP V - Junior High Schools 0 0 0 0 0 0 0 0
GROUP V - High Schools 0 0 0 0 0 0 0 0
GROUP V - Boarding Schools 0 0 0 0 0 0 0 0
Total Accounts 1,662,134 1,656,798 1,669,202 1,679,377 1,682,899 1,689,222 1,705,869 1,723,343

NUMBER OF STUDENTS
GROUP V - Elementary Schools 6,905 6,883 6,934 6,977 6,991 7,018 7,087 7,159 GROUP V - Junior High Schools 2,692 2,683 2,703 2,720 2,726 2,736 2,763 2,791 GROUP V - High Schools 3,965 3,952 3,982 4,006 4,015 4,030 4,069 4,111 GROUP V - Boarding Schools 180 179 181 182 182 183 185 187 Feb. 11, 2025
Item #8 Page 87 of 265
2025 WASTEWATER COST-OF-SERVICE STUDY
JANUARY 2025 / FINAL / CAROLLO

CITY OF CARLSBAD

APPENDIX G PROJECTIONS FOR ALTERNATIVE OPTION

Feb. 11, 2025
Item #8 Page 88 of 265

CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option With Bonds Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% 0.0% See "Op Exp for Encina Services" tab for breakdown 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% 3.3% 3.3% 60.2% 33.1%
Vehicles 0.0% 5.0% 5.0% 90.0% 0.0%
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 13.6% 12.6% 13.6% 60.2% 0.0%
Weighted Average O&M 26.6% 20.6% 22.3% 30.5% 0.0%
Weighed Average Revenue Requirements 20.8% 17.0% 18.4% 43.8% 0.0%

PLANT IN SERVICE RCNLD TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES IM - IMPROVEMENTS 7,187,260$ 100.0% 0% JV - JOINT VENTURE 52,584,214 40.3% 28.6% 31.1% 0% LD - LAND 2,629,102 100% ME - MACHINERY & EQUIPMENT 806,073 100% PP - PIPES & PUMPING 70,927,459 5.0% 5.0% 90.0% 0% Plant-In-Service Sub Total 134,134,107$ 21,182,642$ 18,588,265$ 19,906,053$ 71,021,973$ 3,435,175$ Reallocation of "As All Others" 556,746$ 488,557$ 523,193$ 1,866,678$ (3,435,175)$ Total Allocation 134,134,107$ 21,739,387$ 19,076,823$ 20,429,246$ 72,888,651$ -$ Percentage Allocation 100% 16.2% 14.2% 15.2% 54.3% 0.0%

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Item #8 Page 89 of 265

CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option With Bonds Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES FYE 2025 ALLOCATION TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES

EXPENDITURES
Personnel
Reg Salaries 2,215,920$ Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Incentive Pay - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Hazard Pay 51,570 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% IOD Worker's Comp - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Overtime Salaries 67,600 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Standby Pay 26,490 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Parttimes Salaries - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Intern Salaries 3,790 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Temporary Help - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Health Insurance 455,810 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Life Insurance 1,500 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% AD&D - City Paid 740 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Vision Insurance - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Medicare 33,420 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Cell Phone Reimbursement - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Auto Allowance 1,180 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Earned Leave Accrual - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Healthy Emp Awards - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Final Vacation Pay - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Final Sick Leave Pay - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Disability 13,340 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Unemployment 11,520 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Worker's Compensation 57,200 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% PERS 292,501 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% PERS Unfunded Liab Exp 375,598 Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% PERS (GASB 68 CONTRA ACCOUNT) - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Operation Expense - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Social Security - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Deferred Comp - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% Other Personnel - Staff Allocation 0.0% 3.3% 3.3% 60.2% 33.1% 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 10,400 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 1,040 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Software Maintenance 28,320 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 15,600 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Wash and Wax 4,680 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%

