Agenda packet — Corona City Council, December 4, 2024 (part 1 of 24)

Wednesday, December 4, 2024
Closed Session Council Board Room 4:30 PM
Open Session Council Chambers 6:30 PM
This meeting will be conducted in person. You can participate remotely: https://coronaca-gov.zoom.us/j/84391286021

1. CONVENE CLOSED SESSION

1.1 CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code Section 54956.8
Property: 1045 Auburndale Street
Agency Negotiator: Jacob Ellis, City Manager
Negotiating Party: Corona Norco Family YMCA
Under Negotiation: Price and Terms of Payment

1.2 CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency Designated Representative: Jacob Ellis, City Manager Employee Organizations: Corona Supervisors Association (CSA)

1.3 CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency Designated Representative: Tom Richins, Mayor
Unrepresented Employees: City Manager and City Attorney

1.4 CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code Section 54956.8
Property: 400 S Ramona
Agency Negotiator: Jacob Ellis, City Manager
Negotiating Party: Woody Harpole
Under Negotiation: Price & Terms of Payment

1.5 CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency Designated Representative: Jacob Ellis, City Manager Unrepresented Employees: Part-Time Employees

2. INVOCATION- Pastor Shannon Scott, Grace Baptist Church The invocation may be offered by a person of any religion, faith, belief or non-belief, as well as Council Members. A list of volunteers is maintained by the City Clerk and interested persons should contact the Clerk for further information.

3. PLEDGE OF ALLEGIANCE

4. CONVENE OPEN SESSION

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Individuals wishing to address the City Council are requested to complete a speaker card available at the rear of the Council Chambers. Please deliver the card to the City Clerk prior to the item being heard by the City Council or, for items not listed on the agenda, before the "Communications" section of the agenda is called.

Please observe a three-minute limit for communications and please note that the Communications section of the agenda is limited to items within the subject matter jurisdiction of the City Council that are not listed on the agenda. Once called upon to speak, you are requested to state your name and city of residence for the record.

5. PROCLAMATIONS/RECOGNITIONS/PRESENTATIONS

6. MEETING MINUTES

6.1 MINUTES - CITY COUNCIL MEETING NOVEMBER 20, 2024
Approval of Minutes for the City Council, Successor Agency to the Redevelopment Agency of the City of Corona, Corona Public Financing Authority, Corona Utility Authority, Corona Housing Authority City Council Meeting of November 20, 2024.

6.2 MINUTES - STUDY SESSION MEETING NOVEMBER 20, 2024
Approval of Minutes for the City Council, Successor Agency to the Redevelopment Agency of the City of Corona, Corona Public Financing Authority, Corona Utility Authority, Corona Housing Authority Study Session meeting of November 20, 2024.

7. CONSENT CALENDAR
All items listed on the Consent Calendar are considered to be routine matters, status reports or documents covering previous City Council action. The items listed on the Consent Calendar may be enacted in one motion. With the concurrence of the City Council, a Council member or any person in attendance may request that an item be removed for further consideration.

7.1 CITY COUNCIL ADOPTION OF ORDINANCE NO. 3405, SECOND READING OF AN ORDINANCE

OF THE CITY OF CORONA, CALIFORNIA
City Council adoption of Ordinance no. 3405, second reading of an ordinance of the City of Corona, California, modifying the budget based water rate structure and establishing rates for potable water, reclaimed water, and sewer service fees and charges

7.2 APPROVAL OF ENTERPRISE RESOURCE PLANNING (ERP) PROJECT TEMPORARY STAFFING

AND CONSULTING PROFESSIONAL SERVICES AGREEMENTS AND AUTHORIZATION OF

LIMITED-TERM CITY POSITIONS
That the City Council:

Authorize the City Manager, or his designee, to approve and execute the professional services agreements with Remy Corporation, Express Employment Professionals, and Theresa Lee Consulting as follows:
a.

1. Remy Corporation in the amount of $497,250 through June 30, 2026.

2. Express Employment Professionals in the amount of $315,900 through June 30, 2026.

3. Theresa Lee Consulting in the amount of $360,490 through June 30, 2026.

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Authorize the City Manager, or his designee, to issue Purchase Orders to Remy Corporation for $497,250, Express Employment Professionals for $315,900, and Theresa Lee Consulting for $360,490.
b.

Authorize the City Manager, or his designee, to execute any non-substantive extensions, change orders, purchase orders, and amendments necessary with Remy Corporation, Express Employment Professionals, and Theresa Lee Consulting within a contingency of up to 10% of the original contract amount.
c.
d. Authorize the following limited term City staff positions:

1. Payroll Technician I, full-time, limited-term through June 30, 2025.

2. Intern II, part-time, limited-term through June 30, 2026.

3. ERP Administrator, full-time, limited-term through June 30, 2026.

4. Applications Analyst, full-time, limited-term through June 30, 2026.

7.3 RELEASE OF SURVEY MONUMENTATION SECURITY POSTED BY VISTA MONTEREY 91 LLC RELEASE OF SURVEY MONUMENTATION SECURITY POSTED BY VISTA MONTEREY 91 LLC, A DELAWARE LIMITED LIABILITY COMPANY FOR PARCEL MAP 35661 LOCATED BETWEEN PROMENADE AVENUE AND THE 91 FREEWAY, WEST OF THE EXISTING CORONA HILLS PLAZA SHOPPING CENTER (APPLICANT: VISTA MONTEREY 91, LLC, A DELAWARE LIMITED LIABILITY

COMPANY)
That the City Council release the survey monumentation security posted by Vista Monterey 91, LLC, for Parcel Map 35661. (Bond No. 800018768)

7.4 RELEASE OF GRADING AND IMPROVEMENT SECURITIES POSTED BY LENNAR HOMES OF CALIFORNIA INC.

RELEASE OF GRADING AND IMPROVEMENT SECURITIES POSTED BY LENNAR HOMES OF CALIFORNIA INC., A CALIFORNIA COROPRATION FOR TRACT MAPS 36541, 36541-1, AND 36541-2 LOCATED SOUTH OF GREEN RIVER ROAD AND SIERRA BELLA DRIVE, BEYOND CALLE DEL ORO AND WEST OF PASEO GRANDE (APPLICANT: LENNAR HOMES OF CALIFORNIA INC.,

A CALIFORNIA CORPORATION)
That the City Council:
a. Accept the improvements constructed for Tract Maps 36541, 36541-1, and 36541-2.

Retain twenty-five percent (25%) of the Faithful Performance Security for one year beyond the acceptance of the improvements as security for repair and replacement of any improvements that fail to meet City standards at the end of the one-year period. (Bond No. 24069386 FM, and 24069387 FM)
b.

Retain the Labor and Material Security for six months beyond the acceptance of the improvements and automatically release the security unless claims are filed. (Bond No. 24069386 LM, and 24069387 LM)
c.

Release Grading and Erosion Control Securities. (Bond No. 105199, DEP16-0096, K15327534, R7935, R7933, 72BSBIA1954, R9569, 72BSBIA1952, R9566, 1074015, R11514, 1074014, R11513)
d.

7.5 RESOLUTION APPROVING AND ATTESTING TO THE VERACITY OF THE 2023 POWER SOURCE

DISCLOSURE PROGRAM ANNUAL REPORT AND POWER CONTENT LABEL TO THE CALIFORNIA ENERGY COMMISSION FOR THE YEAR ENDING DECEMBER 31, 2023

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That the City Council adopt Resolution No. 2024-093, approving and attesting to the veracity of the 2023 Power Source Disclosure Program Annual Report and Power Content Label to the California Energy Commission for the year ending December 31, 2023.

7.6 ISSUANCE OF PURCHASE ORDER TO QUINN POWER SYSTEMS FOR TWO EMERGENCY

STANDBY GENERATOR SETS FOR THE SIERRA DEL ORO WATER TREATMENT FACILITY AND

THE GREEN RIVER LIFT STATION
That the City Council:
a. Authorize the City Manager, or his designee, to issue a purchase order to Quinn Power Systems in the amount of $217,938.69 for the procurement of two emergency standby generator sets. b. Make a determination under Corona Municipal Code 3.08.140(C), that competitive bidding has been satisfied based upon reasons provided in the “Basis for determination of competitive bidding” section of this report.
c. Authorize the City Manager, or his designee, to approve and execute any documents necessary to implement change orders, up to the amount authorized by Corona Municipal Code 3.08.080(I) with respect to the total compensation authorized for the purchase of two emergency standby generator sets.

That the Corona Utility Authority review, ratify, and to the extent necessary, direct that the City Council take the above actions.

7.7 CONSTRUCTION CONTRACT WITH DAVID OLLIS LANDSCAPE DEVELOPMENT, INC. IN THE AMOUNT OF $381,875 FOR THE CITY HALL VETERANS MEMORIAL IMPROVEMENTS, CAPITAL IMPROVEMENT PROJECT NO. FC-2023-06; NOTICE INVITING BIDS 25-019AT That the City Council:

Adopt the Plans and Specifications for the City Hall Veterans Memorial Improvements, Capital Improvement Project No. FC-2023-06.
a.

Award Notice Inviting Bids 25-019AT to David Ollis Landscape Development, Inc., the lowest responsive, responsible bidder, for the total bid amount of $381,875, and waive all minor irregularities in the bidding document as submitted by the said bidder. b.

Approve the Construction Contract with David Ollis Landscape Development, Inc. for the City Hall Veterans Memorial Improvements, Capital Improvement Project No. FC-2023-06 in the amount of $381,875.
c.

Authorize the City Manager, or his designee, to execute the Construction Contract with David Ollis Landscape Development, Inc. in the amount of $381,875, including any non-substantive extensions, change orders, purchase orders, and amendments up to the amount authorized by Corona Municipal Code Section 3.08.050(H) which is equivalent to 10% or $38,187. d.

Authorize an appropriation in the amount of $122,970 from Measure X Fund 120 to the City Hall Veterans Memorial Improvements, Capital Improvement Project No. FC-2023-06. e.

7.8 VARIOUS PROFESSIONAL SERVICES AGREEMENTS FOR REQUEST FOR PROPOSAL 24-069AS

FOR MULTIPLE YEARLY PURCHASE ORDERS FOR ON-CALL ENGINEERING AND

PROFESSIONAL CONSULTING SERVICES CONTRACTS
That the City Council:

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Approve the Professional Services Agreements with the firms identified in Exhibit 2 for the not-to-exceed fiscal year amounts noted therein.
a.

Award Request for Proposals No. 24-069AS for On-Call Engineering and Professional Consulting Services to the firms identified in Exhibit 2 for the not-to-exceed fiscal year amounts noted therein.
b.

Authorize the City Manager, or his designee, to execute the Professional Services Agreements and one additional three-year agreement amendment to the agreements mentioned above for subsequent fiscal years in amounts not-to-exceed amounts noted in Exhibit 2 per fiscal year, per agreement, and to approve necessary change orders and/or amendments up to the amount provided by Corona Municipal Code Section 3.08.070(I). c.

Authorize the City Manager, or his designee, to issue purchase orders to the firms identified in Exhibit 2 for the not-to-exceed fiscal year amounts noted therein. d.

7.9 CONSTRUCTION CONTRACT WITH MICON CONSTRUCTION, INC. IN THE AMOUNT OF $999,042

FOR COMMUNITY FACILITIES & INFRASTRUCTURE PHASE I - VICTORIA PARK SPLASHPAD CAPITAL IMPROVEMENT PROJECT NO. FC-2023-12; NOTICE INVITING BIDS 25-022AS That the City Council:

Adopt the Plans and Specifications for the Victoria Park Splashpad, Capital Improvement Project No. FC-2023-12.
a.

Award Notice Inviting Bids 25-022AS to Micon Construction, Inc., the lowest responsive, responsible bidder, for the total bid amount of $999,042, and waive all minor irregularities in the bidding document as submitted by the said bidder.
b.

Approve the Construction Contract with Micon Construction, Inc. for the Community Facilities & Infrastructure Phase I - Victoria Park Splashpad Capital Improvement Project No. FC-2023- 12 in the amount of $999,042.
c.

Authorize the City Manager, or his designee, to execute the Construction Contract with Micon Construction, Inc., in the amount of $999,042, including any non-substantive extensions, change orders, purchase orders, and amendments up to the amount authorized by Corona Municipal Code Section 3.08.050(H) which is equivalent to 10% or $99,904. d.

Authorize the City Manager or his designee to issue a purchase order to Micon Construction, Inc. in the amount of $999.042.
e.

Authorize an appropriation in the amount of $380,000 from the Parks and Open Space Fund 217 to the Community Facilities & Infrastructure Phase I - Victoria Park Splashpad Capital Improvement Project No. FC-2023-12.
f.

Authorize a budgetary transfer in the amount of $634,289 from the Community Facilities & Infrastructure Phase III - Victoria Park Community Facility Capital Improvement Project No.

FC-2025-20 to the Community Facilities & Infrastructure Phase I - Victoria Park Splashpad Capital Improvement Project No. FC-2023-12, within the Community Development Block Grant (CDBG) Fund 431.
g.

7.10 CONSTRUCTION CONTRACT WITH ONYX PAVING COMPANY, INC. IN THE AMOUNT OF $10,963,000 FOR THE CITYWIDE PAVEMENT REHABILITATION CAPITAL IMPROVEMENT PROJECT NO. ST-2025-26; NOTICE INVITING BIDS 25-024AS
That the City Council:
a. Adopt Plans and Specifications for the Citywide Street Pavement Rehabilitation, Capital

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Improvement Project No. ST-2025-26, Notice Inviting Bid 25-024AS.

Award Notice Inviting Bids 25-024AS to Onyx Paving Company Inc., the lowest responsive, responsible bidder, for the total bid amount of $10,963,000, and waive all minor irregularities in the bidding document as submitted by the said bidder. b.

Approve the Construction Contract with Onyx Paving Company, Inc. for the Citywide Street Pavement Rehabilitation Capital Improvement Project No. ST-2025-26 in the amount of $10,963,000.
c.

Authorize the City Manager, or his designee, to execute the Construction Contract with Onyx Paving Company, Inc. in the amount of $10,963,000, including any non-substantive extensions, change orders, purchase orders, and amendments up to 10%, which is equivalent to $1,096,300.
d.

Authorize the City Manager or his designee to issue a purchase order to Onyx Paving Company, Inc., in the amount of $10,963,000.
e.

Authorize a budgetary transfer in the amount of $651,850 from the Citywide Americans with Disabilities Act & Sidewalk Improvements Capital Improvement Project No. ST-2025-05 to the Citywide Street Pavement Rehabilitation Capital Improvement, Project No. ST-2025-26, in Measure X Fund 120.
f.

Authorize an appropriation in the amount of $2,055,754 to the Citywide Street Pavement Rehabilitation Capital Improvement Project No. ST-2025-26 from Measure A Fund 227. g.

7.11 CONSTRUCTION CONTRACT WITH R2BUILD, A CALIFORNIA CORPORATION, IN THE AMOUNT OF $4,515,720 FOR THE SOUTH MALL PARKING LOT, MAIN AND 6STREETS, PROJECT NO. ST2025-07; NOTICE INVITING BIDS 25-029-CA That the City Council:

Adopt Plans and Specifications for the South Mall Parking Lot, Main and 6th Streets, Capital Improvement Project No. ST-2025-07, Notice Inviting Bid 25-029-CA. a.

Award Notice Inviting Bids 25-029-CA to R2BUILD, a California Corporation, the lowest responsive, responsible bidder, for the total bid amount of $4,515,720, and waive all minor irregularities in the bidding document as submitted by the said bidder. b.

Approve the Construction Contract with R2BUILD for the South Mall Parking Lot, Main and 6 th Street, Capital Improvement Project No. ST-2025-07 in the amount of $4,515,720. c.

Authorize the City Manager, or his designee, to execute the Construction Contract with R2BUILD in the amount of $4,515,720, including any non-substantive extensions, change orders, purchase orders, and amendments up to 10%, which is equivalent to $451,572. d.

Authorize a budget reduction in the amount of $476,475.83 from American Rescue Plan Act Fund 413 in CIP No. ST-2025-07 South Mall Parking Lot, Main and 6th Street Project. e.

Authorize a cash transfer in the amount of $476,475.83 from the American Rescue Plan Act Fund 413 to Measure X Fund 120 as a reimbursement for City Park Revitalization Project costs.
f.

Authorize an appropriation in the amount of $677,358.53 from the Measure X Fund 120 to the South Mall Parking Lot Rehabilitation, Capital Improvement Project No. ST-2025-07. g.

7.12 PROFESSIONAL SERVICES AGREEMENT WITH Z&K CONSULTANTS FOR CONSTRUCTION

INSPECTION, LABOR COMPLIANCE, AND MATERIAL TESTING SERVICES FOR VARIOUS PROJECTS, REQUEST FOR PROPOSALS 25-021SB, IN THE AMOUNT OF $826,032 That the City Council:

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Award Notice Request for Proposals No. 25-021SB to Z&K Consultants for construction inspection, labor compliance, and materials testing services. a.

Approve the Professional Services Agreement with Z&K Consultants for the various construction projects in the amount of $826,032.
b.

Authorize the City Manager, or his designee, to execute the Professional Services Agreement with Z&K Consultants in the amount of $826,032, including any non-substantive extensions, change orders, purchase orders, and amendments up to 10% of the contract amount or $82,603 per Corona Municipal Code Section 3.08.070(I). c.

7.13 BILLBOARD RELOCATION AGREEMENT BETWEEN OUTDOOR MEDIA GROUP, INC. AND THE

CITY OF CORONA
That the City Council authorize the Mayor to execute the Billboard Relocation Agreement with Outdoor Media Group, Inc.

7.14 EXTENSION OF TIME FOR PARCEL MAP 37221
EXTENSION OF TIME FOR PARCEL MAP 37221 LOCATED AT THE SOUTHWEST CORNER OF

TEMESCAL CANYON ROAD AND PRONIO CIRCLE IN THE ENTERTAINMENT COMMERCIAL (EC) DESIGNATION OF THE DOS LAGOS SPECIFIC PLAN (SP99-03) (APPLICANT: VISTA DOS LAGOS, LLC, 2518 NORTH SANTIAGO BOULEVARD, ORANGE, CA 92867)
That the City Council approve a oneyear extension of time for Parcel Map 37221, expiring on November 3, 2025.

7.15 CONSTRUCTION CONTRACT WITH RESOURCE ENVIRONMENTAL, INC. IN THE AMOUNT OF $1,560,680 FOR THE OLD PD BUILDING DEMOLITION, CAPITAL IMPROVEMENT PROJECT NO.

FC-2023-09; NOTICE INVITING BIDS 25-015SB
That the City Council:

Adopt the Plans and Specifications for the Old PD Building Demolition, Capital Improvement Project No. FC-2023-09.
a.

Award Notice Inviting Bids 25-015SB to Resource Environmental, Inc., the lowest responsive, responsible bidder, for the total bid amount of $1,560,680, and waive all minor irregularities in the bidding document as submitted by the said bidder.
b.

Approve the Construction Contract with Resource Environmental, Inc. for the Old PD Building Demolition, Capital Improvement Project No. FC-2023-09 in the amount of $1,560,680. c.

Authorize the City Manager, or his designee, to execute the Construction Contract with Resource Environmental, Inc. in the amount of $1,560,680, including any non-substantive extensions, change orders, purchase orders, and amendments up to 10%, which is equivalent to $156,068.
d.

Authorize an appropriation in the amount of $1,109,234 from Measure X Fund 120 to the Old PD Building Demolition, Capital Improvement Project No. FC-2023-09. e.

7.16 CORONA PUBLIC LIBRARY STRATEGIC PLAN
That the City Council adopt the Corona Public Library’s Strategic Plan

7.17 RECEIVE AND FILE THE AUDITOR’S REPORTS RELATED TO THE FISCAL YEAR 2024 ANNUAL

FINANCIAL AUDITS

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That the City Council:
a. Receive and file the following annual reports:

Annual Comprehensive Financial Report of the City of Corona for the fiscal year ended June 30, 2024.
i.
ii. Trip Reduction Fund Audit Report for the fiscal year ended June 30, 2024.

Development Impact Fees (AB1600) Annual Report for the fiscal year ended June 30, 2024.
iii.
iv. Report on Voter Approved Debt for the fiscal year ended June 30, 2024. b. Receive and file the following auditor’s reports:

Auditor’s Report on Applying Agreed-Upon Procedures to Appropriations Limit Schedule for the fiscal year ended June 30, 2024.
i.

Auditor’s Report on Applying Agreed-Upon Procedures to Investments for the month ended June 30, 2024.
ii.

Auditor’s Report on Compliance with Applicable Requirement and on Internal Control over Compliance for the Housing Successor for the fiscal year ended June 30, 2024. iii.

Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements, dated November 25, 2024. iv.

Receive and file the Auditor’s Communication letter to the City Council from the City’s audit firm, The Pun Group, LLP, dated November 25, 2024.
c.

8. COMMUNICATIONS FROM THE PUBLIC
Persons wishing to address the City Council are requested to state their name and city of residence for the record. This portion of the agenda is intended for general public comment only, which means it is limited to items within the subject matter jurisdiction of the City Council that are not listed on the agenda. Please note that state law prohibits the City Council from discussing or taking action on items not listed on the agenda. The City Council will appreciate your cooperation in keeping your comments brief. Please observe a three-minute limit for communications.

9. PUBLIC HEARINGS
This portion of the agenda is for advertised public hearing items where formal public testimony on each individual item is accepted prior to City Council action.

9.1 SPECIFIC PLAN AMENDMENT 2024-0002 AMENDING THE DOWNTOWN REVITALIZATION SPECIFIC PLAN (SP98-01)
SPECIFIC PLAN AMENDMENT 2024-0002 AMENDING THE DOWNTOWN REVITALIZATION SPECIFIC PLAN (SP98-01) TO COMPREHENSIVELY AMEND THE DEVELOPMENT STANDARDS,

DESIGN GUIDELINES, AND PUBLIC STREETSCAPES FOR THE DOWNTOWN DISTRICT AND OTHER COMMERCIAL AND BUSINESS PARK DISTRICTS OF THE SPECIFIC PLAN; EXPAND THE

BOUNDARY OF THE SPECIFIC PLAN, SOUTH OF THE SOUTHERLY PORTION OF GRAND BOULEVARD, TO INCLUDE EXISTING RESIDENTIAL PROPERTIES; REPLACE OUTDATED

INFORMATION AND CHANGE THE APPEARANCE AND GRAPHICS OF THE SPECIFIC PLAN DOCUMENT (APPLICANT: CITY OF CORONA)
That the City Council:

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Approve Specific Plan Amendment 2024-0002, as recommended by the Planning and Housing Commission.
a.

Introduce, by title only, and waive full reading of consideration of Ordinance No. 3407, first reading of an ordinance adopting an addendum to the Environmental Impact Report for the Corona General Plan Technical Update (SCH # 2018081039) and the Environmental Impact Report for the Corona Redevelopment/ Downtown Specific Plan (SCH # 97071021), approving an amendment to the Downtown Revitalization Specific Plan (SP98-01) to: (1) comprehensively amend the development standards, design guidelines and public streetscapes; (2) expand the boundaries of the Specific Plan; and (3) amend and add corresponding changes to associated text and exhibits within the Specific Plan (SPA2024- 0002).
b.

9.2 ORDINANCE AMENDING CHAPTER 16.21 OF THE CORONA MUNICIPAL CODE ORDINANCE AMENDING CHAPTER 16.21 OF THE CORONA MUNICIPAL CODE TO UPDATE THE

WESTERN RIVERSIDE COUNTY TRANSPORTATION UNIFORM MITIGATION FEE (TUMF)

PROGRAM AND RESOLUTION ADOPTING THE TUMF SCHEDULE APPLICABLE TO ALL DEVELOPMENTS IN THE CITY OF CORONA ACCORDING TO THE TUMF NEXUS STUDY 2024

UPDATE PREPARED BY THE WESTERN RIVERSIDE COUNCIL OF GOVERNMENTS That the City Council:

Introduce, by title only, and waive full reading of consideration of Ordinance No. 3406, the first reading of an ordinance, approving an amendment to Chapter 16.21 of the Corona Municipal Code to update the Western Riverside County Transportation Uniform Mitigation Fee (TUMF) program.
a.

Approve Resolution 2024-109 adopting the TUMF schedule applicable to all developments in the City of Corona according to the TUMF Nexus Study 2024 Update prepared by the Western Riverside Council of Governments.
b.

10. ADMINISTRATIVE REPORTS
The portion of the agenda is for Council discussion and action on staff reports and new topics that may not be routine status reports, or documents covering previous City Council action.

10.1 VICE MAYOR STEINER’S REQUEST FOR THE CITY COUNCIL TO CONSIDER THE

INSTALLATION OF AUTOMATED TIMED GATES AT THE ENTRANCES TO THE SIERRA BELLA

PARK PARKING LOT
That the City Council provide direction on the installation of an automated timed gate system at the entrances to the Sierra Bella Park Parking lot.

11. LEGISLATIVE MATTERS
The portion of the agenda is for proposed ordinances presented for the City Council's consideration.

12. REPORTS FROM BOARDS AND COMMISSIONS
This portion of the agenda lists items from Commissions and Boards from the City Council, Commissioners, and Staff.

12.1 Library Board of Trustees

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12.2 Planning & Housing Commission

12.3 Parks & Recreation Commission

12.4 Regional Meetings

12.4.a UPDATE FROM WES SPEAKE ON THE OWOW STEERING COMMITTEE MEETING OF NOVEMBER 21, 2024

12.4.b UPDATE FROM JIM STEINER ON THE RIVERSIDE TRANSIT AGENCY (RTA) BOARD MEETING OF NOVEMBER 21,2024

12.4.c UPDATE FROM TONY DADDARIO ON THE WESTERN RIVERSIDE COUNTY REGIONAL CONSERVATION AUTHORITY (RCA) MEETING OF DECEMBER 2, 2024

13. CITY ATTORNEY'S REPORTS AND COMMENTS

14. CITY MANAGER'S REPORTS AND COMMENTS

15. CITY COUNCIL MEMBERS' REPORTS AND COMMENTS

16. FUTURE AGENDA ITEMS
This portion of the agenda is for items requested by the Mayor, Council Members or Staff for consideration at a future meeting. No immediate action is taken on Future Agenda Items; this section serves to highlight topics that will be considered at upcoming meetings. Council action on items that have appeared in this section takes place under Administrative Reports, when accompanied by a staff report.

1. Historic Civic Center Operations Plan (Staff) January 2025

2. Street Moratorium (Staff) March 2025

3. Update to the Historic Resources Inventory (W. Speake) TBD Policy allowing request of the placement of No Parking signs in red zones around school (W. Speake) TBD

4. 5. City Logo Usage Policy (T. Daddario) TBD

17. ADJOURNMENT
The next regular meeting of the City Council is scheduled for December 18, 2024 or thereafter as noted on the posted agenda for closed session items in the City Council Board Room followed by the regular meeting at 4:30 p.m. or thereafter as noted on the posted agenda in the City Council Chambers.

This meeting is being conducted in person as well as via teleconference. For members of the public wishing to submit written comments, please email comments to the City Clerk at [email protected] prior to the City Council meeting and your comments will be made part of the official record of proceedings.

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the ADA Coordinator at (951) 736-2235. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

Meeting is Being Recorded.

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DRAFT
1 City of Corona
City Council Minutes
Wednesday, November 20, 2024, 6:30 p.m.

Closed Session- Council Board Room
Council Present: Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, Wes Speake
_____________________________________________________________________

1. CONVENE CLOSED SESSION
Closed Session Convened at 4:30 p.m. for the purposes listed below. Present were Mayor Richins, Vice Mayor Steiner, Council Member Casillas, Council Member Daddario, and Council Member Speake. Closed Session adjourned at 6:33 p.m.

1.1 CONFERENCE WITH LEGALCOUNSEL-ANTICIPATED LITIGATION Pursuant to Government Code Section 54956.9(d)(2)
Significant Exposure to Litigation (Mobilehome Rent Control; 1 or more cases)

1.2 CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Pursuant to Government Code Section 54956.8
Property: 1045 Auburndale Street
Agency Negotiator: Jacob Ellis, City Manager
Negotiating Party: Corona Norco Family YMCA
Under Negotiation: Price and Terms of Payment

1.3 CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency Designated Representative: Jacob Ellis, City Manager Employee Organizations: Corona Executive Group Employees, Corona Firefighters Association IAFF Local #3757 (CFA), Corona Management/Confidential Group Employees, Corona Police Employees Association (CPEA), Corona Police Supervisors Associate (CPSA), Corona Public Service Employees Association (CPSEA), and Corona Supervisors Association (CSA)

1.4 CONFERENCE WITH LABOR NEGOTIATORS
Pursuant to Government Code Section 54957.6
Agency Designated Representative: Tom Richins, Mayor
Unrepresented Employees: City Manager and City Attorney

2. INVOCATION - Pastor Shannon Scott, Grace Baptist Church The Invocation was led by Pastor Shannon Scott, Grace Baptist Church.

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DRAFT
2 3. PLEDGE OF ALLEGIANCE - Deston Hamelin
The Pledge of Allegiance was led by Deston Hamelin.

4. CONVENE OPEN SESSION
Mayor Richins called the meeting to order at 6:36 p.m.

5. PROCLAMATIONS/RECOGNITIONS/PRESENTATIONS

5.1 PROCLAMATION: GRIEVING CHILDREN MONTH
Victoria Stephens with Stephens Center accepted the Proclamation.

5.2 RECOGNITION: BOB MAUGER
Bob Mauger, Corona High School Teacher, accepted the Recognition.

5.3 PRESENTATION: MCKINLEY STREET GRADE SEPARATION UPDATE Savat Khamphou, Public Works Director, introduced the item. The consultants and staff provided an update.

Joe Morgan, resident, addressed the Council and expressed concerns with the McKinley Street Grade Separation update.

6. MEETING MINUTES

6.1 MINUTES – NOVEMBER 6, 2024
Moved by: Jim Steiner
Seconded by: Tony Daddario
Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7. CONSENT CALENDAR
The Consent Calendar was approved with the exception of Items 7.3, 7.4, 7.7, 7.8, 7.10,

7.11, and 7.14, which were voted on separately.

Moved by: Wes Speake
Seconded by: Jacque Casillas
Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake MotionAPPROVED (5 to 0)

7.1 CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY OF THE CITY OF CORONA, CORONA PUBLIC FINANCING

AUTHORITY, CORONA UTILITY AUTHORITY, AND CORONA HOUSING

AUTHORITY TO RECEIVE AND FILE THE MONTHLY INVESTMENT
PORTFOLIO REPORT FOR SEPTEMBER 2024
This Financial Report was received and filed.

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3 7.2 CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY OF THE CITY OF CORONA, CORONA PUBLIC FINANCING

AUTHORITY, CORONA UTILITY AUTHORITY, AND CORONA HOUSING

AUTHORITY TO RECEIVE AND FILE THE MONTHLY FISCAL REPORT FOR THE MONTH OF SEPTEMBER 2024
This Financial Report was received and filed.

7.3 CONSTRUCTION CONTRACT WITH CROSSTOWN ELECTRICAL & DATA, INC. IN THE AMOUNT OF $7,867,898 FOR THE CITYWIDE TRAFFIC SIGNAL OPTIMIZATION, CAPITAL IMPROVEMENT PROJECT NO. ST-2022-03 Savat Khamphou, Public Works Director, provided a report. Council Member Daddario and Council Member Speake had inquiries. Mr. Khamphou and Jacob Ellis, City Manager, and Aaron Cox, Senior Engineer Traffic, provided clarification.

Moved by: Wes Speake
Seconded by: Jim Steiner
That the City Council:
a. Approve the Construction Contract with Crosstown Electrical & Data, Inc., for the Citywide Traffic Signal Optimization, Capital Improvement Project No. ST-2022-03 in the amount of $7,867,898.
b. Adopt the Plans and Specifications for the Citywide Traffic Signal Optimization, Capital Improvement Project No. ST-2022-03, Notice Inviting Bids 25-016CA.
c. Award Notice Inviting Bids 25-016CA to Crosstown Electrical & Data, Inc., the lowest responsive, responsible bidder, for the total bid amount of $7,867,898, and waive all minor irregularities in the bidding document as submitted by said bidder.
d. Authorize the City Manager, or his designee, to execute the Construction Contract with Crosstown Electrical & Data, Inc., in the amount of $7,867,898, including any non-substantive extensions, change orders, purchase orders, and amendments up to 10% or $786,789.
e. Authorize an appropriation in the amount of $1,573,580 from General Fund 110 to the Citywide Traffic Signal Optimization, Capital Improvement Project No. ST-2022-03.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.4 APPROVE THE ACCEPTANCE OF ADDITIONAL TRANSPORTATION

UNIFORM MITIGATION FEES ADMINISTERED BY WESTERN RIVERSIDE

COUNCIL OF GOVERNMENTS FOR THE MCKINLEY STREET GRADE
SEPARATION, CAPITAL IMPROVEMENT PROJECT NO. ST-2012-01.

Council Member Casillas provided comments.

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4 Joe Morgan, resident, addressed the Council to express his concerns with the proposed item.

Moved by: Jacque Casillas
Seconded by: Tom Richins
That the City Council:
a. Authorize the acceptance of Transportation Uniform Mitigation Fees funds from Western Riverside Council of Governments in the amount of $11,223,000 for the McKinley Street Grade Separation Capital Improvement Project No. ST-2012-01.
b. Authorize the City Manager, or his designee, to execute the Third Amendment to the Funding Agreement between the City and Western Riverside Council of Governments that allocates an additional $11,223,000 from available Transportation Uniform Mitigation Fees funds to the McKinley Street Grade Separation Project.
c. Authorize a revenue increase in the amount of $11,223,000 in the TUMF – WRCOG Fund 479 and appropriate the same amount to the McKinley Street Grade Separation Capital Improvement Project No. ST-2012-01.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.5 APPROVE VARIOUS AMENDMENTS TO THE PSA FOR THE MCKINLEY

STREET GRADE SEPARATION PROJECT
This Agreement was approved.

Council Member Speake recused himself.

That the City Council:
a. Approve the Second Amendment to the Professional Services Agreement with Falcon Engineering Services, Inc. to increase the total compensation by $2,933,461 for a total agreement amount of $13,428,082, allow for increased hourly rates for the remaining term, and extend the agreement term to December 31, 2026, to provide continued project management services through construction completion and closeout for the McKinley Street Grade Separation, Project No. 2012-01.
b. Authorize the City Manager, or his designee, to execute the Second Amendment to the Professional Services Agreement with Falcon Engineering Services, Inc. and issue a change order for $2,933,461. c. Approve the Third Amendment to the Professional Services Agreement with Mark Thomas and Company, Inc. to increase the total compensation by $445,280 for a total agreement amount of $4,103,565, allow for increased hourly rates for the remaining term, and extend the agreement term to December 31, 2026, to provide continued program management

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5 services through construction completion and project closeout for the McKinley Street Grade Separation, Project No. 2012-01.
d. Authorize the City Manager, or his designee, to execute the Third Amendment to the Professional Services Agreement with Mark Thomas and Company, Inc. and issue a change order for $445,280. e. Approve the Fifth Amendment to the Professional Services Agreement with Biggs Cardosa Associates, Inc. to increase the total compensation by $345,710 for a total agreement amount of $13,819,429, allow for increased hourly rates for the remaining term, and extend the agreement term to December 31, 2026, to provide continued design and construction support services through completion for the McKinley Street Grade Separation, Project No. 2012-01.
f. Authorize the City Manager, or his designee, to execute the Fifth Amendment to the Professional Services Agreement with Biggs Cardosa Associates, Inc. and issue a change order for $345,710. g. Approve the First Amendment to the Professional Services Agreement with RailPros to increase the total compensation by $300,000 for a total agreement amount of $600,000 and extend the agreement term to December 31, 2025, to provide continuing necessary flagging services for the McKinley Street Grade Separation, Project No. 2012-01. h. Authorize the City Manager, or his designee, to execute the First Amendment to the Professional Services Agreement with RailPros Field Services, Inc. and issue a change order for $300,000 with RailPros Field Services, Inc.

7.6 APPROVAL OF FINAL MAP, IMPROVEMENT AGREEMENT, AND
SURVEYMONUMENTS AGREEMENT FOR TENTATIVE TRACT MAP 37980

LOCATED ON THE NORTHWESTCORNER OF CITRON STREET AND

TAYLOR AVENUE
This Agreement was approved.

That the City Council:
a. Approve the Final Map for Tentative Tract Map 37980. b. That the City Council authorize the City Manager, or his designee, to execute public improvements and survey monumentation agreements between the City of Corona and FGP Tricon Citron Corona Property LLC.

7.7 PURCHASE ORDER TO CITY ELECTRIC SUPPLY FOR THE PURCHASE OF 750-KILOVOLT AMP PAD-MOUNTED TRANSFORMERS
Tom Moody, Director of Utilities, provided a report. The Council had inquiries, Mr.

Moody provided clarification.

Moved by: Jim Steiner
Seconded by: Wes Speake
That the City Council:

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6 a. Authorize the City Manager, or his designee, to issue a purchase order to City Electric Supply in the amount of $148,940.21 for the purchase of three (3) 750-Kilovolt Amp Pad Mounted Transformers.
b. Determine, under Corona Municipal Code "Section 3.08.140 (E), that competitive bidding has been satisfied based upon reasons provided in the “Basis for determination of competitive bidding” section of this report. c. Authorize the City Manager, or his designee, to approve and execute any documents necessary to implement change orders up to the amount authorized by Corona Municipal Code Section 3.08.080 (I).

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.8 RESOLUTION AUTHORIZING THE SUBMITTAL OF APPLICATION TO THE

CALIFORNIA STATE WATER RESOURCES CONTROL BOARD FOR

DRINKING WATER STATE REVOLVING FUND FINANCIAL ASSISTANCE FOR

THE PFAS REMOVAL PROJECT
Council Member Casillas provided comments.

Moved by: Jacque Casillas
Seconded by: Wes Speake
That the City Council:
a. Adopt Resolution No. 2024-105, authorizing the Director of Utilities to serve as Corona’s authorized representative in seeking financial assistance and, if awarded, authorizing the acceptance of such financial assistance on behalf of the City and amending the budget for the applicable fiscal year accordingly.
b. Adopt Resolution No. 2024-106, declaring the City’s intention to comply with all conditions of the California State Water Resources Control Board’s Drinking Water State Revolving Fund loan program reimbursement resolution requirements for the PFAS Removal Project. c. Designate the City Manager, or his designee, to receive and spend the California State Water Resources Control Board Drinking Water State Revolving Fund financial assistance funds in accordance with all applicable program guidelines and state and federal laws. d. Authorize the City Manager, or his designee, to act as an agent with legal authority to enter into the agreement, conduct all negotiations, execute and submit all documents including, but not limited to, applications, agreements, payment requests, and any other required correspondence which may be necessary for the completion of the program that is consistent with or in furtherance of the City Council’s actions hereunder.

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7 e. Authorize the City Manager, or his designee, to prepare and process any budgetary adjustments to receive and record the Drinking Water State Revolving Fund financial assistance funds.

That the Corona Utility Authority review, ratify, and, to the extent necessary, direct that the City Council take the above actions.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.9 FUNDING AGREEMENT WITH RIVERSIDE COUNTY FLOOD CONTROL AND

WATER CONSERVATION DISTRICT FOR THE COLDWATER CANYON

RECHARGE STUDY
This Agreement was approved.

That the City Council:
a. Approve the creation of an Operating and Maintenance Project entitled “Coldwater Canyon Recharge Study.”
b. Appropriate $250,000 to the new Operating and Maintenance Project, Coldwater Canyon Recharge Study and increase estimated revenues by the same amount within the Water Utility Fund 570.
c. Approve the Funding Agreement for the Coldwater Canyon Recharge Study with the Riverside County Flood Control and Water Conservation District in an amount not to exceed $250,000.
d. Authorize the City Manager, or his designee, to execute the Funding Agreement including any non-substantial changes or amendments to the agreement.

That the Corona Utility Authority review, ratify, and to the extent necessary, direct that the City Council take the above actions.

7.10 CREATION OF A CAPITAL IMPROVEMENT PROJECT ENTITLED “CORONA LANDFILL SOLAR FARM”
Tom Moody, Utilities Director, provided an update.

The Council provided comments and had inquiries. Mr. Moddy and Jacob Ellis, City Manager, provided clarification.

Moved by: Wes Speake
Seconded by: Jacque Casillas
That the City Council:
a. Approve the creation of a Capital Improvement Project entitled “Corona Landfill Solar Farm.”
b. Appropriate $50,000 from the General Fund 110 to the newly created Capital Improvement Project entitled “Corona Landfill Solar Farm.”

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8 Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.11 APPROVAL OF THE FIRST AMENDED AND RESTATED MERCY HOUSE

AGREEMENT AND THE COUNTY OF RIVERSIDE ARPA AND HHIP GRANT AGREEMENTS.

Karen Roper, Homeless Solution Manager, and Tanya Torno, Deputy Director of Housing and Workforce Solutions, provided a report.