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CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option With Bonds Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES Pipeline Maintenance 87,980 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 10,400 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Maintenance, Repair and Rehab 3,120 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 433,970 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Encina Services 6,180,000 Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% 0.0% Encina Services (Pension Payoff) (281,750) Treatment Flow/BOD/TSS 40.3% 28.6% 31.1% 0.0% 0.0% Miscellaneous Outside Services 468,540 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Bank Services 44,940 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 39,880 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 5,200 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Electrical/SCADA Services 34,780 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 20,800 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Smartcover WIFI/Alarm Services 52,000 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Landscaping Services 135,490 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Ads and Publishing 2,080 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Dues and Subscriptions 10,920 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Books and Publications 520 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 7,800 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Postage 4,680 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Office Supplies 5,200 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Office Furniture & Equipment 5,200 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Computer Software 10,400 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Misc. Computer Hardware 4,160 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Promo Materials 5,200 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 322,970 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Telephone & Communications 12,480 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Waste Dispoal Services 11,120 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Water 38,940 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 520 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Janitorial Supplies 310 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Parts-Vehicles 520 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Parts-Equip 217,620 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Rock and Mineral Products 4,160 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Asphalt 520 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Small Tools 1,560 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Safety Equipment 22,620 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Uniforms and Accessories 5,200 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 2,080 Collections 0.0% 5.0% 5.0% 90.0% 0.0% Chemicals 85,630 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 17,060 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Employee Training 3,120 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%

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CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option With Bonds Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES Training/Training Related Travel 4,680 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Conference Travel 3,300 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Misc. Meals/Miles 3,340 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Bad Debt Exp - Other Inv/Bills 20,800 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 2,730 Vehicles 0.0% 5.0% 5.0% 90.0% 0.0% Vehicle Maintenance (2) 144,520 Vehicles 0.0% 5.0% 5.0% 90.0% 0.0% Vehicle Replacement 186,760 Vehicles 0.0% 5.0% 5.0% 90.0% 0.0% General Liab 458,860 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Information Technologies 335,870 As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Misc Interdepartmental Charges 877,560 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 (1,455,673) [Non-Encina O&M] 0.0% 2.3% 2.3% 42.3% 53.1% Capital Outlay
Capital Outlay < $10k - New -$ Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Capital Outlay < $10k - Repl - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Cap Outlay - Vehicles 25,637 Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Computer Equip > $10k - Repl - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Office Equipment - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Other Equipment - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Office Furniture - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Capitalized Assets - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Other Capital Outlay - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Operating Expenditures Sub Total 12,339,545$ 2,379,502$ 1,841,048$ 1,989,113$ 2,726,319$ 3,403,562$ Reallocation of "As All Others" 906,311$ 701,224$ 757,619$ 1,038,408$ (3,403,562)$ Total Allocation 12,339,545$ 3,285,814$ 2,542,272$ 2,746,732$ 3,764,727$ -$ Percentage Allocation 100.0% 26.6% 20.6% 22.3% 30.5%

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CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option With Bonds Functional Allocation
TEST YEAR: FYE 2025
ALLOCATION INDEX FYE 2025 TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES RATE REVENUE REQUIREMENT FYE 2025 ALLOCATION TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS NOTES OPERATING EXPENSES (from above) 12,339,545$ 26.6% 20.6% 22.3% 30.5% 0.0%

NON-OPERATING EXPENSES
Replacement Funding (Depreciation) 5,361,480$ Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Rate Funded Capital 4,594,379 Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Debt Service - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Transfers to Capital Fund - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Replacement Funding - Capital Improvement Plan 13.6% 12.6% 13.6% 60.2% 0.0% Transfer Out - Debt Service - As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Adj. to Reflect Full Year Increase 2,072,584.8 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)4,442,933$ As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Other Charges for Services (12,480) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Fines and Forfeitures (120,730) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Income from Property & Investments (503,337) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Interdepartmental (124,800) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Other Revenues (69,680) As Weighted Average 0.0% 0.0% 0.0% 0.0% 100.0% Total Rate Revenues to be Collected 27,979,894$ 4,642,700$ 3,796,267$ 4,098,566$ 9,757,870$ 5,684,491$ Reallocation of "As All Others" 1,183,714$ 967,906$ 1,044,981$ 2,487,891$ (5,684,491)$ Total Allocation 27,979,894$ 5,826,414$ 4,764,172$ 5,143,547$ 12,245,761$ -$ Percentage Allocation 100% 20.8% 17.0% 18.4% 43.8% 0.0% Check
Rate Revenues from Revenue Requirement 27,979,894$
Rate Revenues from Functional Allocation 27,979,894$
Difference -$

UNIT COST CALCULATIONS TREATMENT FLOW BOD TSS COLLECTION FLOW AS ALL OTHERS ccfs lbs lbs lbs
Amount Allocable to Constituent 5,826,414$ 4,764,172$ 5,143,547$ 12,245,761$ Total Units 3,138,696 7,085,763 8,397,992 3,138,696
PER UNIT COSTS 1.856$ 0.672$ 0.612$ 3.902$

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2024 2025 2026 2027 2028 2029

CITY OF CARLSBAD
Wastewater Financial Model - Alternative Option With Bonds Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

CASH FLOW TESTS

REVENUES
Rate Revenues 23,556,818$ 25,907,310$ 28,038,590$ 30,395,430$ 31,615,830$ 32,897,870$ Other Charges for Services 12,000 12,480 12,792 13,112 13,440 13,776 Fines and Forfeitures 120,000 120,730 120,980 121,430 122,630 123,890 Income from Property & Investments 744,011 503,337 204,758 152,049 278,551 340,394 Interdepartmental 120,000 124,800 127,920 131,120 134,400 137,760 Other Revenues 67,000 69,680 71,422 73,205 75,040 76,916 TOTAL REVENUES 24,619,830$ 26,738,337$ 28,576,462$ 30,886,346$ 32,239,890$ 33,590,606$

EXPENDITURES
Ongoing Operating Expenses
Personnel 3,322,088$ 3,608,180$ 3,726,452$ 3,847,915$ 3,972,679$ 4,101,841$ Encina Operations 6,000,000 6,180,000 6,365,400 6,556,360 6,753,050 6,955,640 Maintenance & Equipment 4,100,161 3,981,400 4,086,360 4,194,187 4,304,974 4,418,775 Capital Outlay 24,651 25,637 26,278 26,935 27,608 28,299 Replacement Funding 10,090,113 - - - - - Transfer Out - Debt Service - - - - - - Other Operating Expenses
One-time Funding (Budget Analysis Amount) (1,424,566) (1,455,673) (1,491,457) (1,528,179) (1,565,868) (1,604,625) Rate Funded Capital 2,797,106 4,594,379 14,788,096 - 6,972,224 1,842,321 Debt Service - - - 1,936,462 1,936,462 2,922,090 Total Operating Expenditures 24,909,552$ 16,933,923$ 27,501,129$ 15,033,679$ 22,401,130$ 18,664,340$ Policy Expenditures
Replacement Funding 5,300,000$ 5,361,480$ 5,423,140$ 5,485,510$ 5,548,590$ 5,612,400$ Transfers to Capital Fund - - - - - - Additions to Meet Minimum Fund Balances - - - - - - Total Policy Expenditures 5,300,000$ 5,361,480$ 5,423,140$ 5,485,510$ 5,548,590$ 5,612,400$

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2024 2025 2026 2027 2028 2029

CITY OF CARLSBAD
Wastewater Financial Model - Alternative Option With Bonds Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
POLICY OVERRIDES (input in Dashboard)
Replacement Funding No Override No Override No Override No Override No Override No Override Transfers to Capital Fund -$ -$ -$ -$ -$ -$ Additions to Meet Minimum Fund Balances (*) -$ -$ -$ -$ -$ -$ TOTAL EXPENDITURES 30,209,552$ 22,295,403$ 32,924,269$ 20,519,189$ 27,949,720$ 24,276,740$ CASH FLOW SURPLUS (DEFICIT) (5,589,723)$ 4,442,933$ (4,347,807)$ 10,367,157$ 4,290,170$ 9,313,866$

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2024 2025 2026 2027 2028 2029

CITY OF CARLSBAD
Wastewater Financial Model - Alternative Option With Bonds Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