The Council provided comments.

Don Fuller, commended the Council and staff for all their work on homeless solutions.

Moved by: Jim Steiner
Seconded by: Tony Daddario
a. Approve the First Amended and Restated Professional Services Agreement with Mercy House for Corona’s Homeless System of Services, retroactive from July 1, 2024 to June 30, 2025, in the total maximum compensation amount of $8,279,868.
b. Authorize the City Manager, or his designee, to execute the First Amended and Restated Professional Services Agreement with Mercy House.
c. Authorize the City Manager, or his designee, to approve non-substantive amendments to the First Amended and Restated Professional Services Agreement with Mercy House, including periodic updates to the HOME TBRA Guidelines (Exhibit 6) and the Shelter Operations Plan (Exhibit 7) which are more operational and procedural in nature as well as budget line-item adjustments so long as any such amendments will not cause the City to exceed the approved total maximum compensation of $8,279,868 for the First Amended and Restated Agreement.
d. Approve the County of Riverside American Rescue Plan Act (ARPA) Grant Agreement for a restrictive covenant term of fifteen years effective April 9, 2024 to December 1, 2038 in the amount of $1,000,000 with a full expenditure deadline of December 31, 2024.
e. Authorize the City Manager, or his designee, to execute the County of Riverside American Rescue Plan Act (ARPA) Grant Agreement. f. Authorize the City Manager, or his designee, to approve non-substantive amendments and term changes to the County of Riverside American Rescue Plan Act (ARPA) Grant Agreement including line-item adjustments so long as any such amendments will not cause the City to exceed the grant maximum of $1,000,000.
g. Approve the County of Riverside Housing and Homelessness Incentive Program (HHIP) Grant Agreement for a term effective July 1, 2024 to June 30, 2025 in the amount of $400,000.

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9 h. Authorize the City Manager, or his designee, to execute the County of Riverside Housing and Homelessness Incentive Program (HHIP) Grant Agreement.
i. Authorize the City Manager, or his designee, to approve non-substantive amendments and term changes to the County of Riverside Housing and Homelessness Incentive Program (HHIP) Grant Agreement including lineitem adjustments so long as any such amendments will not cause the City to exceed the approved grant maximum of $400,000.
j. Authorize an appropriation and estimated revenue increase in the amount of $1,400,000 in the General Fund 110 for the County of Riverside’s American Rescue Plan Act (ARPA) Grant and Housing and
Homelessness Incentive Program (HHIP) Grant Agreements.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.12 RELEASE OF GRADING SECURITY POSTED BY NANCI INVESTMENTS, INC., FOR 1345 QUARRY STREET
This release of Grading and Erosion Control Securities was approved.

That the City Council release the Grading and Erosion Control Securities posted for 1345 Quarry Street. (Bond No. 4405768 and Receipt No. DEP16-0062)

7.13 RELEASE OF RETAINING WALL SECURITY POSTED BY VISTA MONTEREY 91 LLC, A DELAWARE LIMITED LIABILITY COMPANY FOR PARCEL MAP 35661 LOCATED BETWEEN PROMENADE AVENUE AND THE 91 FREEWAY,

WEST OF THE EXISTING CORONA HILLS PLAZA SHOPPING CENTER This Agreement was approved.

That the City Council release the retaining wall security associated with Parcel Map 35661. (Bond No. 800018783)

7.14 APPROVAL OF CORONA DEL REY APARTMENTS PASS THROUGH

FUNDING AGREEMENT
Council Member Speake provided comments and had inquiries. Donna Finch, Community Services Director, provided clarification.

Moved by: Jacque Casillas
Seconded by: Tom Richins
That the City Council:
a. Approve the Corona Del Rey Apartments Pass Through Agreement and authorize the City Manager, or his designee, to take actions necessary in furtherance of this action.
b. Approve the Corona De Oro Apartments Pass Through Agreement and authorize the City Manager, or his designee, to take actions necessary in furtherance of this action.

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10 c. Approve the First Amendment to the Corona De Oro Apartments Regulatory Agreement and authorize the City Manager, or his designee, to take actions necessary in furtherance of this action. d. Authorize an appropriation and estimated revenue increase in the amount of $8,000,000 to the Community Services Department’s operating budget within the Low Mod Income Housing Asset Fund 291 to disburse these grants funds in accordance with the two Pass Through Agreements.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

7.15 RESOLUTION DECLARING THE CITY’S INTENTION TO ANNEX TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 2016-3 (MAINTENANCE

SERVICES) AND ADOPTING A MAP OF THE AREA PROPOSED TO BE ANNEXED THERETO (ANNEXATION NO. 41)
This Resolution was adopted.

That the City Council adopt Resolution No. 2024-104, declaring intention to annex territory to Community Facilities District No. 2016-3 (Maintenance Services) of the City of Corona, and adopting a map of the area proposed to be annexed thereto (Annexation No. 41).

7.16 RESOLUTION DECLARING THE CITY’S INTENTION TO ANNEX TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 2016-3 (MAINTENANCE

SERVICES) AND ADOPTING A MAP OF THE AREA PROPOSED TO BE ANNEXED THERETO (ANNEXATION NO. 41)
This Resolution was adopted.

7.17 RESOLUTION DECLARING THE CITY’S INTENTION TO ANNEX TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 2016-3 (MAINTENANCE

SERVICES) AND ADOPTING A MAP OF THE AREA PROPOSED TO BE ANNEXED THERETO (ANNEXATION NO. 40)
This Resolution was adopted.

That the City Council adopt Resolution No. 2024-103, declaring intention to annex territory to Community Facilities District No. 2016-3 (Maintenance Services) of the City of Corona, and adopting a map of the area proposed to be annexed thereto (Annexation No. 40).

8. COMMUNICATIONS FROM THE PUBLIC
Maddy Paxton, resident, addressed the Council to commend them on the State of the City. She provided an overview of the Riverside Sheriffs Department's K9 awards. She

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11 also expressed concerns with the voting display and the lack of acknowledgment for the Holocaust survivor, Yetta Kane.

Cherise Leonard, Friends of the Library, addressed the Council to express her appreciation for Libraries.

Mina Arnold, resident, addressed the Council to provide an overview on Trauma Intervention Program (TIP). She also encouraged residents to attend the TIP Training on January 23, 2025.

Joe Morgan, resident, addressed the Council to provide an overview on the Circle City Ride Out.

9. PUBLIC HEARINGS

9.1 PUBLIC HEARING FOR CITY COUNCIL AND CORONA UTILITY AUTHORITY CONSIDERATION OF ORDINANCE NO. 3405 MODIFYING THE BUDGET

BASED WATER STRUCTURE AND ESTABLISHING RATES FOR POTABLE WATER, RECLAIMED WATER, AND SEWER SERVICE FEES AND CHARGES.

Katie Hockett, Assistant Director of Utilities, provided a report.

Mayor Richins opened the public hearing.

The following residents addressed the Council in opposition of the proposed item: Joe Morgan, Kevin Fritzsche, Bill Gagno, Sean Brauner, Lenore Law, Kristy Snow, Oscar Romero, Carla Burger, Ray Mogel, Alan Foate, and Christopher Dixon.

The Council had inquiries and Tom Moody, Director of Utilities, provided clarification.

Sylvia Edwards, City Clerk, stated there was 258 protest letters received from the public opposing the proposed water and sewer rate adjustments.

Mayor Richins closed the public hearing.

The Council provided comments.

Moved by: Jacque Casillas
Seconded by: Tom Richins
That the City Council:
a. Introduce, by title only, and waive full reading of Ordinance No. 3405 first reading of an ordinance modifying the budget based water rate structure and establishing rates for potable water, reclaimed water, and sewer service fees and charges.
b. Authorize estimated revenue increases in the amount of $2,879,473 in the Water Utility Fund 570 and $1,852,278 in the Sewer Utility Fund 572, for the remainder of Fiscal Year 2025.

That the Corona Utility Authority review, ratify, and to the extent necessary, direct that the City Council take the above actions.

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12 Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

9.2 PUBLIC HEARING FOR CONSIDERATION OF A RESOLUTION AMENDING

THE SCHEDULE OF USER/SERVICE FEES FOR THE PROVISION OF

ELECTRIC ENERGY TO UPDATE RATES AND TARIFFS AND TO MAKE

RELATED ADJUSTMENTS TO THE ELECTRIC ENERGY RULES AND

REGULATIONS
Mayor Richins opened the Public Hearing. Sylvia Edwards, City Clerk, stated there was no correspondence received from the public. Mayor Richins closed the Public Hearing.

Moved by: Wes Speake
Seconded by: Jacque Casillas
That the City Council:
a. Hold a public hearing regarding the updated Schedule of User/Service Fees for the Provision of Electric Energy and updated Electric Energy Rules and Regulations.
b. Adopt Resolution 2024-108, amending the Schedule of User/Service Fees for the Provision of Electric Energy to update the tariffs with proposed rates and rate structures per the 2024 greenfield electric rate study and to make related adjustments to the Electric Energy Rules and Regulations.
c. Authorize an estimated revenue increase in the amount of $209,580 in the Greenfield Electric Fund 578 for the remainder of Fiscal Year 2025.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

10. ADMINISTRATIVE REPORTS

10.1 REQUEST FROM COUNCIL MEMBER STEINER FOR ARTERIAL STREET

MEDIAN ENHANCEMENTS
Keegan Olds, CIP Supervisor, provided a report.

Vice Mayor Steiner provided comments.

That the City Council provide feedback and direction on whether to prepare a future presentation regarding arterial street median enhancements and proposed projects.

10.2 TRAVEL ADVANCE REQUEST FOR COUNCIL MEMBER JACQUE CASILLAS Council Member Casillas provided comments.

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13 Moved by: Jim Steiner
Seconded by: Wes Speake
That the City Council approve the advance request for Council Member Jacque Casillas to attend the 2024 League of Cal Cities League Leaders Workshop and Board of Directors meeting. The League of Cal Cities is covering the cost of the hotel and meals. The estimated total cost for the trip is $590.94, which is the cost of transportation.

Aye (5): Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, and Wes Speake
MotionAPPROVED (5 to 0)

10.3 VICE MAYOR STEINER’S REQUEST FOR CITY COUNCIL’S

CONSIDERATION TO ADOPT A HOMEOWNERS INSURANCE PROTECTION

RESOLUTION
Aminah Mears, Assistant to the City Manager, provided a report.

The Council provided comments.

That City Council directs staff to draft a Homeowners Insurance Protection Resolution for Council adoption.

10.4 REQUEST FROM COUNCIL MEMBER SPEAKE FOR THE CITY COUNCIL TO

CONSIDER AN ORDINANCE PREVENTING UNSOLICITED ADVERTISING OF

PRINTED MATERIALS ON PRIVATE PROPERTY
Aminah Mears, Assistant to the City Manager, provided a report.

The Council provided comments.

That the City Council use its discretion in directing staff to invest time and resources into researching and drafting an ordinance regulating unsolicited advertising materials at this time.

11. LEGISLATIVE MATTERS
None.

12. REPORTS FROM BOARDS AND COMMISSIONS

12.1 Library Board of Trustees
None.

12.2 Planning & Housing Commission
None.

12.3 Parks & Recreation Commission
This Parks & Recreation Commission report was received and filed.

12.3.a UPCOMING EVENTS

12.3.b HALLOWEEKEND EVENT

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14 12.3.c ENTERTAINMENT SURVEY RESULTS

12.3.d RECREATION PARTICIPATION

12.3.e CORONA BEAUTIFUL

12.3.f FOREST AND TRAILS UPDATES

12.3.g SEE CLICK FIX FY25 FIRST QUARTER

12.3.h PARKS CAPITAL IMPROVEMENT PROJECTS FY 2024-25

12.4 Regional Meetings

12.4.a UPDATE FROM COUNCIL MEMBER WES SPEAKE ON THE SOUTHERN

CALIFORNIA ASSOCIATION OF GOVERNMENTS (SCAG)
TRANSPORTATION POLICY COMMITTEE OF NOVEMBER 7, 2024
Council Member Speake provided an update.

12.4.b UPDATE FROM COUNCIL MEMBER WES SPEAKE ON THE RIVERSIDE

COUNTY TRANSPORTATION COMMISSION (RCTC) MEETING OF
NOVEMBER 13, 2024
Council Member Speake provided an update.

13. CITY ATTORNEY'S REPORTS AND COMMENTS
None.

14. CITY MANAGER'S REPORTS AND COMMENTS
None.

15. CITY COUNCIL MEMBERS' REPORTS AND COMMENTS
Council Member Daddario provided an update on the Veterans Memorial at the Riverside National Cemetery. He commended the Communications Team for the State of the City. He also announced a local Book and Record Store.

Council Member Speake announced the upcoming Dos Lagos and the Crossings Holiday Lighting event on November 30, 2024. He commended the Communications Team for the State of the City.

Vice Mayor Stiener announced an upcoming Santa Ana River Trail meeting.

Mayor Richins commended the Communications Team.

15.1 DESIGNATE REPRESENTATIVE TO PARTICIPATE ON AD HOC COMMITTEE

FOR FIELD RATES
Council Member Daddario was designated to serve on the Ad Hoc Committee for field rates.

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15 meetings. Council action on items that have appeared in this section takes place under Administrative Reports, when accompanied by a staff report.

1. Historic Civic Center Operations Plan (Staff) January 2025

2. Street Moratorium (Staff) March 2025

3. Update to the Historic Resources Inventory (W. Speake) TBD

4. Sierra Bella Park - Gate Installation (J. Steiner) TBD

5. Policy allowing request of the placement of No Parking signs in red zones around school (W. Speake) TBD

17. ADJOURNMENT
The next scheduled meeting of the Council is on December 4, 2024. Mayor Richins adjourned the meeting at 10:13 p.m.

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1 City of Corona
City Council Minutes- Final
Wednesday, November 20, 2024, 3:00 p.m.

Closed Session- Council Board Room
Council Present: Tom Richins, Jim Steiner, Jacque Casillas, Tony Daddario, Wes Speake
_____________________________________________________________________

1. PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Daniell Whittington, Library Manager.

2. CONVENE OPEN SESSION
Mayor Richins called the meeting to order at 3:04 p.m.

3. COMMUNICATIONS FROM THE PUBLIC
Juan Ramirez, resident, addressed the Council to express concerns with the James Street project.

4. AGENDA ITEMS

4.1 CORONA PUBLIC LIBRARY STRATEGIC PLAN
Daniell Whittington, Library Manager, introduced Debbie Joy, Strategic Planner, who provided a presentation highlighting the following: Corona Public Library Strategic Plan, Goal, Approach to Strategic Planning, Research Process, Date Sources, Goal 1 Strong Collection and Services, Goal 2 Innovative Spaces, Goal 3 Community Gathering, Goal 4 Library Visibility, and Next Steps.

The Council had inquiries and provided comments. Ms. Joy provided clarification.

5. ADJOURNMENT
The next scheduled meeting of the Council is on November 20, 2024, at 6:30 p.m. Mayor Richins adjourned the meeting at 3:35 p.m.

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JAMIER\06100.00100\10302614.1
DATE: 11/20/2024
TO: Honorable Mayor and City Council Members
Honorable President and Board Members
FROM: Utilities Department

REQUEST FOR CITY COUNCIL AND

CORONA UTILITY AUTHORITY ACTION
SUBJECT:

PUBLIC HEARING FOR CITY COUNCIL AND CORONA UTILITY AUTHORITY CONSIDERATION OF ORDINANCE NO. 3405 MODIFYING THE BUDGET BASED

WATER STRUCTURE AND ESTABLISHING RATES FOR POTABLE WATER, RECLAIMED WATER, AND SEWER SERVICE FEES AND CHARGES.

EXECUTIVE SUMMARY:

This staff report asks the City Council to hold a public hearing and approve Ordinance No. 3405 modifying potable water, reclaimed water, and sewer service fees and charges.

RECOMMENDED ACTION:

That the City Council:
a. Introduce, by title only, and waive full reading of Ordinance No. 3405 first reading of an ordinance modifying the budget based water rate structure and establishing rates for potable water, reclaimed water, and sewer service fees and charges. b. Authorize estimated revenue increases in the amount of $2,879,473 in the Water Utility Fund 570 and $1,852,278 in the Sewer Utility Fund 572, for the remainder of Fiscal Year 2025.

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JAMIER\06100.00100\10302614.1
That the Corona Utility Authority review, ratify, and to the extent necessary, direct that the City Council take the above actions.

BACKGROUND & HISTORY:

The City of Corona Utilities Department provides potable, reclaimed water, and sewer services to residents and business located within the City of Corona and adjacent communities. The Utilities Department is committed to providing the highest quality service to its customers 24 hours a day, 7 days a week, at the lowest possible rates. The City’s utilities rely on revenues from water service fees and charges to fund ongoing operations and maintenance of each respective system. The last water rate changes were adopted in 2020 for potable and reclaimed water. The last sewer rate changes were made in 2013. The Utilities Department is committed to containing operational costs, but costs continue to rise and are anticipated to continue to increase over the next several years.

In addition, the Utilities Department needs to invest in critical capital infrastructure replacement to maintain the operability and reliability of the systems and to avoid higher future replacement costs. In order to plan and assess the current and future financial position of the Utilities Department, the City conducted a Utilities Rate Study for water, reclaimed water, and sewer.

On April 3, 2024, City Council awarded Request for Proposals No. 24-051AS Utility Rate Study Project to Robert D. Niehaus, Inc. (RDN). On May 1, 2024, City Council received a presentation from RDN to clarify the policy objectives of City Council in preparing the Utility Rate Study. On June 5, 2024, City Council received a presentation regarding the financial plans for the water, sewer, and reclaimed water utilities and the anticipated shortfall in revenues over the next five years. On July 3, 2024, City Council received a presentation outlining options for rates for water, sewer, and reclaimed water. On August 21, 2024, City Council received a presentation by staff that provided responses to prior City Council requests and questions. On October 2, 2024, City Council received and filed the 2024 Water, Reclaimed Water, and Sewer Rate Study prepared by RDN (“Rate Study”), which included the cost of service and final proposed rates for all utilities.

ANALYSIS:

The Rate Study represents a plan for the future of the water, sewer and reclaimed water utilities over a five-year planning cycle. The Utilities Department is committed to continual monitoring of revenues and expenses to determine progress toward achievement of the plan as well as check on plan assumptions. The Rate Study calculated the revenue requirements for each utility over the next five years. It then functionalized expenses and allocated those expenses to appropriate rate categories.

For potable water and reclaimed water this includes fixed or Ready to Serve (RTS) charges and volumetric and variable Commodity Charges. The rates for the RTS charge are established based upon the size of the meter and are calculated to recover a portion of fixed costs for potable water and reclaimed water respectively.

Variable costs for potable water and reclaimed water, or Commodity charges, are based on the number of units of water delivered to a property. A unit of water is 1 CCF which is

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equal to 748 gallons or 100 cubic feet. Each customer class is provided a water budget based on standard calculations. Residential customers receive an indoor and an outdoor budget. The residential indoor budget is based on the number of people in the household, the number of dwelling units, the number of the days in the billing cycle and a prescribed number of gallons per person per day. In 2022, the State of California passed SB 1157 establishing 47 gallons per person per day as the indoor water use standard in California effective January 1, 2025. The outdoor water budget is based on the square footage of the irrigated landscaped area per parcel, the daily plant water loss, referred to as evapotranspiration, and a factor, referred to as an evapotranspiration area factor or efficiency factor. The summation of the indoor and outdoor water budgets comprises the total water budget for residential customers. Non-residential customers without a dedicated landscape meter receive a water budget based on a three-year rolling average; and customers with a dedicated landscape meter receive a water budget that is the same as the residential outdoor water budget.

The Rate Study recommended adjusting the indoor water budget calculation from 55 gallons per person per day to 47 gallons per person per day to comply with SB1157. The Rate Study also recommended eliminating the Wasteful Tier for potable water, referred to as Tier 5, for residential customers, and Tier 4 for non-residential customers as shown in Exhibit “A” of Ordinance 3405, attached. The Rate Study recommended eliminating Tier 3 and Tier 4 for the reclaimed water budgets, which would result in a two-tier structure for reclaimed water with Tier 1 reflecting the unit cost for the water budget and Tier 2 reflecting the unit cost for all consumption exceeding the water budget.

The Rate Study evaluated the current sewer rate structure and recommended an adjustment to increase equity across customer classes as well as within customers classes. Under the recommended sewer rate structure customers will only pay a bill based on their actual impact on the system. The recommended sewer rate structure includes a fixed monthly charge for all customers and a variable charge for non-residential customers. The variable charge will be assessed for each unit (CCF) of water used above 8 CCF. The City will implement a variance program for commercial customers whose water use and sewer flow may not be directly comparable. The City will review the variances on a case-by-case basis.

The proposed rates are set forth in Exhibit “A” of Ordinance No. 3405, attached to this report. If approved, the proposed rates will be effective on January 3, 2025, with scheduled annual rate increases effective each January 1st from 2026 through 2029. If the proposed rate schedule is approved, the City Council will review the schedule at a public meeting prior to the implementation of the rate increase scheduled for January 1, 2028, to assess the accuracy of the City’s cost and revenue estimates and to reaffirm that the 2028 increase remains necessary based upon the costs expended and revenues received during the first two years of the rate increases. After such review, the City Council may direct City staff to proceed with implementing the remaining scheduled rate increases in 2028 through 2029 in an amount that does not exceed the rates set forth in the proposed schedule set forth in Exhibit “A” of Ordinance No. 3405.

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Proposition 218 Process
On October 3, 2024, the City mailed a Proposition 218 notice to property owners and tenants of 41,190 parcels that receive water and reclaimed water services and 37,330 parcels that receive sewer services advising them of this public hearing and the procedure for submitting a written protest for the proposed rate changes.

The City held four community meetings to engage with the public about the proposed rates. The outreach for these meetings is summarized in the table below.

Date Type Media Type Sent to Metrics
10/28 Community Meeting
reminder (11/2)
Social Media Facebook,
Instagram,
LinkedIN
3,018
Impressions
11/1 Community Meeting
reminder (11/2)
second post
Social Media Facebook,
Instagram,
LinkedIN
2,668
Impressions
10/28 Community Meeting
reminder (11/2)
Email 22,556 12,191
Opens
11/1 Community Meeting
reminder (11/7)
Social Media Facebook,
Instagram,
LinkedIN
3,152
Impressions
11/5 Community Meeting
reminder (11/7)
second post
Social Media Facebook,
Instagram,
LinkedIN
3,919
Impressions
11/5 Community Meeting
reminder (11/7)
Email 22,341 11,714
Opens
A total of 30 people attended the community meetings to hear about the proposed water budgets and water, reclaimed water, and sewer, rate structures. Staff from the Customer Care and Utility Billing division, as well as staff from the Water Resources division, were on hand to provide real-time assistance to the community on billing questions, estimated bill information, and conservation opportunities.

Date Attendees
11/2/2024 @ 2:00 pm at City Hall 13
11/7/2024 @ 11:00 am at City Hall 12
11/7/2024 @ 6:30 pm at City Hall 5
Total 30
The City Clerk’s office accepted written protests regarding the rates via mail and email to [email protected]. A total of 58 were received as of November 7, 2024, and an updated number will be provided at the Public Hearing along with copies of all protest letters.

FINANCIAL IMPACT:

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Approval of the recommended actions will result in estimated revenue increases in the amount of $2,879,473 in the Water Utility Fund 570, and $1,852,278 in the Sewer Utility Fund 572 for the remainder of Fiscal Year 2025. There is no impact to the Reclaimed Water Utility Fund 567 because the Fiscal Year 2025 estimated revenues are higher than the adjusted revenue estimate projection. Future revenue adjustments will be submitted during the annual budget process.

ENVIRONMENTAL ANALYSIS:

This action is exempt pursuant to California Public Resources Code Section 21080(b)(8) and Section 15273 of the State CEQA Guidelines because the proposed increase in the rates for potable water, reclaimed water, and sewer services are necessary and reasonable to fund the administration, operation, maintenance, and improvements of the potable water, reclaimed water, and sewer systems and will not result in the expansion of such systems. Therefore, no further environmental analysis is required and staff will file a Notice of Exemption with the County of Riverside.

PREPARED BY: KATIE HOCKETT, ASSISTANT DIRECTOR OF UTILITIES REVIEWED BY: TOM MOODY, DIRECTOR OF UTILITIES
ATTACHMENTS:

1. Exhibit 1 – Presentation

2. Exhibit 2 – Ordinance No. 3405

3. Exhibit 3 – Proposition 218 notice

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ORDINANCE NO. 3405

AN ORDINANCE OF THE OF THE CITY OF CORONA,

CALIFORNIA, MODIFYING THE BUDGET BASED

WATER STRUCTURE AND MODIFYING RATES FOR

POTABLE WATER, RECLAIMED WATER, AND SEWER
SERVICE FEES AND CHARGES.

WHEREAS, the City of Corona (the “City”), through its Utilities Department, is charged with providing a continuous and adequate supply of safe and potable water and with developing and encouraging the use of reclaimed or recycled water to supplement existing potable water supplies and ensuring the adequate collection and treatment of sewage in compliance with the Clean Water Act, which services are funded primarily by the revenue derived from potable water, reclaimed water, and sewer service fees; and
WHEREAS, Chapters 13.14 and 13.28 of the Corona Municipal Code (“CMC”) require that the City Council establish the rates for providing potable water, reclaimed water, and sewer services; and
WHEREAS, the Utilities Department engaged the services of Robert D. Niehaus, Inc. (“RDN”) to perform an independent rate study to evaluate the infrastructure needs, programs and operations and maintenance costs of the City’s potable water, reclaimed water and sewer systems and the rates necessary to recover the costs of providing those services for the next five years; and
WHEREAS, RDN prepared the 2024 Water, Reclaimed Water, and Sewer Rate Study dated September 26, 2024 (“Rate Study”), as set forth in Exhibit “B,” attached hereto and incorporated herein by reference, which evaluates the current rates and financial data and proposes new rates for the City’s potable water, reclaimed water, and sewer services based on the cost of service principles necessary to meet the City’s financial and strategic goals; and WHEREAS, based upon the analysis in the Rate Study, it has been determined that adjustments to the rates for the City’s potable water, reclaimed water, and sewer service charges are necessary to enable the City to recover current and projected costs of operations and maintenance and critical capital infrastructure improvements need to repair and update the City’s aging water, reclaimed water, and sewer systems, maintain the operational and financial stability of the utility, comply with State and Federal mandated regulatory requirements, meet and comply with annual debt service requirements, avoid operational deficits and further depletion of reserves, and provide an equitable allocation of the costs of providing service among the various customer classes; and
WHEREAS, the proposed changes to the rates for the potable water, reclaimed water, and sewer service charges will allow the Utilities Department to continue to provide safe, reliable drinking water and sewer collections and treatment to its customers; and WHEREAS, the Utilities Department has experienced and anticipates additional

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inflationary increases to the costs to operate and maintain the City’s potable water, reclaimed water, and sewer systems (the “Systems”) and to provide ongoing repairs, replacements, and upgrades to the Systems; and
WHEREAS, without the proposed rate increases the Utilities Department would experience budget shortfalls for each year of the five-year forecast performed by RDN in the Rate Study; and
WHEREAS, California Constitution Article X, Section 2 and California Water Code Section 100 provide that because of conditions prevailing in the State of California, it is the declared policy of the State that the general welfare requires that the water resources of the State shall be put to beneficial use to the fullest extent of which they are capable, the waste or unreasonable use of water shall be prevented, and the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and the public welfare; and
WHEREAS, pursuant to California Water Code Section 106, it is the declared policy of the State that the use of water for domestic use is the highest use of water and that the next highest use is for irrigation; and
WHEREAS, pursuant to Ordinance No. 3025 and Ordinance No. 3309, the City Council previously adopted a Budget Based Water Rate Structure to implement a system of tiered water rates and charges based upon customer water budgets intended to (i) promote efficient water use and resource conservation; and (ii) proportionately allocate the cost of providing water service; and
WHEREAS, the Corona City Council has previously adopted Ordinance No. 3076 establishing sewer rates and service fees; and
WHEREAS, water budgets for residential customers, which will have four tiers and includes a budget for indoor and outdoor use, are determined on the basis of individual household factors, such as the number of people per household, the size of the irrigated landscaped area, the amount of water a typical household requires each month for indoor and outdoor use, actual daily water lost to the atmosphere by plants (evapotranspiration) and an evapotranspiration area factor (“ETAF”); and
WHEREAS, water budgets for commercial, industrial, institutional and governmental customers with non-dedicated irrigation meters are determined on the basis of each customer’s average water use during the last three years and water budgets for commercial, industrial, institutional, and governmental customers with dedicated irrigation meters are determined in the same manner as residential customers; and WHEREAS, the rate structure for the City’s monthly water service fees include the following components: (1) a Ready-to-Serve Charge imposed on residential, non-residential, and reclaimed water customers that is based on the size of the water meter serving the property; (2) a variable potable water Commodity Charge that is determined on the basis of the number of units of water delivered to the property; and (3) a reclaimed water Commodity Charge that is

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determined on the basis of the number of units of reclaimed water delivered to the property. The rate increases adopted by this Ordinance would impact both the Ready-to-Serve Charge and the Commodity Charge components of the water service fees and the reclaimed water fees; and WHEREAS, the rate structure for fire protection customers, which includes customers who are required as a condition of extending or initiating water service to install a private fire suppression system on their property and customers who have requested the delivery of water to the property for the purpose of fire service protection, is comprised of two components:
(1) a variable fire protection Commodity Charge that is determined on the basis of the number of units of water delivered to a fire protection customer through the City’s potable water system; and (2) a fixed Fireline Charge that is determined on the basis of the size of the fireline (in inches) through which water is delivered; and
WHEREAS, on September 28, 2022, the State of California passed Senate Bill No. 1157 which amended California Water Code Section 10609.4 to establish an indoor residential water use standard of 47 gallons per capita daily beginning January 1, 2025, and until January 1, 2030; and
WHEREAS, based upon the Rate Study and the requirements under California Water Code Section 10609.4, it has been determined that the indoor water budget tier should be modified to reduce the efficient indoor water use standard from 55 gallons per person per day to 47 gallons per person per day to reflect the State’s indoor water use objective; and WHEREAS, based upon the Rate Study, it has been determined that no change is required to the outdoor budget and ETAF will remain at 80%; and WHEREAS, based upon the Rate Study, it has been determined that for potable water, the water budget tiers should be revised so that inefficient use will remain at 1%-50% over water budget, and excessive use is revised to greater than 50% over water budget, and the wasteful use has been eliminated; and
WHEREAS, based upon the Rte Study, it has been determined that for reclaimed water, the water budget tiers should be revised so that all usage over water budget shall be charged at the inefficient use or Tier 2 rate; and
WHEREAS, based upon the Rate Study, it has been determined that sewer bills shall include a fixed monthly charge for all customers and a variable charge (per hundred cubic feet) for non-residential customers based on the metered water consumption for all water use exceeding 800 cubic feet (8 CCF) per month which increases equity across customer classes as well as within customer classes because customers will only pay a bill based on their actual impact on the system; and
WHEREAS, the City will implement a variance program for commercial customers whose water use and sewer flow may not be directly comparable and the City will review the variances on a case-by-case basis; and

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WHEREAS, the rates adopted by this Ordinance have been calculated to meet the cost to the city of providing the services for which the rates and fees are imposed, without generating revenue that exceeds the funds required to provide the services; and without exceeding the proportional cost of service attributable to each customer; and WHEREAS, revenues derived from the rates adopted by this Ordinance will not exceed the funds required to provide the services for which the rates and charges are imposed and shall be exclusive for maintenance and operation of the Systems and the provision of potable water, reclaimed water, and sewer services; and
WHEREAS, the rates adopted by this Ordinance will not exceed the proportional cost of the service attributable to each parcel upon which they are imposed; and WHEREAS, the rates adopted by this Ordinance will not be imposed on a parcel unless the services for which the rates and fees are imposed are actually used by, or immediately available to, the owner of the parcel; and
WHEREAS, the City, as the lead agency under the California Environmental Quality Act (“CEQA”), has determined that this Ordinance is exempt from CEQA review under Public Resources Code Section 21080(b)(8) and State CEQA Guidelines section 15273 because the rates adopted by this Ordinance are necessary and reasonable to fund the administration, operation, maintenance, and improvements of the Systems and will not result in the expansion of the Systems; and
WHEREAS, pursuant to California Constitution article XIII D, Section 6 (“Article XIII D”) at least 45 days prior to the public hearing on the proposed increase in the potable water service fees, reclaimed water services fees, and sewer service fees, the City provided written notice (the “Notice”) by mail to the record owner of each parcel upon which the rates and charges are proposed and any tenant directly liable for payment of the rates and charges, which Notice included the following information: (1) the amount of the rates and charges proposed to be imposed one each parcel; (2) the basis upon which the rates and charges were calculated; (3) the reason for the rates and charges; and (4) the date, time and location of a public hearing on the proposed rates and charges; and
WHEREAS, California Government Code Section 53756 authorizes the City to approve automatic adjustments in the potable water service fees, reclaimed water services fees, and sewer service fees as necessary to pass through increases in wholesale charges for water, sewage treatment, or wastewater treatment or adjustments for inflation, provided that the adjustments are specified in the Notice and approved pursuant to Government Code Section 53756 and Article XIII D for a period not to exceed five years; and WHEREAS, on November 20, 2024, the City Council held a duly noticed public hearing at which all persons wishing to testify in connection with the proposed increase in the potable water services fees, the reclaimed water service fees and sewer service fees were heard and all protests against the proposed rates and fees were considered; and

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WHEREAS, at the close of the hearing, the City Council determined that the City did not receive written protests against the establishment and imposition of the proposed rate increases for potable water service fees, reclaimed water service fees, or sewer service fees from a majority of the affected property owners or tenants directly liable for the payment of such fees.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CORONA
DOES ORDAIN AS FOLLOWS:

SECTION 1. The City Council finds and determines that the foregoing Recitals are true and correct and incorporates the Recitals herein.

SECTION 2. As the decision-making body for the City, the City Council has reviewed and considered the information contained in the administrative record, including all oral and written evidence presented the City Council. Based upon the facts and information contained in the administrative record, including all written and oral evidence presented to the City Council, the City Council finds this action exempt pursuant to California Public Resources Code section 21080(b)(8) and Section 15273(a) of the Guidelines for the California Environmental Quality Act (CEQA), which states that the establishment, modification, structuring, restructuring, or approval of rates, tolls, fares, or other charges by public agencies that the public agency finds are for the purpose of meeting financial reserve needs and requirements, and obtaining funds for capital projects necessary to maintain service within existing service areas is exempt from CEQA. The City Council hereby finds that the administration, operation, maintenance, and improvements of the Systems, which are to be funded by the potable water service fees, the reclaimed water service fees, and the sewer service fees set forth herein, are necessary to maintain service within the City’s existing service area. The City Council further finds that the administration, operation, maintenance, and improvements of the Systems, to be funded by the potable water service fees, the reclaimed water service fees, and the sewer service fees set forth herein, will not expand the Systems. Based on these findings, the City Council hereby determines that this Ordinance is exempt from the requirements of CEQA pursuant to California Public Resources Code section 21080(b)(8) and State CEQA Guidelines section 15273(a).

SECTION 3. The City Council hereby adopts the 2024 Water, Reclaimed Water, and Sewer Rate Study dated September 26, 2024, prepared by Robert D. Niehaus, Inc. attached hereto as Exhibit “B”.

SECTION 4. The documents and materials that constitute the record of proceedings on which these findings have been based are located at City of Corona, 400 S. Vicentia Avenue, Corona, California 92882. The custodian for these records is the City Clerk of the City.

SECTION 5. The City Council hereby authorizes and establishes the rates and charges for the City’s potable water service fees, including, without limitation, the fees imposed upon fire protection customers, the City’s reclaimed water service fees, and City’s sewer service fees, as set forth in Exhibit “A,” attached hereto and incorporated herein by reference, which rates and charges will be effective on January 3, 2025, with scheduled annual rate increases authorized pursuant to California Government Code Section 53756 effective on January 1, 2026, January 1, 2027, January 1, 2028, and January 1, 2029. The City Council further authorizes and approves the modifications

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to the Budget Based Water Rate Structure adopted pursuant to Ordinance No. 3025 and Ordinance 3309 as set forth in Exhibit “A”. Such rates and charges and modifications to the Budget Based Water Rate Structure shall be in effect beginning January 3, 2025. The City Council will review the rate schedule at a public meeting prior to the implementation of the rate increase scheduled for January 1, 2028, to assess the accuracy of the City’s cost and revenue estimates and to reaffirm that the 2028 increase remains necessary based upon the costs expended and revenues received during the first two years of the rate increases. After such review, the City Council may direct City staff to proceed with implementing the remaining scheduled rate increases in 2028 through 2029 in an amount that does not exceed the rates set forth in the proposed schedule set forth in Exhibit “A”. Prior to implementing any future rate increases, the Director of Utilities shall provide written notice of any such increases to customers not less than 30 days prior to the effective date of the rate increases. Any such notice may be provided in the regular billing statements of the Utilities Department customers.

SECTION 6. The City Council hereby authorizes and directs the Director of Utilities to implement and take all actions necessary to effectuate the rates adopted by this Ordinance and to file a Notice of Exemption with the County Clerk for Riverside County within five (5) working days of the date of the adoption of this Ordinance.

SECTION 7. If any section, subsection, subdivision, sentence, clause, or phrase in this Ordinance or any part thereof is for any reason held to be unconstitutional or invalid, ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have adopted each section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.

SECTION 8. This Ordinance shall supersede all other previous City Council resolutions and ordinances that may conflict with, or be contrary to, this Ordinance.

SECTION 9. The Mayor shall sign this Ordinance and the City Clerk shall attest thereto and shall within fifteen (15) days of its adoption cause it, or a summary of it, to be published in a general circulation newspaper published in the City of Corona.

SECTION 10. This Ordinance shall take effect and be in force 30 days after its adoption.

PASSED, APPROVED AND ADOPTED this ___(th) day of ________, _____.

Mayor of the City of Corona, California
ATTEST:

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City Clerk of the City of Corona, California

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CERTIFICATION
I, Sylvia Edwards, City Clerk of the City of Corona, California, do hereby certify that the foregoing Ordinance was regularly introduced at a regular meeting of the City Council of the City of Corona, California duly held on the ___(th) day of __________, _____ and thereafter at a regular meeting held on the ___(th) day of __________, _____, it was duly passed and adopted by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Corona, California, this ___(th) day of __________, _____.