DEBT COVERAGE TEST

1.25 x Bond Coverage
Calculation of Net Revenues
Operating Revenues
User Charges 23,556,818$ 25,907,310$ 28,038,590$ 30,395,430$ 31,615,830$ 32,897,870$ Other/Misc Revenues - Excludes Interest Earnings 319,000 327,690 333,114 338,867 345,510 352,342 Yes Connection Fees 471,438$ 400,974$ 328,896$ 113,883$ 204,368$ 538,144$ Yes Grants - - - - - - Modeled Interest Earnings
Yes Operating Funds 265,571$ 211,226$ 93,872$ 64,569$ 87,516$ 144,493$ Yes Capital Funds 478,440 292,111 110,886 87,480 191,035 195,902 Total Revenues Included in Test 25,091,268$ 27,139,311$ 28,905,359$ 31,000,229$ 32,444,259$ 34,128,750$ Less: Operating Expenses (13,422,249)$ (13,769,580)$ (14,178,212)$ (14,598,462)$ (15,030,703)$ (15,476,256)$ Net Operating Revenues Avaiable for Debt Service 11,669,019$ 13,369,731$ 14,727,147$ 16,401,768$ 17,413,555$ 18,652,494$ Debt Service -$ -$ -$ 1,936,462$ 1,936,462$ 2,922,090$ Coverage - - - 2,420,577 2,420,577 3,652,612 Subtotal: Debt Service and Coverage -$ -$ -$ 4,357,039$ 4,357,039$ 6,574,702$ BOND COVERAGE SURPLUS (DEFICIT) 11,669,019$ 13,369,731$ 14,727,147$ 12,044,729$ 13,056,516$ 12,077,792$

Feb. 11, 2025
Item #8 Page 96 of 265
2024 2025 2026 2027 2028 2029

CITY OF CARLSBAD
Wastewater Financial Model - Alternative Option With Bonds Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029

REVENUE REQUIREMENT
Revenue Requirement (5,589,723)$ 4,442,933$ (4,347,807)$ 10,367,157$ 4,290,170$ 9,313,866$ Cash Flow Driven Surplus Cash Flow Driven Surplus Surplus Surplus Month of implementation January January January January January January Calculated Increase (%) 47.46% 0.00% 31.01% 0.00% 0.00% 0.00% Rate Increase Override (INPUT in Dashboard) 20.00% 8.00% 8.00% 3.00% 3.00% 3.00% Rate Increase (%) 20.00% 8.00% 8.00% 3.00% 3.00% 3.00%
Cumulative Rate Increase (%) 86.0% 103.9% 120.2% 126.8% 133.6% 140.6% SFR Rate $51.74 $56.70 $61.23 $63.07 $64.96 $66.91

CASH FLOW
Revenues Before Rate Increase 24,619,830$ 26,738,337$ 28,576,462$ 30,886,346$ 32,239,890$ 33,590,606$ Revenues From Rate Increase - 2,072,585 2,243,087 911,863 948,475 986,936 Less: Rate Increase Delay - (1,036,292) (1,121,544) (455,931) (474,237) (493,468) Less: Adjustment for Implementation Delay (1,036,292)
Less: Expenditures (30,209,552) (22,295,403) (32,924,269) (20,519,189) (27,949,720) (24,276,740) Cash Flow (5,589,723)$ 4,442,933$ (3,226,263)$ 10,823,088$ 4,764,408$ 9,807,334$ RATE REVENUE REQUIREMENT 23,556,818$ 27,979,894$ 30,281,677$ 31,307,293$ 32,564,305$ 33,884,806$ Total Ending Balance 10,987,236$ 9,488,607$ 5,716,297$ 22,138,778$ 11,900,670$ 17,120,342$ 161 days 205 days 76 days 538 days 194 days 335 days
Operating Fund
Beginning Balance 16,576,959$ 4,545,674$ 4,841,560$ 1,615,297$ 7,136,262$ 7,313,008$ Cash Flow (5,589,723) 4,442,933 (3,226,263) 10,823,088 4,764,408 9,807,334 Transfers from Operating to Capital Fund (6,441,562) (4,147,047) - (5,302,123) (4,587,662) (8,647,301) Ending Operating Fund Balance 4,545,674$ 4,841,560$ 1,615,297$ 7,136,262$ 7,313,008$ 8,473,041$