City Clerk of the City of Corona, California
[SEAL]

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EXHIBIT "A"

RATES AND CHARGES FOR POTABLE WATER SERVICE FEES, RECLAIMED

WATER SERVICE FEES, AND SEWER SERVICE FEES
[SEE ATTACHED THREE (3) PAGES]

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Potable Water Budget Tier Modifications
Residential Customers
Water Budget Factors Current Proposed
Gallons per capita per day (GPCD) 55 47
Evapotranspiration Area Factor
(ETAF)
80% 80%
Inefficient Use Definition 1%-50% over water budget 1%-50% over water budget Excessive Use 51%-100% over water budget Greater than 50% over water budget
Wasteful Use Greater than 100% over water
budget
n/a
Potable Water Budget Tier Modifications
Non-Residential Water Customers
Water Budget Factors Current Proposed
Evapotranspiration Area Factor
(ETAF)
80% 80%
Inefficient Use Definition 1%-50% over water budget 1%-50% over water budget Excessive Use 51%-100% over water budget Greater than 50% over water budget
Wasteful Use Greater than 100% over water
budget
n/a
Current and Proposed Rates for Potable Water Commodity Charges ($/CCF) Residential Customers
Tier Tier Width Definition Current Jan 3,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
Jan 1,
2029
1 Water use up to efficient indoor water
budget
$1.93 $1.96 $2.13 $2.32 $2.53 $2.76
2 Water use up to efficient outdoor water
budget
$2.77 $3.31 $3.60 $3.93 $4.28 $4.67
3 Water use 1%-50% over water budget
(Indoor+Outdoor)
$5.48 $4.38 $4.77 $5.20 $5.67 $6.18
4 Water use greater than 50% over water
budget (Indoor+Outdoor)
$9.12 $5.22 $5.69 $6.20 $6.76 $7.36
Current and Proposed Rates for Potable Water Commodity Charges ($/CCF) Non-Residential Customers
Tier Tier Width Definition Current Jan 3,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
Jan 1,
2029
1 Water use up to efficient water
budget
$2.77 $3.31 $3.60 $3.93 $4.28 $4.67
2 Water use 1%-50% over water
budget
$5.48 $4.38 $4.77 $5.20 $5.67 $6.18
3 Water use greater than 50% over
water budget
$9.12 $5.22 $5.69 $6.20 $6.76 $7.36

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Current and Proposed Rates for Potable Water Commodity Charges ($/CCF) Non-Residential Customers with Dedicated Irrigation Meters Tier Tier Width Definition Current Jan 3,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
Jan 1,
2029
1 Water use up to efficient outdoor
water budget
$2.77 $3.31 $3.60 $3.93 $4.28 $4.67
2 Water use 1%-50% over water
budget
$5.48 $4.38 $4.77 $5.20 $5.67 $6.18
3 Water use greater than 50% over
water budget
$9.12 $5.22 $5.69 $6.20 $6.76 $7.36
Current and Proposed Rates for Potable Water Monthly Ready-to-Serve Charges ($/Meter Size in Inches)
Residential and Non-Residential
Meter Size Current Jan 3, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 5/8” $27.09 $32.79 $35.75 $38.96 $42.47 $46.29
3/4” $36.46 $42.94 $46.80 $51.02 $55.61 $60.61
1” $55.18 $63.23 $68.92 $75.12 $81.88 $89.25
1 1/2” $101.98 $113.94 $124.20 $135.38 $147.56 $160.84
2” $158.13 $174.81 $190.54 $207.69 $226.38 $246.75
3” $335.95 $367.54 $400.62 $436.67 $475.97 $518.81
4” $598.02 $651.56 $710.20 $774.12 $843.79 $919.74
6” $1,505.89 $1,635.51 $1,782.70 $1,943.15 $2,118.03 $2,308.65 8” $2,629.02 $2,852.76 $3,109.51 $3,389.36 $3,694.40 $4,026.90 10” $3,939.33 $4,272.88 $4,657.44 $5,076.61 $5,533.51 $6,031.52 Current and Proposed Rates for Monthly Fireline Charges ($/Fireline Size in Inches) Fire Protection Customers
Meter Size Current Jan 3, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 5/8” $8.60 $12.64 $13.78 $15.02 $16.37 $17.84
3/4” $8.60 $12.64 $13.78 $15.02 $16.37 $17.84
1” $8.60 $12.64 $13.78 $15.02 $16.37 $17.84
1 1/2” $8.60 $13.33 $14.53 $15.84 $17.27 $18.82
2” $9.74 $14.91 $16.25 $17.71 $19.31 $21.05
3” $10.81 $17.63 $19.21 $20.94 $22.83 $24.88
4” $16.76 $27.38 $29.84 $32.53 $35.46 $38.65
6” $32.74 $44.20 $48.18 $52.51 $57.24 $62.39
8” $60.29 $69.50 $75.76 $82.57 $90.01 $98.11
10” $101.72 $104.57 $113.98 $124.24 $135.42 $147.61
Current and Proposed Rates for Fire Protection Commodity Charges ($/CCF) Fire Protection Customers
Current Jan 3, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 $9.12 $5.22 $5.69 $6.20 $6.76 $7.36

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Reclaimed Water Budget Tier Modifications
Reclaimed Water Customers
Water Budget Factors Current Proposed
Evapotranspiration Area Factor
(ETAF)
80% 80%
Inefficient Use Definition 1%-50% over water budget Usage greater than water budget
Excessive Use 51%-100% over water budget n/a
Wasteful Use Greater than 100% over water
budget
n/a
Current and Proposed Rates for Reclaimed Water Commodity Charges ($/CCF) Reclaimed Water Customers
Tier Tier Width Definition Current Jan 3,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
Jan 1,
2029
1 Water use up to efficient outdoor
water budget
$2.14 $2.37 $2.46 $2.56 $2.66 $2.77
2 Water use over water budget $3.21 $2.60 $2.71 $2.82 $2.93 $3.05 Current and Proposed Rates for Reclaimed Water Monthly Ready-to-Serve Charges ($/Meter Size in Inches)
Reclaimed Water Customers
Meter Size Current Jan 3, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 5/8” $23.52 $26.64 $27.70 $28.81 $29.96 $31.16
3/4” $30.81 $35.95 $37.38 $38.88 $40.43 $42.05
1” $45.39 $54.57 $56.75 $59.02 $61.38 $63.84
1 1/2” $81.84 $101.12 $105.16 $109.37 $113.75 $118.30
2” $125.59 $156.98 $163.26 $169.79 $176.58 $183.65
3” $264.13 $333.88 $347.24 $361.13 $375.57 $390.60
4” $468.28 $594.58 $618.36 $643.10 $668.82 $695.57
6” $1,175.53 $1,497.70 $1,557.61 $1,619.91 $1,684.71 $1,752.10 8” $2,050.48 $2,614.96 $2,719.56 $2,828.34 $2,941.48 $3,059.14 10” $3,071.25 $3,918.44 $4,075.17 $4,238.18 $4,407.71 $4,584.02 Proposed Rates for Sewer Monthly Fixed Charges
All Sewer Customers
Jan 3, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Jan 1, 2029 $45.46 $50.01 $55.01 $60.51 $66.56
Proposed Rates for Sewer Variable Charges ($/CCF > 8 CCF of water) All Non-Residential Sewer Customers
Variable Rate Jan 3,
2025
Jan 1,
2026
Jan 1,
2027
Jan 1,
2028
Jan 1,
2029
Charged per CCF of water consumption for all
usage over 8 CCF
$5.50 $6.05 $6.66 $7.32 $8.05

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4 JAMIER\06100.00100\10302616.2
EXHIBIT “B”
2024 WATER, RECLAIMED WATER, AND SEWER RATE STUDY
[SEE ATTACHED 158 PAGES]

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CITY OF CORONA
2024 Water, Reclaimed Water, and
Sewer Rate Study
Final Report September 26, 2024

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CITY OF CORONA
2024 WATER, RECLAIMED WATER, AND SEWER RATE
STUDY

FINAL REPORT
Prepared for:

City of Corona
400 South Vicentia Avenue
Corona, CA 92882
Prepared by:

ROBERT D. NIEHAUS, INC.
140 East Carrillo Street
Santa Barbara, CA 93101
(805) 962-0611
RDN Project Number 366

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September 26, 2024
Tom Moody
Director of Utilities
City of Corona
400 South Vicentia Ave.

Corona, CA 92882
Subject: 2024 Water, Reclaimed Water, and Sewer Rate Study Dear Mr. Moody,
Robert D. Niehaus, Inc. is pleased to provide this Financial Planning, Revenue Requirements, Cost of Service, and Rate Setting Analysis report to the City of Corona for its Water, Reclaimed Water, and Sewer services. This rate study includes a financial plan to determine the revenue requirements for the next five years and a comprehensive review of the City’s current rates based on the cost of service principles. This report outlines the approach, methodology, findings, and recommendations of the study. Each of the components of this study has enhanced the equitability of the rates we propose.

The proposed rates were developed utilizing the City’s customer usage data, billing records, accounting, operating and management records, capital plans, and reserve policies. Based on the Cityprovided data, key assumptions were made for the study using appropriate resources and our econometric and financial expertise. We are confident that the rates proposed in this report are costbased and are fully compliant with Proposition 218 and other legal requirements.

It has been an absolute pleasure and honor to work with your city. We thank you, Ms. Hockett, and all additional staff who helped complete this report.

Respectfully submitted,
Robert D. Niehaus, Ph.D. Sanjay Gaur M.S., M.P.A.

Managing Director/Principal Economist - RDN Project Manager - Water Resources Economics

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i
City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

TABLE OF CONTENTS
TABLE OF CONTENTS.............................................................................................................................. i LIST OF TABLES.......................................................................................................................................iv LIST OF FIGURES.....................................................................................................................................ix EXECUTIVE SUMMARY.............................................................................................................................1

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

1.2 Purpose of Study .....................................................................................................................................3

1.3 Rate Recommendations and Proposed Rates....................................................................................3 METHODOLOGY ......................................................................................................................................11

2.1 General Methodology........................................................................................................................... 11

2.2 Legal Considerations............................................................................................................................ 12

2.3 Key Assumptions .................................................................................................................................. 16 Escalation Factors ........................................................................................................................................ 16 Customer Growth.......................................................................................................................................... 18 Reserve Policy .............................................................................................................................................. 21 Equivalent Meter Size .................................................................................................................................. 22 Debt Service Coverage Ratios ................................................................................................................... 22 WATER UTILITY .......................................................................................................................................24

3.1 Financial Plan........................................................................................................................................ 24 Demand Projections ..................................................................................................................................... 24 Revenues ....................................................................................................................................................... 25 Operating and Maintenance (O&M) Expense .......................................................................................... 26 Other Obligations.......................................................................................................................................... 26 Capital Improvement Projects..................................................................................................................... 26 Debt Service and Coverage Ratios............................................................................................................ 27 Reserves ........................................................................................................................................................ 29 Financial Plan................................................................................................................................................ 31 Revenue Requirements ............................................................................................................................... 33

3.2 Cost of Service Analysis ...................................................................................................................... 34 Functionalization of Costs ........................................................................................................................... 34 Allocation to Units ......................................................................................................................................... 42 Allocation to Customer Classes.................................................................................................................. 45

3.3 Water Rate Design ............................................................................................................................... 47

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ii
City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Monthly Fixed Charge.................................................................................................................................. 48 Monthly Fire Fixed Charge.......................................................................................................................... 49 Variable Water Rates ................................................................................................................................... 51

3.4 Bill Impact Analysis............................................................................................................................... 56 RECLAIMED WATER UTILITY ................................................................................................................57

4.1 Financial Plan........................................................................................................................................ 57 Demand Projections ..................................................................................................................................... 57 Revenues ....................................................................................................................................................... 58 Operating and Maintenance (O&M) Expense .......................................................................................... 59 Other Obligations.......................................................................................................................................... 59 Capital Improvement Projects..................................................................................................................... 59 Debt Service and Coverage Ratios............................................................................................................ 60 Reserves ........................................................................................................................................................ 61 Financial Plan................................................................................................................................................ 63 Revenue Requirements ............................................................................................................................... 65

4.2 Cost of Service Analysis ...................................................................................................................... 66 Functionalization of Costs ........................................................................................................................... 66 Allocation to Units ......................................................................................................................................... 74 Allocation to Customer Classes.................................................................................................................. 76

4.3 Reclaimed Water Rate Design ........................................................................................................... 78 Monthly Fixed Charge.................................................................................................................................. 79 Variable Reclaimed Water Rates ............................................................................................................... 80

4.4 Bill Impact Analysis............................................................................................................................... 82 SEWER UTILITY .......................................................................................................................................84

5.1 Financial Plan........................................................................................................................................ 84 Revenues ....................................................................................................................................................... 84 Operating and Maintenance (O&M) Expense .......................................................................................... 85 Other Obligations.......................................................................................................................................... 86 Capital Improvement Projects..................................................................................................................... 86 Debt Service and Coverage Ratios............................................................................................................ 87 Reserves ........................................................................................................................................................ 88 Financial Plan................................................................................................................................................ 90 Revenue Requirements ............................................................................................................................... 92

5.2 Cost of Service Analysis ...................................................................................................................... 93

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City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Functionalization of Costs ........................................................................................................................... 93 Allocation to Units ......................................................................................................................................... 96

5.3 Rate Design........................................................................................................................................... 99 Sewer Rates .................................................................................................................................................. 99 CONCLUSION.........................................................................................................................................100

6.1 Summary of Recommendations and Financial Results................................................................ 100

6.2 Rate Impacts and Comparison ......................................................................................................... 117 APPENDIX...............................................................................................................................................121

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iv
City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

LIST OF TABLES
Table 1. Current Fixed Charges for All Retail Customers and Fire Protection Service Customers by Meter Size ............................................................................................................................................................................4 Table 2. Current Variable Water Rates for Residential and Non-Residential Customers by Tier.....................5 Table 3. Proposed Revenue Adjustments FY 2025 to FY 2029 ...............................................................................5 Table 4. Proposed Fixed Charges for All Retail Customers and Fire Protection Service Customers by Meter Size, FY 2025 to FY 2029.............................................................................................................................6 Table 5. Proposed Variable Water Rates for Residential and Non-Residential Customers by Tier, FY 2025 to FY 2029.................................................................................................................................................................6 Table 6. Current Reclaimed Water Fixed Rates .........................................................................................................7 Table 7. Current Reclaimed Water Variable Rates ....................................................................................................7 Table 8. Proposed Reclaimed Water Proposed Revenue Adjustments FY 2025 to FY 2029 .............................8 Table 9. Proposed Reclaimed Water Fixed Charges by Meter Size for FY 2025 to FY 2029 ..............................8 Table 10. Proposed Reclaimed Water Variable Rates by Tier for FY 2025 to FY 2029........................................8 Table 11. Current Sewer Fixed Charges......................................................................................................................9 Table 12. Proposed Revenue Adjustments FY 2025 to FY 2029 .............................................................................9 Table 13. Proposed Sewer Rates FY 2025 to FY 2029 ............................................................................................10 Table 14. Expense Escalation Factors ......................................................................................................................18 Table 15. Annual Meter and Fire Service Line Count FY 2024 to FY 2029 ..........................................................19 Table 16. Annual Meter Counts, FY 2024 to FY 2029 ..............................................................................................20 Table 17. Annual Sewer Customer Counts, FY 2024 to FY 2029...........................................................................21 Table 18. Water Reserve Policies and FY 2025 target ............................................................................................21 Table 19. Reclaimed Water Reserve Policies and FY 2025 target ........................................................................21 Table 20. Sewer Reserve Policies and FY 2025 target............................................................................................22 Table 21. AWWA Equivalent Meter and Fire Flow Ratios.......................................................................................22 Table 22. Annual Water Use by Customer Class in hcf, FY 2024 to FY 2029 .....................................................25

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City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 23. Annual Non-Operating Revenue by Source, FY 2024 to FY 2029........................................................25 Table 24. Water Utility Operating Forecast, FY 2024 to FY 2029 ..........................................................................26 Table 25. Operating Expenses by Expense Category, FY 2024 to FY 2029 ........................................................26 Table 26. Rate Study CIP Expenses by Expense Type, FY 2024 to FY 2029 ......................................................27 Table 27. Water Fund Debt Service Payments, FY 2024 to FY 2029.....................................................................28 Table 28. Water Debt Service Coverage Ratio Calculation, FY 2024 to FY 2029................................................28 Table 29. Water Reserve Target, FY 2024 to FY 2029 .............................................................................................29 Table 30. Status Quo Financial Pro Forma for City of Corona Water System, FY 2024 to FY 2029 ...............31 Table 31. Proposed Financial Pro Forma for City of Corona Water System, FY 2024 to FY 2029 ..................32 Table 32. Revenue Requirements for City of Corona Water Utility, FY 2024 ......................................................33 Table 33. Percentage of Operating Costs Allocated to Standard Functions ......................................................35 Table 34. Percentage of Non-operating Costs Allocated to Standard Functions..............................................35 Table 35. System-Wide Peaking Factors...................................................................................................................37 Table 36. Percent of Operating Function Categories Allocated to Cost Components .....................................38 Table 37. Total of Operating Functional Categories Allocated to Cost Components .......................................38 Table 38. Percent of Non-Operating Function Categories Allocated to Cost Components.............................38 Table 39. Total of Non-Operating Functional Categories Allocated to Cost Components ..............................39 Table 40. Operating and Non-Operating Cost Allocation to Cost Components ................................................39 Table 41. Rate Revenue Requirements for Test Year, FY 2024.............................................................................40 Table 42. Allocation of Fire Costs ..............................................................................................................................40 Table 43. Final Cost of Service Allocations with all Adjustments ........................................................................41 Table 44. Total Equivalent Meters Used for Cost Allocation .................................................................................42 Table 45. Total Use and Peak Values used for Cost Allocation ............................................................................43 Table 46. Tier Use and Peak Values used for Cost Allocation ..............................................................................43 Table 47. Estimated Fire Flow by Customer Class..................................................................................................44 Table 48. Cost of Service Units...................................................................................................................................44 Table 49. Rate Revenue Requirements Divided by the Corresponding Units....................................................45

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City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 50. Unit of Service by Customer Class...........................................................................................................46 Table 51. Cost of Service by Customer Class..........................................................................................................46 Table 52. Allocation of Fixed and Variable Costs....................................................................................................48 Table 53. Fixed Cost Components Divided by Number of Units...........................................................................48 Table 54. Monthly Water Service Fixed Charge Calculation..................................................................................49 Table 55. Proposed 5-year Fixed Charge Schedule ................................................................................................49 Table 56. Fixed Cost Components Divided by Number of Units...........................................................................50 Table 57. Monthly Water Service Fixed Charge Calculation..................................................................................50 Table 58. Proposed 5-year Fixed Charge Schedule ................................................................................................51 Table 59. Available Water Supply and Costs............................................................................................................51 Table 60. Tier Width Allocations by Customer Class .............................................................................................54 Table 61. Water Source Unit Cost by Customer Class and Tier and Proposed Revenue Offset ....................54 Table 62. Variable Rate Costs and Components as Allocated to each Tier........................................................55 Table 63. Variable Rate Calculation ...........................................................................................................................55 Table 64. Proposed 5-Year Variable Rate Schedule................................................................................................56 Table 65. Annual Reclaimed Water Use by Customer Class in hcf, FY 2024 to FY 2029 .................................58 Table 66. Annual Non-Operating Revenue by Source, FY 2024 to FY 2029........................................................58 Table 67. Reclaimed Water Utility Operating Revenue Forecast, FY 2024 to FY 2029......................................58 Table 68. Operating Expenses by Expense Category, FY 2024 to FY 2029 ........................................................59 Table 69. Rate Study CIP Expenses by Expense Type, FY 2024 to FY 2029 ......................................................60 Table 70. Reclaimed Water Fund Debt Service Payments, FY 2024 to FY 2029.................................................60 Table 71. Reclaimed Water Debt Service Coverage Ratio Calculation, FY 2024 to FY 2029............................61 Table 72. Reclaimed Water Reserve Target, FY 2024 to FY 2029 .........................................................................62 Table 73. Status Quo Financial Pro Forma for City of Corona Reclaimed Water System, FY 2024 to FY 2029 ..................................................................................................................................................................................63 Table 74. Proposed Financial Pro Forma for City of Corona Reclaimed Water System, FY 2024 to FY 2029 ..................................................................................................................................................................................64

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vii
City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 75. Revenue Requirements for City of Corona Reclaimed Water Utility, FY 2024 ..................................65 Table 76. Percentage of Operating Costs Allocated to Standard Functions ......................................................67 Table 77. Percentage of Non-operating Costs Allocated to Standard Functions..............................................67 Table 78. System-Wide Peaking Factors...................................................................................................................68 Table 79. Percent of Operating Function Categories Allocated to Cost Components .....................................70 Table 80. Total of Operating Functional Categories Allocated to Cost Components .......................................70 Table 81. Percent of Non-Operating Function Categories Allocated to Cost Components.............................70 Table 82. Total of Non-Operating Functional Categories Allocated to Cost Components ..............................71 Table 83. Operating and Non-Operating Cost Allocation to Cost Components ................................................71 Table 84. Rate Revenue Requirements for Test Year, FY 2024.............................................................................72 Table 85. Final Cost of Service Allocations with all Adjustments ........................................................................73 Table 86. Total Equivalent Meters Used for Cost Allocation .................................................................................74 Table 87. Total Use and Peak Values used for Cost Allocation ............................................................................75 Table 88. Total Use and Peak Values used for Cost Allocation to Tiers by Percent.........................................75 Table 89. Cost of Service Units...................................................................................................................................75 Table 90. Rate Revenue Requirements Divided by the Corresponding Units....................................................76 Table 91. Unit of Service by Customer Class...........................................................................................................77 Table 92. Cost of Service by Customer Class..........................................................................................................77 Table 93. Allocation of Fixed and Variable Costs....................................................................................................78 Table 94. Fixed Cost Components Divided by Number of Units...........................................................................79 Table 95. Monthly Reclaimed Water Service Fixed Charge Calculation..............................................................79 Table 96. Proposed 5-year Fixed Charge Schedule ................................................................................................80 Table 97. Current and Proposed Reclaimed Water Tier Width Allocations ........................................................81 Table 98. Variable Rate Costs and Components as Allocated to each Tier........................................................82 Table 99. Variable Rate Calculation ...........................................................................................................................82 Table 100. Proposed 5-Year Variable Rate Schedule..............................................................................................82 Table 101. Sewer Customer Growth, FY 2024 to FY 2029 ......................................................................................84

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viii
City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 102. Annual Non-Operating Revenue by Source, FY 2024 to FY 2029......................................................85 Table 103. Sewer System Revenue Forecast, FY 2024 to FY 2029.......................................................................85 Table 104. Sewer System O&M Expense Forecast, FY 2024 to FY 2029 .............................................................85 Table 105. Rate Study Sewer CIP Expenses by Expense Type, FY 2024 to FY 2029 ........................................86 Table 106. Sewer Fund Debt Service Payments, FY 2024 to FY 2029..................................................................87 Table 107. Sewer Debt Service Coverage Ratio Calculation, FY 2024 to FY 2029.............................................87 Table 108. Sewer Reserve Target, FY 2024 to FY 2029...........................................................................................88 Table 109. Status Quo Financial Pro Forma for City of Corona Sewer System, FY 2024 to FY 2029.............90 Table 110. Proposed Financial Pro Forma for City of Corona Sewer System, FY 2024 to FY 2029 ...............91 Table 111. Revenue Requirements for City of Corona Sewer Utility, FY 2024 ...................................................92 Table 112. Percent of O&M Functional Categories Allocated ...............................................................................94 Table 113. Percent of O&M Functional Categories Allocated to Cost Components .........................................94 Table 114. Total of Operating Functional Categories Allocated to Cost Components.....................................95 Table 115. Percent of Asset Value Functional Categories Allocated...................................................................95 Table 116. Percent of Non-operating Functional Categories Allocated to Cost Components ........................95 Table 117. Total of Non-operating Functional Categories Allocated to Cost Components.............................95 Table 118. Revenue Requirement Cost Allocation by Cost Component.............................................................96 Table 119. Total Plant Sewer Flows ...........................................................................................................................96 Table 120. Residential Indoor Water Use Under Current Water Rates and Proposed Water Rates ...............97 Table 121. Cost of Service Units of Service .............................................................................................................97 Table 122. Cost of Service Unit Cost .........................................................................................................................98 Table 123. Average Residential Indoor Water Use ..................................................................................................98 Table 124. Sewer Rate Calculation.............................................................................................................................99 Table 125. Proposed Variable Sewer Rates FY 2025 to FY 2029...........................................................................99 Table 126. Proposed Potable Fixed Rates for FY 2025 to FY 2029.....................................................................105 Table 127. Proposed Potable Variable Rates for FY 2025 to FY 2029................................................................105 Table 128. Proposed Reclaimed Water Fixed Rates for FY 2025 to FY 2029....................................................110

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ix
City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 129. Proposed Reclaimed Water Variable Rates for FY 2025 to FY 2029 ...............................................111 Table 130. Proposed Sewer Rates Based on the Proposed Revenue Adjustment..........................................115

LIST OF FIGURES
Figure 1. City of Corona Boundary ..............................................................................................................................2 Figure 2. Water, Reclaimed Water, and Sewer Rate Study Process ....................................................................11 Figure 3. Annual Water Customer Growth FY 2024 to FY 2034 ............................................................................19 Figure 4. Annual Reclaimed Water Customer Growth FY 2024 to FY 2034 ........................................................20 Figure 5. Annual Aggregate Water Use, FY 2024 to FY 2034.................................................................................24 Figure 6. Rate Study CIP Expenses by Funding Source, FY 2024 to FY 2029....................................................27 Figure 7. Debt Service Coverage Ratio Under Current Rates, FY 2024 to FY 2029 ...........................................29 Figure 8. Water Cash Balances and Reserve Target with Current Rates, FY 2024 to FY 2029 .......................30 Figure 9. A Typical Flow for Cost of Service Analysis Process............................................................................34 Figure 10. Single Family Customer Impact by Usage for ¾” Meter .....................................................................56 Figure 11. Annual Aggregate Reclaimed Water Use in hcf, FY 2024 to FY 2034 ...............................................57 Figure 12. Rate Study CIP Expenses by Funding Source, FY 2024 to FY 2029 .................................................60 Figure 13. Debt Service Coverage Ratio Under Current Rates, FY 2024 to FY 2029.........................................61 Figure 14. Reclaimed Water Cash Balances and Reserve Target with Current Rates, FY 2024 to FY 2029 .62 Figure 15. A Typical Flow for Cost of Service Analysis Process .........................................................................66 Figure 16. Reclaimed Water Customer Impact by Usage for 1 1/2” Meter..........................................................83 Figure 17. Rate Study Sewer CIP Expenses by Funding Source, FY 2024 to FY 2029 .....................................86 Figure 18. Debt Service Coverage Ratio Under Current Rates, FY 2024 to FY 2029.........................................88 Figure 19. Sewer Cash Balances and Reserve Target With Current Rates, FY 2024 to FY 2029 ....................89 Figure 20. A Typical Flow for Cost of Service Analysis Process .........................................................................93 Figure 21. Rate Study Water Status Quo Financial Plan ......................................................................................101

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City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Figure 22. Ending Water Cash Balances with No Revenue Adjustment ...........................................................102 Figure 23. Recommended Water Revenue Adjustment........................................................................................103 Figure 24. Recommended Rate Study Adjusted Water Financial Plan..............................................................104 Figure 25. Recommended Ending Water Cash Balances with Revenue Adjustment .....................................106 Figure 26. Rate Study Reclaimed Water Status Quo Financial Plan..................................................................107 Figure 27 Ending Reclaimed Water Cash Balances with No Revenue Adjustment ........................................108 Figure 28. Recommended Reclaimed Water Revenue Adjustment....................................................................109 Figure 29. Recommended Rate Study Adjusted Reclaimed Water Financial Plan..........................................110 Figure 30. Recommended Ending Reclaimed Water Cash Balances with Revenue Adjustment .................111 Figure 31. Rate Study Sewer Status Quo Financial Plan .....................................................................................112 Figure 32. Ending Sewer Cash Balances with No Revenue Adjustment...........................................................113 Figure 33. Recommended Sewer Revenue Adjustment.......................................................................................114 Figure 34. Rate Study Adjusted Sewer Financial Plan .........................................................................................115 Figure 35. Recommended Ending Sewer Cash Balances with Revenue Adjustment.....................................116 Figure 36. Single Family Residential Combined Impacts for Water and Sewer...............................................117 Figure 37. Multi-Family Residential Combined Impacts for Water and Sewer (Four Units)...........................118 Figure 38. Non-Residential (Commercial) Combined Impacts for Water and Sewer (2” Meter)....................119 Figure 39. Neighboring Agencies Combined Bill Comparison ...........................................................................120

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1 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

EXECUTIVE SUMMARY

1.1 Background
The Water Division of the City of Corona (City) was founded in 1964 and subsequently became the Utilities Department (Department). The Department serves potable and reclaimed water to roughly 45,000 connections in its service area. The population served by the Department is approximately 165,000 residents over a service area covering 45 square miles. The City acquires its water supply from several sources, including local groundwater, regional desalted groundwater, imported water via Western Municipal Water District (WMWD), and reclaimed water produced at City-owned water reclamation facilities. The Department operates and maintains four water treatment facilities, 21 wells, 20 booster stations, and a distribution network consisting of 813 miles of water mains. On average, the City treats and serves approximately 30,000 acre-feet (AF) of water annually. The sewer system is made up of 448 sewer mains and treats approximately 11.5 million gallons of sewer per day. Figure 1 presents the limits of the City of Corona as well as the sphere of influence.

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2 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Figure 1. City of Corona Boundary

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3 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

1.2 Purpose of Study
The purpose of this analysis is to conduct a rate study which evaluates the City’s current utility rates and financial data and propose new rates for its Water, Reclaimed Water, and Sewer services, if necessary, to meet the City’s financial and strategic goals.

The primary objectives of this Study include:
• Projecting revenues and expenses for a ten-year study period • Proposing five-year revenue adjustments to fund the City’s projected financial needs • Proposing rates that aim to minimize the impact on customers • Producing an administrative record which effectively summarizes all findings • Supporting the City through the Proposition 218 process

1.3 Rate Recommendations and Proposed Rates
Water
• Adjusting rates annually by the recommended revenue adjustments of 9.0 percent per year • Increasing the proportion of revenue collected from fixed rates • Reducing the indoor allocation for residential customers from 55 gallons per capita per day (gpcd) to 47 gpcd
• Reducing the number of tiers for all customers by one Reclaimed Water
• Adjusting rates annually by the recommended revenue adjustments of 4.0 percent per year • Reducing the number of tiers for all customers to two Sewer
• Adjusting rates annually by the recommended revenue adjustments of 10.0 percent per year • Changing the rate structure to bill the same fixed charge for all customers • Introducing a variable charge for non-residential units for all water use over 8 hundred cubic feet (hcf) in a billing period
• Implementing a variance program for commercial customers whose water use does not equal their sewer flow

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4 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Current Water Rates
Currently, the City’s water customers pay a monthly fixed charge based on the customer’s meter size.

Additionally, customers with a dedicated private fire connection pay a monthly fee for their fire connection.

Customers also pay variable charges based on water use, which is billed per hundred cubic feet (hcf).

Residential (single family and muti-family residential) customers currently have a five-tiered rate design where higher use level categories are billed at a higher rate based on the increasing cost of water from different water sources. All other customers (non-residential) are billed variable charges based on a fourtier rate structure. The current rates as described are displayed in Table 1 and Table 2. Every customer with a variable charge has a unique water budget allocation. Water budget rates are designed to reflect efficient water use as determined by the State of California. The first tier for residential customers is based on efficient indoor use, currently set at 55 gallons per capita per day (gpcd). The default number of residents per household is four for single-family homes and two for multi-family homes. Residential tier 2 use is determined based on irrigable area and parcel size, and both tier 1 and tier 2 allocations are included in the total water budget. Non-residential tier 1 use is determined by a three-year average of each customer’s historical use patterns, which defines their water budget. Water use above each customer's water budget are billed at higher rates at an increment of 50 percent of the total budget. There are three tiers above each budget, where the highest tier accounts for all water use which exceeds 100 percent of the total water budget.

Table 1. Current Fixed Charges for All Retail Customers and Fire Protection Service Customers by Meter Size
Meter Size Retail Customers Fire Customers
5/8" $27.09 $8.60
3/4" $36.46 $8.60
1" $55.18 $8.60
1 1/2" $101.98 $8.60
2" $158.13 $9.74
3" $335.95 $10.81
4" $598.02 $16.76
6" $1,505.89 $32.74
8" $2,629.02 $60.29
10" $3,939.33 $101.72
Fixed Charges

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5 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 2. Current Variable Water Rates for Residential and Non-Residential Customers by Tier Customer Class Tier - Width Unit Cost
Residential Tier 1 - Indoor $1.93
Tier 2 - Outdoor $2.77
Tier 3 - 1%-50% Over Budget $5.48
Tier 4 - 51%-100% Over Budget $9.12
Tier 5 - All Additional hcf $13.59
Non-Residential Tier 1 - Efficient Water Use $2.77
Tier 2 - 1%-50% Over Budget $5.48
Tier 3 - 51%-100% Over Budget $9.12
Tier 4 - All Additional hcf $13.59
Variable Charges
Proposed Water Rates
RDN proposes the following rate and revenue adjustments to accomplish the City’s financial goals of capital and reserve funding as well as maintaining debt service coverage ratios. To achieve the proposed financial plan, RDN recommends that the City raise water revenues by 9.0 percent each year of the rate setting period which includes FY 2025 through FY 2029.

Table 3. Proposed Revenue Adjustments FY 2025 to FY 2029 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Recommended Adjustment 9.0% 9.0% 9.0% 9.0% 9.0%
Additionally, the City should implement a four-tiered rate structure for all residential customers. Tier widths for each residential customer should be updated to reflect upcoming changes to State legislation, which reduce the indoor water allocations of water budgets from 55 gpcd to 47 gpcd. RDN also recommends reducing the number of non-residential customer tiers from four to three. These adjustments will create a more equitable rate structure based on the actual cost of providing service to each customer while simplifying the overall rate design.

Costs were allocated equitably between all customers during the cost of service analysis. The rates for each meter size represent an equitable portion of the total cost of service for each class allocated the respective meter based on the calculations shown in the Cost of Service Analysis. The City will implement each fiscal year rate adjustments on January 1
st of the fiscal year. The proposed rates which result from these adjustments are shown in Table 4 and Table 5.

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6 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 4. Proposed Fixed Charges for All Retail Customers and Fire Protection Service Customers by Meter Size, FY 2025 to FY 2029
Customer Class FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Domestic
5/8" $32.79 $35.75 $38.96 $42.47 $46.29
3/4" $42.94 $46.80 $51.02 $55.61 $60.61
1" $63.23 $68.92 $75.12 $81.88 $89.25
1 1/2" $113.94 $124.20 $135.38 $147.56 $160.84
2" $174.81 $190.54 $207.69 $226.38 $246.75
3" $367.54 $400.62 $436.67 $475.97 $518.81
4" $651.56 $710.20 $774.12 $843.79 $919.74
6" $1,635.51 $1,782.70 $1,943.15 $2,118.03 $2,308.65
8" $2,852.76 $3,109.51 $3,389.36 $3,694.40 $4,026.90
10" $4,272.88 $4,657.44 $5,076.61 $5,533.51 $6,031.52
Fire Protection
5/8" $12.64 $13.78 $15.02 $16.37 $17.84
3/4" $12.64 $13.78 $15.02 $16.37 $17.84
1" $12.64 $13.78 $15.02 $16.37 $17.84
1 1/2" $13.33 $14.53 $15.84 $17.27 $18.82
2" $14.91 $16.25 $17.71 $19.31 $21.05
3" $17.63 $19.21 $20.94 $22.83 $24.88
4" $27.38 $29.84 $32.53 $35.46 $38.65
6" $44.20 $48.18 $52.51 $57.24 $62.39
8" $69.50 $75.76 $82.57 $90.01 $98.11
10" $104.57 $113.98 $124.24 $135.42 $147.61
Fixed Charges
Table 5. Proposed Variable Water Rates for Residential and Non-Residential Customers by Tier, FY 2025 to FY 2029
Note: that fire hydrant and private fire rates reflect the peaking and source water cost of peak water use, residential tier 4 Tier FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Residential
Tier 1 $1.96 $2.13 $2.32 $2.53 $2.76
Tier 2 $3.31 $3.60 $3.93 $4.28 $4.67
Tier 3 $4.38 $4.77 $5.20 $5.67 $6.18
Tier 4 $5.22 $5.69 $6.20 $6.76 $7.36
Non-Residential
Tier 1 $3.31 $3.60 $3.93 $4.28 $4.67
Tier 2 $4.38 $4.77 $5.20 $5.67 $6.18
Tier 3 $5.22 $5.69 $6.20 $6.76 $7.36
Variable Charges

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7 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Current Reclaimed Water Rates
Reclaimed water customers currently have the same basic rate structure as potable water customers, a fixed monthly charge and variable rates based on usage levels. Table 6 and Table 7 show the current rates for reclaimed water customers. Reclaimed water tiers were determined based on the water budget allocation methodology as described in the previous section.

Table 6. Current Reclaimed Water Fixed Rates
Meter Size Reclaimed
5/8" $23.52
3/4" $30.81
1" $45.39
1 1/2" $81.84
2" $125.59
3" $264.13
4" $468.28
6" $1,175.53
8" $2,050.48
10" $3,071.25
Fixed Charges
Table 7. Current Reclaimed Water Variable Rates
Customer Class Tier-Width Unit Cost
Reclaimed Tier 1 - Efficient Water Use $2.14
Tier 2 - 1%-50% Over Budget $3.21
Tier 3 - 51%-100% Over Budget $4.27
Tier 4 - All Additional hcf $6.41
Variable Charges
Proposed Reclaimed Water Rates
RDN proposes the following revenue adjustments to accomplish the City’s financial goals of capital and reserve funding as well as maintaining debt service coverage ratios. To maintain the proposed financial plan, the City should raise reclaimed water revenues by 4.0 percent each year of the study period. Table 8 shows the proposed reclaimed water variable rates for FY 2025 through FY 2029. Based on the cost of service analysis, it was determined that the City should reduce the number of variable rate tiers for reclaimed water customers from four to two. The first tier will be based on a customer’s outdoor water budget, and all use beyond that tier will be billed at the tier 2 rate. Reducing the number of tiers allows for better alignment of costs to each use level. Table 9 and Table 10 show the proposed reclaimed rates, with the annual revenue adjustments applied.

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8 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 8. Proposed Reclaimed Water Proposed Revenue Adjustments FY 2025 to FY 2029 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Revenue Adjustment 4.0% 4.0% 4.0% 4.0% 4.0%
Table 9. Proposed Reclaimed Water Fixed Charges by Meter Size for FY 2025 to FY 2029 Customer Class FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Reclaimed Water
5/8" $26.64 $27.70 $28.81 $29.96 $31.16
3/4" $35.95 $37.38 $38.88 $40.43 $42.05
1" $54.57 $56.75 $59.02 $61.38 $63.84
1 1/2" $101.12 $105.16 $109.37 $113.75 $118.30
2" $156.98 $163.26 $169.79 $176.58 $183.65
3" $333.88 $347.24 $361.13 $375.57 $390.60
4" $594.58 $618.36 $643.10 $668.82 $695.57
6" $1,497.70 $1,557.61 $1,619.91 $1,684.71 $1,752.10
8" $2,614.96 $2,719.56 $2,828.34 $2,941.48 $3,059.14
10" $3,918.44 $4,075.17 $4,238.18 $4,407.71 $4,584.02
Fixed Charges
Table 10. Proposed Reclaimed Water Variable Rates by Tier for FY 2025 to FY 2029 Tier FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Reclaimed Water
Tier 1 $2.37 $2.46 $2.56 $2.66 $2.77
Tier 2 $2.60 $2.71 $2.82 $2.93 $3.05
Variable Charges
Current Sewer Rates
Currently, the City’s sewer customers pay a fixed charge monthly based on their customer class. Each customer class pays a different fixed charge per billing type. Fixed charges generally increase for each meter size of commercial customer; however, some customers, such as special (restaurants, supermarkets, mortuaries, bakeries), hotels, and laundromats have their own unique fixed charges based on the estimated demand they place on the system (Table 11).

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9 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 11. Current Sewer Fixed Charges
Customer Class Monthly Fee
Inside Standard Sewer $45.60
Inside Commercial 5/8" $45.60
Inside Commercial 3/4" $72.02
Inside Commercial 1" $103.48
Inside Commercial 1 1/2" $186.06
Inside Commercial 2" $291.55
Inside Commercial 3" $537.41
Inside Commercial 4" $875.43
Inside Commercial 6" $1,753.50
Inside Commercial 8" $2,820.52
Special - Less than or equal to 1" Meter $163.28
Special - Larger than 1" Meter $266.34
Motels & Hotels $45.60
Laundries $24.20
Fixed Charges
Proposed Sewer Rates
The recommended sewer rates provide a revenue adjustment schedule designed to contribute to the City’s reserves, fund considerable capital expenditure needs, and allow the City to meet debt service coverage ratios. RDN, working with City staff, determined that an annual increase of 10.0 percent through the study period was necessary to maintain sewer fund balances. The proposed rates also revise the rate structure. Instead of a unique fixed charge based on customer class and water meter size, which ignores potential differences within a customer type, all customers will be billed the same fixed charge based on 8 hcf of water use in a billing period. Non-residential customers will incur a variable charge for sewer for water use above 8 hcf. The process used to determine equitable sewer rates is thoroughly described in the cost of service and rate design sections of this report. The proposed revenue adjustment and the proposed rates for FY 2025 – FY 2029 are shown in Table 12 and Table 13 respectively.

Table 12. Proposed Revenue Adjustments FY 2025 to FY 2029 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Recommended Adjustment 10.0% 10.0% 10.0% 10.0% 10.0% Page 70 of 2748 10 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 13. Proposed Sewer Rates FY 2025 to FY 2029
Base Charge FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
All Connections $45.46 $50.01 $55.01 $60.51 $66.56
Per hcf FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Non-Residential >8 hcf $5.50 $6.05 $6.66 $7.32 $8.05
Variable Charges
Fixed Charges

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11 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

METHODOLOGY

2.1 General Methodology
The water, reclaimed water, and sewer rates were developed using principles set forth by the American Water Works Association (AWWA) and the Water Environment Federation (WEF). RDN rate-making practices incorporate methods described in the AWWA Manual 1 (M1)1for Water Systems and the WEF Financing and Charges for Sewer Systems2 wherever possible. Figure 2 presents the steps taken to develop the City’s proposed rates.

Figure 2. Water, Reclaimed Water, and Sewer Rate Study Process • Growth Projection: project customer growth for the ten-year study period, FY 2025 through FY 2034, using the City’s historical customer growth data. Forecast revenues for the study period based on the projected customer growth.
• Financial Planning and Revenue Requirements: develop a ten-year financial plan based on the projected revenues and annual costs which include operating, debt service, and capital expenses.

The City’s target reserve level should also be considered as part of the financial planning. Based on the financial planning, revenue requirements are determined for each year of the study period. • Cost of Service: evaluate the customer classifications and allocate costs based on their service requirements.
• Rate Design: design rates to equitably recover the rate revenue requirements from each customer. 1 Principles of Water Rates, Fees, and Charges, Seventh Edition, Manual of Water Supply Practices, American Water Works Association
2 Financing and Charges for Sewer Systems, WEF Manual of Practice Number 27, Water Environment Federation Growth Projection
Financial Planning
and Revenue
Requirements
Cost of Service Rate Design

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12 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

2.2 Legal Considerations
This section describes the legal framework considered in the development of the recommended rates to ensure that the calculated cost of service rates provide a fair and equitable allocation of costs to each customer class.