Feb. 11, 2025
Item #8 Page 97 of 265
2024 2025 2026 2027 2028 2029

CITY OF CARLSBAD
Wastewater Financial Model - Alternative Option With Bonds Revenue Requirement
FYE 2024 FYE 2025 FYE 2026 FYE 2027 FYE 2028 FYE 2029
Coverage Tests - Post Rate Increase
Calculation of Net Revenues
Operating Revenues
User Charges 23,556,818$ 25,907,310$ 29,160,134$ 30,851,361$ 32,090,067$ 33,391,338$ Other/Misc Revenues 319,000 327,690 333,114 338,867 345,510 352,342 Change selection above
Yes Connection Fees 471,438$ 400,974$ 328,896$ 113,883$ 204,368$ 538,144$ Yes Grants - - - - - - Modeled Interest Earnings
Yes Operating Funds 265,571$ 211,226$ 93,872$ 64,569$ 87,516$ 144,493$ Yes Capital Funds 478,440 292,111 110,886 87,480 191,035 195,902 Total Revenues Included in Test 25,091,268$ 27,139,311$ 30,026,902$ 31,456,160$ 32,918,496$ 34,622,218$ LESS: Operating Expenses (13,422,249)$ (13,769,580)$ (14,178,212)$ (14,598,462)$ (15,030,703)$ (15,476,256)$ Net Operating Revenues Available for Debt Service 11,669,019$ 13,369,731$ 15,848,691$ 16,857,699$ 17,887,793$ 19,145,962$ Existing Debt Test - Includes debt service only for debt that has been issued and has been input into the model.

Net Operating Revenues Available for Debt Service 11,669,019$ 13,369,731$ 15,848,691$ 16,857,699$ 17,887,793$ 19,145,962$ LESS: Existing Debt Service - - - (293,749) (293,749) (293,749) Revenues Available for Coverage 11,669,019$ 13,369,731$ 15,848,691$ 16,563,950$ 17,594,044$ 18,852,213$ Existing Debt Service Coverage Ratio No Existing Debt No Existing Debt No Existing Debt 57.39 x 60.89 x 65.18 x Total Debt Test - Includes exiting and projected debt.

Net Operating Revenues Available for Debt Service 11,669,019$ 13,369,731$ 15,848,691$ 16,857,699$ 17,887,793$ 19,145,962$ Less: Existing Debt Service - - - (293,749) (293,749) (293,749) Less: Projected Debt Service - - - (1,642,713) (1,642,713) (2,628,341) Revenues Available for Coverage 11,669,019$ 13,369,731$ 15,848,691$ 14,921,237$ 15,951,331$ 16,223,872$ Total Debt Service Coverage Ratio No Debt No Debt No Debt 8.71 x 9.24 x 6.55 x

Feb. 11, 2025
Item #8 Page 98 of 265

CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option with Bonds Customer Allocation & Rates
FYE 2025 PROPOSED
Customer Data Billed Units Summary
FYE 2025 Units
ESTIMATED SEWER FLOWS (HCF) 3,138,696
ESTIMATED BOD DISCHARGE (lbs) 7,085,763
ESTIMATED TSS DISCHARGE (lbs) 8,397,992
CUSTOMER ACCOUNTS 24,200
Allocated Revenue Requirements TREATMENT FLOW BOD TSS COLLECTION FLOW TOTAL Rate Revenue Required 5,826,414$ 4,764,172$ 5,143,547$ 12,245,761$ 27,979,894$ Unit Basis for Rate Design ESTIMATED SEWER

FLOWS (HCF)

ESTIMATED BOD
DISCHARGE (lbs)

ESTIMATED TSS
DISCHARGE (lbs)