California Constitution‐Article XIII C (Proposition 26) California voters approved Proposition 26 on November 2, 2010. Proposition 26 amended Article XIII C of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” with listed exceptions. By means of these exceptions, Article XIII C classifies several types of charges, in addition to property-related charges, that are not taxes, such as charges for specific services or benefits, regulatory charges and penalties.

Article XIII C’s definition of “tax” lists the following exceptions: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law; (6) a charge imposed as a condition of property development; and (7) assessments and property-related fees imposed in accordance with the provisions of Article XIII D.

Proposition 26 also provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payer bear a fair or reasonable relationship to the payer’s burdens on, or benefits received from, the governmental activity. Like the proportionality requirements of Article XIII D, assessment of rates under these requirements, if applicable, would be supported by the cost of service approach.

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13 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study California Constitution‐Article XIII D, Section 6 (Proposition 218) In November 1996, California voters passed Proposition 218, the “Right to Vote on Taxes Act.” This constitutional amendment protects taxpayers by limiting the methods by which local governments can create or increase taxes, fees and charges without taxpayer consent. Between 2002 and 2017, California courts have ruled that fees associated with providing water services are “property-related” and thus under the jurisdiction of Prop 218. The principal requirements for fairness of the fees, as they relate to public water service, are as follows: Revenues derived from the fee or charge shall not exceed the funds required to provide the property related service. Revenues derived by the fee or charge shall not be used for any other purpose other than that for which the charge was imposed. The amount of the fee or charge imposed upon any parcel shall not exceed the proportional cost of service attributable to the parcel.

Reliance by an agency on any parcel map, including, but not limited to, an assessor’s parcel map, may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership for purposes of this article.

The rates developed in this report use a methodology to establish an equitable system of charges that recovers the cost of providing service and fairly apportions costs to each customer as required by Proposition 218.

California Constitution‐Article X, Section 2
Article X, Section 2 of the California Constitution (established in 1976) provides as follows:
“It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to the reasonable and beneficial use thereof in the interest of the people and for the public welfare.” As such, public agencies are constitutionally mandated to maximize the beneficial use of water, prevent waste, and encourage efficiency which this Study achieves.

Assembly Bill-AB 2882
In 2008, the California Legislature adopted AB 2882, establishing a body of law entitled “Allocation‐Based Conservation Water Pricing.” AB 2882 is consistent with the above referenced constitutional provisions.

Water Code Section 370 provides in part as follows:
“The Legislature hereby finds and declares all of the following:

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14 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study a. The use of allocation‐based conservation water pricing by public entities that sell and distribute water is one effective means by which waste or unreasonable use of water can be prevented and water can be saved in the interest of the people and for the public welfare, within the contemplation of Section 2 of Article X of the California Constitution. b. It is in the best interest of the people of California to encourage public entities to voluntarily use allocation‐based conservation water pricing, tailored to local needs and conditions, as a means of increasing efficient uses of water, and further discouraging wasteful or unreasonable use of water under both normal and dry‐year hydrologic conditions.” Water Code Section 372 provides as follows:
a. “A public entity may employ allocation‐based conservation water pricing that meets all of the following criteria.
(1) Billing is based on metered water use.
(2) A basic use allocation is established for each customer account that provides a reasonable amount of water for the customer’s needs and property characteristics. Factors used to determine the basic use allocation may include, but are not limited to the number of occupants, the type or classification of use, the size of lot or irrigated area, and the local climate data for the billing period. Nothing in this chapter prohibits a customer of the public entity from challenging whether the basic use allocation established for that customer’s account is reasonable under the circumstances. Nothing in this chapter is intended to permit public entities to limit the use of property through the establishment of a basic use allocation. (3) A basic charge is imposed for all water used within the customer’s basic use allocation, except that at the option of the public entity, a lower rate may be applied to any portion of the basic use allocation that the public entity has determined to represent superior or more than reasonable conservation efforts.
(4) A conservation charge shall be imposed on all increments of water use in excess of the basic use allocation. The increments may be fixed or may be determined on a percentage or any other basis, without limitation on the number of increments, or any requirement that the increments or conservation charges be sized, or ascend uniformly, or in a specified relationship. The volumetric prices for the lowest through the highest priced increments shall be established in an ascending relationship that is economically structured to encourage conservation and reduce the inefficient use of water, consistent with Section 2 of Article X of the California Constitution.

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15 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study (1) Except as specified in subdivision
(a) The design of an allocation‐based conservation pricing rate structure shall be determined in the discretion of the public entity.
(2) The public entity may impose meter charges or other fixed charges to recover fixed costs of water service in addition to the allocation‐based conservation pricing rate structure. b. A public entity may use one or more allocation‐based conservation water pricing structures for any class of municipal or other service that the public entity provides.” Assembly Bill-AB 1668 and Senate Bill-SB 606
In 2018, the California Legislature adopted AB 1668 and SB 606, establishing a standard for indoor water use, long-term standards for efficient water use of commercial, industrial, and institutional customers, and penalties for customers who don’t comply with use restrictions. The bill establishes “55 gallons per capita daily as the standard for indoor residential water use” until January 1, 2025, “52.5 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use” until January 1, 2030, and establishes “the greater of 50 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use” thereafter. The bill also establishes principles for determining efficient outdoor water use. “’Principles of the model water efficient landscape ordinance’ means those provisions of the model water efficient landscape ordinance applicable to the establishment or determination of the amount of water necessary to efficiently irrigate both new and existing landscapes.

These provisions include, but are not limited to, all of the following:
(a) Evapotranspiration adjustment factors, as applicable. (b) Landscape area.
(c) Maximum applied water allowance.
(d) Reference evapotranspiration.
(e) Special landscape areas, including provisions governing evapotranspiration adjustment factors for different types of water used for irrigating the landscape.” “For landscape irrigated through dedicated or residential meters or connections, water efficiency equivalent to the standards of the Model Water Efficient Landscape Ordinance set forth in Chapter 2.7 (commencing with Section 490) of Division 2 of Title 23 of the California Code of Regulations, as in effect the later of the year of the landscape’s installation or 1992. An urban retail water supplier using the

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16 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study approach specified in this subparagraph shall use satellite imagery, site visits, or other best available technology to develop an accurate estimate of landscaped areas.” As noted in the referenced statutes, an “Allocation‐Based Conservation Water Pricing Rate Structure” is a form of an increasing block rate structure where the amount of water within the first block or blocks is based on the estimated, efficient water needs of the individual customer, currently 55 gallons per day per person. Since it was originally introduced, the State has amended the language of the water budget statute to reduce indoor water budget targets from 52.5 gpcd to 47 gpcd3, the guideline used in this study.

This rate study, in conjunction with the City‘s findings and determinations for individual customers, establishes a water budget for each customer. Each water budget defines how much water is considered efficient. Customers who use water in excess of their water budget pay a higher rate for their “inefficient or wasteful” usage due to the fact that water use in excess of budgeted amounts incurs higher costs to the City.

2.3 Key Assumptions
A test year, FY 2024, was selected for which costs are to be analyzed and rates to be established for this study. The financial plan was built for the next ten years, including the five-year study period FY 2025 through FY 2029 with a detailed revenue adjustment plan. The cost of service rates are adjusted each year by the determined revenue adjustments based on the financial plan. The City’s fiscal year starts on July 1 and ends on June 30.

Escalation Factors
The financial plan was built based on an assumption in the projected escalation of revenues and expenses associated with both operations and maintenance (O&M) and capital improvement projects (CIPs). Bureau of Labor Statistics (BLS) Los Angeles-Long Beach-Anaheim Consumer Price Index (CPI), Federal Reserve Bank of St. Louis (FRED) Economic Research Division, Quarterly Census of Employment and Wages (QCEW), and Engineering News Record (ENR) Building Cost Index (BCI).

Escalation factors used in this study are shown in Table 14. The Los Angeles-Long Beach-Anaheim geography was chosen over the Riverside-San Bernardino-Ontario because of the longer timeframe of extant data. The Riverside-San Bernardino-Ontario data has only been published by the BLS since 2017 which makes a more volatile index because of the recent high level of inflation since 2020. The Los Angeles-Long Beach-Anaheim data, which previously included areas east of Los Angeles County, has many decades of data available and was determined to be more representative of the long-term inflation 3 Results of the Indoor Residential Water Use Study. A Report to the Legislature Prepared pursuant to Water Code Section 10609.4(b). August 2021. Department of Water Resources.

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17 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study in the area. The overall escalation factor is derived solely from the All Items series of the BLS Los Angeles-Long Beach-Anaheim CPI. The All Items series represents a broad measure of the average change in prices over time for a wide array of goods and services. The market basket includes categories such as food and beverage, housing, apparel, transportation, medical, and other goods and services.

The Utilities escalation factor is derived from the Fuels and utilities and Energy series of the BLS Los Angeles-Long Beach-Anaheim CPI. RDN takes a weighted average of the Energy and Fuels and Utilities data sets to form a combined utilities inflation factor. This escalation factor accurately captures the costs associated with energy consumption and utility service.

The payroll escalation factor was provided by City Staff based on historical actual costs and unknown impacts of current employee bargaining unit negotiations.

The fuels and automobile escalation factor is derived from the Private Transportation, Fuels and Utilities, and Motor Fuel series of the BLS Los Angeles-Long Beach-Anaheim CPI. RDN takes a weighted average of the Private Transportation, Fuels and utilities, and Motor Fuel data sets to form a combined Fuels and Automobile inflation factor.
water purchase inflation is based on an average of published increases for the Western Municipal Water District.

The Construction escalation factor is derived using ENR’s BCI for the selected geography. ENR publishes a building cost index for Los Angeles, San Francisco, California, and the National level. RDN analyzed all four indices and, in coordination with staff, ultimately selected the index which best represents the building cost environment in the Agency, the Los Angeles BCI.

The property tax escalation factor is derived solely from the Housing series of the BLS Los Angeles-Long Beach-Anaheim CPI.

The insurance escalation factor is derived solely from the Federal Reserve Bank of St. Louis’ Producer Price Index for Premiums for Commercial Insurance. This index tracks the insurance costs for both liability and property coverage for businesses in the United States.

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18 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 14. Expense Escalation Factors
Category FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Payroll 8.0% 8.0% 8.0% 4.0% 4.0%
Other Employee 3.2% 3.2% 3.2% 3.2% 3.2%
Utilities 3.4% 3.4% 3.4% 3.4% 3.4%
Chemicals 5.3% 5.3% 5.3% 5.3% 5.3%
Water Treatment 5.0% 5.0% 5.0% 5.0% 5.0%
Fuel/Automobile 3.6% 3.6% 3.6% 3.6% 3.6%
Construction 5.9% 5.9% 5.9% 5.9% 4.0%
Insurance 3.4% 3.4% 3.4% 3.4% 3.4%
Overall 3.5% 3.5% 2.7% 2.7% 2.7%
Property Tax 4.9% 4.9% 4.9% 4.9% 4.9%
Water Purchase 7.6% 7.6% 7.6% 7.6% 7.6%
Customer Growth
All analyses assumed that there will be approximately 0.5 percent annual customer growth based on historical growth reported by City staff. Additionally, it was assumed that per account water use would remain stable over the study period.

Water
There are currently approximately 45,408 water meters connected to the City’s water system. In ten years, 47,712 meters are projected. A total of 1,136 new Water Service connections are projected to join the water system during the 5-year rate setting period, approximately 227 per year. Figure 3 shows the annual water customer growth for the study period. Table 15 shows the projected number of meters and fire service lines for all customer classes during the rate setting period.

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19 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Figure 3. Annual Water Customer Growth FY 2024 to FY 2034 45,408 45,631 45,856 46,085 46,314 46,544 46,776 47,009 47,242 47,476 47,712 -
10,000
20,000
30,000
40,000
50,000
60,000
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 5/8" 3/4" 1" 1 1/2" 2" 3" 4" 6" 8" 10"
Table 15. Annual Meter and Fire Service Line Count FY 2024 to FY 2029 Meter Size FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 5/8" 5,534 5,561 5,589 5,618 5,647 5,676
3/4" 28,847 28,990 29,134 29,280 29,426 29,573
1" 7,106 7,141 7,176 7,211 7,247 7,283
1 1/2" 1,293 1,299 1,305 1,311 1,317 1,323
2" 1,247 1,253 1,259 1,265 1,271 1,277
3" 111 110 109 109 108 107
4" 161 162 163 164 165 166
6" 506 509 512 515 518 521
8" 492 494 496 498 500 502
10" 111 112 113 114 115 116
Total 45,408 45,631 45,856 46,085 46,314 46,544
Reclaimed Water
During the rate setting period, a total of 4 new reclaimed water meters are expected. Growth was projected for reclaimed water customers based on the 0.5 percent overall annual growth projected for

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20 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study reclaimed water customer connections. Figure 4 shows reclaimed water customer growth between FY 2024 and FY 2034. Table 16 shows the projected number of meters during the rate setting period.

Figure 4. Annual Reclaimed Water Customer Growth FY 2024 to FY 2034 387 387 388 389 390 391 392 393 394 395 396
-
50 100
150
200
250
300
350
400
450
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
FY
2034
3/4" 1" 1 1/2" 2" 3" 4" 6" 8" 10"
Table 16. Annual Meter Counts, FY 2024 to FY 2029
Meter Size FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 5/8" - - - - - -
3/4" 16 16 16 16 16 16
1" 81 81 81 81 81 81
1 1/2" 169 169 170 171 172 173
2" 87 87 87 87 87 87
3" 12 12 12 12 12 12
4" 14 14 14 14 14 14
6" 6 6 6 6 6 6
8" 1 1 1 1 1 1
10" 1 1 1 1 1 1
Total 387 387 388 389 390 391
Sewer
During the 5-year study period, a total of 1,381 new sewer customer connections are expected. Growth was projected for sewer customers based on the 0.5 percent overall annual growth projected for sewer

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21 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study customer connections. Table 17 shows the projected number of billing units from each customer class during the rate setting period.

Table 17. Annual Sewer Customer Counts, FY 2024 to FY 2029 Account Type FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Inside Standard Sewer 49,327 49,574 49,822 50,071 50,321 50,573 Inside Commercial
Commercial - 5/8" 142 143 144 145 146 147
Commercial - 3/4" 176 177 178 179 180 181
Commercial - 1" 566 569 572 575 578 581
Commercial - 1 1/2" 502 505 508 511 514 517
Commercial - 2" 536 539 542 545 548 551
Commercial - 3" 25 25 25 25 25 25
Commercial - 4" 10 10 10 10 10 10
Commercial - 6" 4 4 4 4 4 4
Commercial - 8" - - - - - -
Special
Special - Less than or equal to 1" 50 50 50 50 50 50
Special - Larger than 1" 94 94 94 94 94 94
Motels and Hotels
Motels and Hotels Accounts 24 24 24 24 24 24
Motels and Hotels Units 3,137 3,153 3,169 3,185 3,201 3,217 Laundries
Laundries Accounts 6 6 6 6 6 6
Laundries Machines 200 200 200 200 200 200
Reserve Policy
The City’s reserve policy includes reserves for each utility. The total water fund reserve target for FY 2025 is $23.1 million. The total reclaimed water fund reserve target is $1.7 million for FY 2025. The total sewer fund reserve target for FY 2025 is $13.2 million. Table 18, Table 19, and Table 20 show the reserve targets for the water, reclaimed water, and sewer utilities for FY 2025, respectively, as well as the reserve policy for each individual reserve.

Table 18. Water Reserve Policies and FY 2025 target
Reserve Policy FY 2025 Target
Operating Fund 3 Months Operating + Annual Depreciation $23,063,042 Table 19. Reclaimed Water Reserve Policies and FY 2025 target Reserve Policy FY 2025 Target
Operating Fund 3 Months Operating + Annual Depreciation $1,748,445 Page 82 of 2748 22 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 20. Sewer Reserve Policies and FY 2025 target
Reserve Policy FY 2025 Target
Operating Fund 3 Months Operating + Annual Depreciation $13,192,588 Equivalent Meter Size
When designing fixed monthly water service charges, the potential demand or capacity requirements placed on the water system can be measured by the size of installed meters which receive services from the system. The safe operating flow (or capacity) of a particular size of the meter is essentially the limiting factor in terms of the demand that can be exerted on the water system through the meter. The ratio of the safe operating capacity of various sizes of meters relative to the capacity of a base meter may be used to determine appropriate charges for the larger meter sizes4. The City considers 5/8” meters as the base meter capacity. Fire flow ratios are based on the size of the fire line running to those meters and potential fire flow through the line. The capacity ratio is calculated using the meter capacities in gallons per minute (gpm) provided in the AWWA M1 for meters larger than 5/8 inch. Table 21 shows the equivalent meter ratios used in this study for standard and fire flow meters.

Table 21. AWWA Equivalent Meter and Fire Flow Ratios
Meter Size Meter Ratio Fire Flow
5/8" 1.00 1.00
3/4" 1.50 1.00
1" 2.50 1.00
1 1/2" 5.00 2.90
2" 8.00 6.19
3" 17.50 17.98
4" 31.50 38.32
6" 80.00 111.31
8" 140.00 237.21
10" 210.00 426.58
12" 265.00 689.04
Debt Service Coverage Ratios
The City’s debt covenants require a certain ratio of net revenue in excess of operating expenses. Debt service coverage ratios are one of the main financial plan drivers of the revenue adjustments. When calculating debt service coverage requirements, the City must maintain a net revenue of 125 percent, or a 1.25 debt service coverage ratio (DSCR) to avoid facing technical default. For the purpose of this study, 4 From “Principles of Water Rates, Fees, and Charges” by American Water Works Association, 2017, Seventh Edition, Appendix B, p. 385.

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23 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study leases were not included in the DSCR calculations as they have no specific coverage requirement but are shown as outstanding balances.

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24 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

WATER UTILITY

3.1 Financial Plan
RDN built a 10-year financial model for the water utility to meet the City’s long-term financial goals.

Demand Projections
Using historical billing records, RDN first derived aggregate usage levels to project water demand. Next, we calculated per account water usage for each customer by dividing the aggregate usage by the number of accounts. RDN assumed constant per account usage over the study period. This assumption was introduced to ensure that forecasted deviation in the wake of the Covid-19 pandemic is conservative.

Finally, the forecast number of accounts and per-account usage were multiplied to estimate aggregate use by customer class. Figure 5 shows the City’s total water demand projected for the next ten years.

Figure 5. Annual Aggregate Water Use, FY 2024 to FY 2034

11.48 11.54 11.59 11.65 11.70 11.76 11.82 11.87 11.93 11.99 12.04

0.00 2.00

4.00 6.00

8.00 10.00

12.00 14.00
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Million HCF Residential Single Family Residential Multi-Family Commercial Governmental Industrial Landscape

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25 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 22 shows the annual water use projection by customer class for the rate setting period.

Table 22. Annual Water Use by Customer Class in hcf, FY 2024 to FY 20295 Customer Class FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Residential Single Family 7,496,177 7,533,472 7,570,970 7,608,874 7,646,980 7,685,289 Residential Multi-Family 1,167,370 1,173,134 1,179,201 1,185,572 1,191,943 1,198,313 Commercial 1,048,820 1,054,265 1,059,710 1,065,155 1,070,600 1,076,045 Governmental 173,504 173,504 173,504 173,504 173,504 173,504 Industrial 368,250 369,960 371,670 373,380 375,091 376,801 Landscape 1,227,109 1,231,741 1,236,374 1,241,008 1,245,643 1,250,278 Total 11,481,230 11,536,076 11,591,430 11,647,493 11,703,759 11,760,229 Revenues
Based on the account growth and water demand projections, RDN forecasted revenues generated from customer rates using the current water rates for the study period, which total approximately $58.0 to $60.0 million annually. Other operating income and non-operating revenue are estimated to provide supplemental revenue each year. Table 23 shows the projected non-operating revenue for the water utility by source for FY 2024 to FY 2029.