ESTIMATED SEWER

FLOWS (HCF)
2025 Units 3,138,696 7,085,763 8,397,992 3,138,696 2025 Unit Cost $1.856 $0.672 $0.612 $3.902
per HCF per lb per lb per HCF
Rate Class Unit Costs - Per HCF Discharged BOD (mg/l) BOD ($/HCF) TSS (mg/l) TSS ($/HCF) Flow ($/HCF) Total $ Per HCF Discharged GROUP I - SFR & Minimum Charges 301 $1.26 379 $1.45 $5.76 $8.47 GROUP I - MFR/Mobile Homes 301 $1.26 379 $1.45 $5.76 $8.47 GROUP II - Commercial 2 196 $0.82 229 $0.87 $5.76 $7.46 GROUP III - Commercial 3 495 $2.08 529 $2.02 $5.76 $9.86 GROUP IV - Commercial 4 1236 $5.19 1290 $4.93 $5.76 $15.87 Other 0 $0.00 0 $0.00 $5.76 $5.76
Brewery - B2 1906 $8.00 1537 $5.88 $5.76 $19.63
Brewery - B3 1236 $5.19 1290 $4.93 $5.76 $15.87
Brewery - B4 2426 $10.18 2067 $7.90 $5.76 $23.84
GROUP VI - Large Volume (no accounts) 121 $0.51 152 $0.58 $5.76 $6.84 Industrial Pretreatment Class III 450 $1.89 905 $3.46 $5.76 $11.11 Institutional 196 $0.82 190 $0.73 $5.76 $7.31
GROUP V - Elementary Schools 196 $0.82 190 $0.73 $5.76 $7.31 GROUP V - Junior High Schools 196 $0.82 190 $0.73 $5.76 $7.31 GROUP V - High Schools 196 $0.82 190 $0.73 $5.76 $7.31
GROUP V - Boarding Schools 196 $0.82 190 $0.73 $5.76 $7.31 ALLOCATION YEAR:

Feb. 11, 2025
Item #8 Page 99 of 265

CITY OF CARLSABAD
Wastewater Financial Model - Alternative Option with Bonds Customer Allocation & Rates
GROUP I - SFR & Minimum Charges $8.47 1.0 6.69 $56.69 $56.70 SFR with ADU $8.47 1.5 10.04 $85.04 $85.04
GROUP I - MFR/Mobile Homes $8.47 76.96% $6.52 $6.53
GROUP II - Commercial 2 $7.46 76.96% $5.74 $5.74
GROUP III - Commercial 3 $9.86 76.96% $7.59 $7.59
GROUP IV - Commercial 4 $15.87 76.96% $12.22 $12.22
Other $5.76 0.00% $0.00 $0.00
Brewery - B2 $19.63 70.55% $13.85 $13.86
Brewery - B3 $15.87 76.96% $12.22 $12.22
Brewery - B4 $23.84 70.55% $16.82 $16.83
GROUP VI - Large Volume (no accounts) $6.84 76.96% $5.27 $5.27 Industrial Pretreatment Class III $11.11 76.96% $8.55 $8.55 Institutional $7.31 76.96% $5.62 $5.63
Institutional Rates Total $ Per HCF
Discharged
Assumed Flow per
Student (gpd)
Adjustment for
Student Days
Effective Flow per
Student (HCF per
Month)
Calculated Monthly Rate
(per Student)
No Rounding
Proposed Monthly Rate
(per Student) Rounded
GROUP V - Elementary Schools $7.31 6.84 55% 0.15 $1.11 $1.12 GROUP V - Junior High Schools $7.31 10.26 55% 0.23 $1.67 $1.68 GROUP V - High Schools $7.31 13.68 55% 0.30 $2.23 $2.23 GROUP V - Boarding Schools $7.31 38.18 100% 1.55 $11.34 $11.35 Calculated Monthly Rate
(per Account or Dwelling
Unit)
No Rounding
Calculated Monthly Rate (per HCF of
Water Used) Rounded
Proposed Monthly Rate (per Account
or Dwelling Unit)
Rounded
GROUP I - SFR & Minimum Charges Estimated Monthly
Discharge (HCF)
Total $ Per HCF
Discharged EDU Flow Factor
Discharge Based Rates Total $ Per HCF
Discharged
Return to Sewer
Factor
Calculated Monthly Rate
(per Account or Dwelling
Unit)
No Rounding
Feb. 11, 2025
Item #8 Page 100 of 265