Table 23. Annual Non-Operating Revenue by Source, FY 2024 to FY 2029 Non-Operating Revenue FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Interest On Investments $731,547 $746,178 $761,101 $776,324 $791,850 $807,687 Other Interest Income $137,455 $140,204 $143,008 $145,868 $148,785 $151,761 Services To Other Funds $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Mwd-Local Resource Project $902,416 $0 $0 $0 $0 $0
Premium On Sale Of Bond $36,714 $0 $0 $0 $0 $0
Total $1,833,132 $911,382 $929,109 $947,191 $965,635 $984,448 The system’s total revenue for the study period is estimated to be approximately $62.0 to $62.9 million annually under the current rates. Table 24 shows the projected revenue flow for the study period (FY 2024 – FY 2029) without any revenue adjustments, projections are based on water use and customer growth projections as well as other operating and non-operating revenue estimates provided by City staff. 5 Use projections derived from historical monthly customer billing records provided by the City and trends in water use

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26 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 24. Water Utility Operating Forecast, FY 2024 to FY 2029 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Revenue from Rates
Fixed Charges $23,700,000 $24,192,076 $24,310,227 $24,429,579 $24,549,594 $24,670,046 Variable Charges $34,260,000 $34,280,275 $34,443,404 $34,608,493 $34,774,143 $34,940,353 Rate Revenue Total $57,960,000 $58,472,351 $58,753,631 $59,038,072 $59,323,736 $59,610,399 Other Operating Revenues $2,209,480 $2,235,687 $2,260,130 $2,285,423 $2,306,122 $2,327,389 Non-operating Revenues $1,833,132 $911,382 $929,109 $947,191 $965,635 $984,448 Total $62,002,612 $61,619,419 $61,942,870 $62,270,687 $62,595,493 $62,922,237 Operating and Maintenance (O&M) Expense
The water utility’s budget includes $55.0 million in operating expenses for FY 2024. Total operating expenses are expected to increase approximately 5.7 percent per year based on the application of specific inflation factors to each budget line item. By the end of the five-year rate setting period, total operating expenses are expected to reach $72.4 million. Table 25 shows projected operating expenses for the rate setting period by budget category.

Table 25. Operating Expenses by Expense Category, FY 2024 to FY 20296 Expense Category FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Development Service/Permitting $82,652 $91,417 $97,803 $104,669 $108,691 $112,868 Capital Improvements $878,921 $1,107,485 $1,180,980 $1,259,543 $1,307,247 $1,356,774 General Service $7,679,283 $8,068,523 $8,376,345 $8,647,193 $8,899,373 $9,159,024 Regulatory Compliance $1,069,313 $1,123,346 $1,168,350 $1,208,250 $1,243,655 $1,280,107 Operations $34,630,050 $37,038,990 $39,357,671 $41,809,170 $44,299,541 $46,954,434 Infrastructure Maintenance $3,912,150 $4,172,515 $4,368,113 $4,557,851 $4,718,324 $4,873,139 Facilities Maintenance $3,677,978 $4,000,803 $4,212,486 $4,426,305 $4,605,210 $4,766,733 Conservation $567,994 $637,951 $676,824 $717,551 $743,707 $770,811 Customer Care $2,513,710 $2,727,545 $2,853,388 $2,973,380 $3,068,087 $3,165,328 Total Operating $55,012,051 $58,968,574 $62,291,959 $65,703,913 $68,993,835 $72,439,218 Other Obligations
Other obligations included in the financial plan are capital improvement projects funded by rates known as PAYGO (Pay As You Go), debt service payments, and reserve contributions made from rates.

Capital Improvement Projects
The City plans to spend an average of $18.2 million a year on capital projects during the rate setting period. $3.2 million on average of the total expenditures per year will be funded by capacity fees and grants. During the 5-year rate setting period, City staff indicated the City is in the process of conducting 6 City staff provided current year operating expenses by category; projections are based on individual line-item inflationary factors shown in Table 14

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27 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study a capacity fee study, so capacity fee funded CIP is not included in the rate analysis. Table 26 shows the City’s scheduled capital improvement projects for the next five years by funding source. Figure 6 graphically shows the capital plan by funding source, only PAYGO funded expenditure will impact customer rates.

Table 26. Rate Study CIP Expenses by Expense Type, FY 2024 to FY 20297 CIP Funding Source FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Rate Funded $10,000,000 $11,489,919 $16,045,506 $16,805,125 $17,213,900 $17,430,600 Capacity Fee $2,332,638 $150,000 $14,500,000 $0 $0 $0
Grant Funded $2,273,708 $0 $0 $0 $0 $0
Total CIP $14,606,347 $11,639,919 $30,545,506 $16,805,125 $17,213,900 $17,430,600 Figure 6. Rate Study CIP Expenses by Funding Source, FY 2024 to FY 2029 $0
$5
$10
$15
$20
$25
$30
$35
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Millions
Rate Funded Capacity Fee (Developer) Grant Funded
Debt Service and Coverage Ratios
The City’s debt service schedule totals between $5.3 million and $5.6 million a year during the study period. Current debt obligations include rate refunded debt as well as capital leases. Table 27 shows the annual debt service payments which are allocated to the water fund. 7 City’s 10-year CIP budget as well as input from staff was used for project cost, project type, and funding source

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28 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 27. Water Fund Debt Service Payments, FY 2024 to FY 20298 Description FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Principal $2,585,736 $2,569,292 $2,700,067 $2,817,926 $2,946,626 $2,991,499 Interest $3,011,505 $3,067,405 $2,878,945 $2,690,018 $2,502,877 $2,309,703 Total Debt Service $5,597,241 $5,636,697 $5,579,011 $5,507,945 $5,449,503 $5,301,202 Table 28 shows the DSCR under the current finances detailed in the previous tables. Capital leases were removed from the DSCR calculation because they do not include a coverage requirement. To derive the DSCR, net revenue is divided by the total rate repaying debt service in each year.

Table 28. Water Debt Service Coverage Ratio Calculation, FY 2024 to FY 2029 Description FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Total Revenue $62,002,612 $61,619,419 $61,942,870 $62,270,687 $62,595,493 $62,922,237 Total Operating Expense $55,012,051 $58,968,574 $62,291,959 $65,703,913 $68,993,835 $72,439,218 Net Revenue $6,990,561 $2,650,845 ($349,089) ($3,433,226) ($6,398,341) ($9,516,981) Total Non-Lease Debt Service $3,398,915 $3,479,107 $3,542,931 $3,587,317 $3,634,265 $3,590,670 Debt Service Coverage Ratio 2.06 0.76 -0.10 -0.96 -1.76 -2.65 Under the current rates, the City will be in technical default beginning in FY 2025 as net revenues are not 125 percent greater than debt service payments. Figure 7 graphically shows the projected debt service coverage ratios based on the current financial plan.
8 City staff provided details of all current and planned debt service obligations

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29 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Figure 7. Debt Service Coverage Ratio Under Current Rates, FY 2024 to FY 2029 -3.00
-2.00
-1.00

0.00 1.00

2.00 3.00
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Debt Service Coverage Ratio DSCR Requirement
Reserves
The City must maintain an appropriate reserve balance to ensure the day-to-day operation will continue during emergencies and guarantee the future stability of the system. The City’s financial goal is to build an appropriate level of cash reserves for each reserve fund included in the financial plan of this Study.

The reserve target for the water utility is described below:
• Operating Reserve: three months of operating expenses plus annual depreciation The reserve target at the end of the study period reaches $26.4 million. Table 29 shows the City’s reserve targets for FY 2024 through FY 2029 based on the current reserve policy. Figure 8 displays the resulting cash balances versus the reserve target under the current rates. Reserve targets based on reserve policy shown in Table 18 and operating, capital, and debt service totals shown in Tables 25, 26, and 27, respectively.

Table 29. Water Reserve Target, FY 2024 to FY 2029
Reserve Fund FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Operating Reserve $22,073,911 $23,063,042 $23,893,888 $24,746,876 $25,569,357 $26,430,703 Page 90 of 2748 30 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Figure 8. Water Cash Balances and Reserve Target with Current Rates, FY 2024 to FY 2029

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31 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Financial Plan
Based on the projected total revenue and necessary costs to be recovered during the study period, RDN built a financial plan that will generate sufficient revenues for the day-to-day operation and annual PAYGO and make appropriate contributions to reserves. The City currently has a projected ending cash balance of $34.4 million in FY 2024. Table 30 shows the status quo water pro forma with no revenue adjustments and the resulting ending balances based on the revenues and expenses outlined in this section.

Table 30. Status Quo Financial Pro Forma for City of Corona Water System, FY 2024 to FY 2029 Rate Increase 0.0% 0.0% 0.0% 0.0% 0.0%
Rate Month Implemented
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Cash Position Opening Balance $ 43,004,670 $ 34,397,989 $ 19,922,218 $ (2,051,388) $ (27,797,684) $ (56,859,428) Revenues
Water Rate Revenue $ 57,960,000 $ 58,472,351 $ 58,753,631 $ 59,038,072 $ 59,323,736 $ 59,610,399 Adjusted Water Rate Revenue $ - $ - $ - $ - $ - $ -
Other Operating Revenue $ 2,209,480 $ 2,235,687 $ 2,260,130 $ 2,285,423 $ 2,306,122 $ 2,327,389 Non-Operating Revenue $ 1,833,132 $ 911,382 $ 929,109 $ 947,191 $ 965,635 $ 984,448 Total Revenues $ 62,002,612 $ 61,619,419 $ 61,942,870 $ 62,270,687 $ 62,595,493 $ 62,922,237 Operating Expenses $ 55,012,051 $ 58,968,574 $ 62,291,959 $ 65,703,913 $ 68,993,835 $ 72,439,218 Net Operating Revenues $ 6,990,561 $ 2,650,845 $ (349,089) $ (3,433,226) $ (6,398,341) $ (9,516,981) Current Rate Funded Debt Service $ 5,597,241 $ 5,636,697 $ 5,579,011 $ 5,507,945 $ 5,449,503 $ 5,301,202 New Debt Service $ - $ - $ - $ - $ - $ -
Total Rate Funded Debt Service $ 5,597,241 $ 5,636,697 $ 5,579,011 $ 5,507,945 $ 5,449,503 $ 5,301,202 Total Operating and Debt Service $ 60,609,292 $ 64,605,271 $ 67,870,971 $ 71,211,857 $ 74,443,337 $ 77,740,420 Total Operating and Debt Net Revenues $ 1,393,319 $ (2,985,852) $ (5,928,100) $ (8,941,170) $ (11,847,844) $ (14,818,184) Capital Expenditure $ 14,606,347 $ 11,639,919 $ 30,545,506 $ 16,805,125 $ 17,213,900 $ 17,430,600 Debt Proceeds Proposed $ - $ - $ - $ - $ - $ -
Debt Proceeds New $ - $ - $ - $ - $ - $ -
Capacity Fee $ 2,332,638 $ 150,000 $ 14,500,000 $ - $ - $ - Grants $ 2,273,708 $ - $ - $ - $ - $ -
Cash $ 10,000,000 $ 11,489,919 $ 16,045,506 $ 16,805,125 $ 17,213,900 $ 17,430,600 Net Income $ (8,606,681) $ (14,475,771) $ (21,973,606) $ (25,746,296) $ (29,061,744) $ (32,248,784) Ending Balance $ 34,397,989 $ 19,922,218 ($2,051,388) ($27,797,684) ($56,859,428) ($89,108,211)

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32 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 31 shows the proposed water pro forma for the study period with the recommended revenue adjustments per year. All revenue adjustments will occur in January of the Fiscal Year. The proposed financial plan also includes a $50 million debt issuance in FY 2026 which will allow the City to accomplish their long-term capital plan. This debt issuance has additional debt service payments and coverage requirements, which were included in the revenue adjustments.

Table 31. Proposed Financial Pro Forma for City of Corona Water System, FY 2024 to FY 2029 Rate Increase 9.0% 9.0% 9.0% 9.0% 9.0%
Rate Month Implemented 1-Jan 1-Jan 1-Jan 1-Jan 1-Jan
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Cash Position Opening Balance $ 43,004,670 $ 34,397,989 $ 22,553,474 $ 58,749,560 $ 44,012,195 $ 32,657,270 Revenues
Water Rate Revenue $ 57,960,000 $ 58,472,351 $ 58,753,631 $ 59,038,072 $ 59,323,736 $ 59,610,399 Adjusted Water Rate Revenue $ - $ 2,631,256 $ 8,169,692 $ 14,261,502 $ 20,959,391 $ 28,321,067 Other Operating Revenue $ 2,209,480 $ 2,235,687 $ 2,260,130 $ 2,285,423 $ 2,306,122 $ 2,327,389 Non-Operating Revenue $ 1,833,132 $ 911,382 $ 929,109 $ 947,191 $ 965,635 $ 984,448 Total Revenues $ 62,002,612 $ 64,250,675 $ 70,112,563 $ 76,532,189 $ 83,554,884 $ 91,243,303 Operating Expenses $ 55,012,051 $ 58,968,574 $ 62,291,959 $ 65,703,913 $ 68,993,835 $ 72,439,218 Net Operating Revenues $ 6,990,561 $ 5,282,101 $ 7,820,603 $ 10,828,277 $ 14,561,050 $ 18,804,085 Current Rate Funded Debt Service $ 5,597,241 $ 5,636,697 $ 5,579,011 $ 5,507,945 $ 5,449,503 $ 5,301,202 New Debt Service $ - $ - $ - $ 3,252,572 $ 3,252,572 $ 3,252,572 Total Debt Service $ 5,597,241 $ 5,636,697 $ 5,579,011 $ 8,760,516 $ 8,702,075 $ 8,553,774 Total Operating and Debt Service $ 60,609,292 $ 64,605,271 $ 67,870,971 $ 74,464,429 $ 77,695,909 $ 80,992,992 Net Revenues $ 1,393,319 $ (354,596) $ 2,241,592 $ 2,067,760 $ 5,858,975 $ 10,250,311 Capital Expenditure $ 14,606,347 $ 11,639,919 $ 30,545,506 $ 16,805,125 $ 17,213,900 $ 17,430,600 Debt Proceeds Proposed $ - $ - $ - $ - $ - $ -
Debt Proceeds New $ - $ - $ 50,000,000 $ - $ - $ -
Capacity Fee $ 2,332,638 $ 150,000 $ 14,500,000 $ - $ - $ - Grants $ 2,273,708 $ - $ - $ - $ - $ -
Cash $ 10,000,000 $ 11,489,919 $ (33,954,494) $ 16,805,125 $ 17,213,900 $ 17,430,600 Net Income $ (8,606,681) $ (11,844,515) $ 36,196,086 $ (14,737,365) $ (11,354,925) $ (7,180,289) Ending Balance $ 34,397,989 $22,553,474 $ 58,749,560 $44,012,195 $32,657,270 $25,476,981

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33 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Revenue Requirements
Table 32 displays the water utility’s revenue requirements for FY 2024. In the rate design section, the proposed revenue adjustments will be applied to the cost of service-based rates which were designed considering the FY 2024 expenses. The total expense for each year is offset by other operating revenues and non-operating revenues to compute a pure portion of revenue requirements that need to be recovered from customers’ rates. RDN proposes annual revenue adjustments of 9.0 percent FY 2025 through FY 2029 to reach the financial goals set by the City.

Table 32. Revenue Requirements for City of Corona Water Utility, FY 2024 Revenue Requirements FY 2024
O&M Expenses $55,012,051
Debt Service $5,597,241
Capital Expenditures $10,000,000
Other Operating Revenue ($2,209,480)
Non-Operating Revenue ($1,833,132)
Net Balance From Operations ($8,606,681)
Rate Revenue Requirement $57,960,000

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34 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

3.2 Cost of Service Analysis
The purpose of a Cost of Service (COS) analysis is to allocate costs among customers commensurate with their service requirements. RDN employed the “base-extra capacity” cost-of-service method promulgated in AWWA’s M1, whereby costs are first allocated to individual functions, which are typical industry standard activities, then the costs of each function are distributed to appropriate cost causative components, which are defined by the cost driving elements. The results of the COS form a reasonable, equitable basis for designing rates. Figure 9 displays a typical process for the COS analysis.

Figure 9. A Typical Flow for Cost of Service Analysis Process Functionalization of Costs
Operating and capital costs are functionalized based on operating categories used in the City’s budget and input from City staff with expertise on the system and utility industry knowledge. The functionalization of capital expenses is based on total water asset values, which represents a better overall estimate of systemwide needs versus just one year of capital expenditure. The functions of the water system for both operating and capital expenses include:
• Water Supply – costs associated with water procurement and purchases • Pumping – costs associated with general pumping and energy use • Storage – costs associated with water storage for distribution • Treatment – costs associated with treating water
• Transmission and Distribution – costs associated with transmitting and distributing water to customers
• Hydrants – costs associated with the maintenance of fire hydrants • Customer – costs associated with customer service and billing related tasks Functionalization
The revenue requirement is
assigned to various industry
standard activities on a line-by -
line basis.

Allocation to Cost Causative
Components
The functional categories are
allocated to base, Max Day
Demand, Peak Hourly Demand,
customer billing and meter costs.

Reallocation to Customers via
Rates
Each cost component is tied to
fixed and volumetric rate
components.

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35 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study • Meters – costs associated with the reading and maintenance of meters • Conservation – costs associated with the City’s conservation programs • Administrative and General – costs associated with administrative and general functions Costs and assets were functionalized based on industry standard budget determinations and input from staff. Table 33 shows the amount and percentage of test year operating expenses allocated to each function. Table 34 shows the amount and percentage of the City’s fixed assets allocated to each function.

Total assets were used as a proxy for the allocation of non-operating expenses because they represent the long-term investment in the system made by the City. A single year of non-operating expenses typically does not reflect an adequate ratio of overall system values.

Table 33. Percentage of Operating Costs Allocated to Standard Functions9 Category Allocation Percent
Total O&M $55,012,051 100.0%
Water Supply $19,940,381 36.2%
Transmission and Distribution $3,912,150 7.1%
Pumping $6,219,610 11.3%
Treatment $3,704,500 6.7%
Customer $2,513,710 4.6%
Conservation $567,994 1.0%
Administrative and General $18,153,706 33.0%
O&M Expense
Table 34. Percentage of Non-operating Costs Allocated to Standard Functions Category Allocation Percent
Total Assets $368,110,138 100.0%
Water Supply $3,949,211 1.1%
Groundwater $25,439,237 6.9%
Storage $35,010,321 9.5%
Transmission and Distribution $185,777,068 50.5%
Pumping $72,736,794 19.8%
Treatment $33,288,900 9.0%
Meters $2,510,674 0.7%
Hydrants $104,643 0.0%
Administrative and General $9,293,290 2.5%
Non-Operating Expense
A COS analysis considers both the average quantity of water consumed (base costs) and the peak rate at which it is consumed (peaking or capacity costs as identified by maximum day and maximum hour demands). Peaking costs are costs that are incurred during peak times of consumption. Title 22 of the 9 City staff provided allocations for all expenses and assets based on the standard categories shown

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36 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study California Code of Regulations (CCR) requires the City of Corona to have enough source capacity to meet the Maximum Day Demand (MDD) at all times. There are additional costs associated with designing, constructing, operating, and maintaining facilities to meet peak demands. All current and future water facilities, including water mains, pump stations, reservoirs, wells, and treatment plants, are designed and constructed to meet peak demands. If deficiencies are found, the existing facilities get upsized, or a secondary line or pump is installed to meet the peaking demands. These peak demand costs should be allocated to those customers whose water usage patterns generate additional costs for the utility. In other words, not all customer classes and not all customers share the same responsibility for peaking related costs. For the system to provide adequate service to its customers at all times, it must be capable of meeting not only the annual volume requirements, but also the peak demand - the maximum rate at which water is consumed. Therefore, the capacities of the various facilities must meet the maximum coincidental demand of all customers.

Each water service facility within the system has an underlying average demand, exerted by the customers for whom the base cost component applies. For those facilities designed solely to meet average daily demand, 100% of the cost should go to the base cost component. Extra capacity requirements associated with demand in excess of average use consist of Max Day Demand and Peak Hourly Demand (PHD). Base demand and MDD demand were calculated based on historical customer usage for the most recent year that data was fully available, FY 2023. Base demand was calculated as the total demand divided by the number of days in a year. MDD was calculated by taking the highest use month, September, and dividing that by the number of days in the month, 30. Based on the MDD factor, RDN estimated the average hourly flow during the max day by multiplying it by a peaking factor of 1.5 (the lowest factor recommended by the State Board’s Division of Drinking Water10) to compute a PHD factor. Functions that require capacity to perform at base and MDD levels were allocated based on the ratio of base demand compared to MDD, or 72.4 percent and 27.6 percent, respectively. Additionally, the costs associated with the functions which require extra capacity service requirements were distributed to the base, MDD, and PHD cost components at 58.6 percent, 22.3 percent, and 19.1 percent, respectively.

Table 35 shows the systemwide peaking factors based on customer use patterns as described. 10 California Public Utilities Commission. Standard Practice for Determination of Water Supply Requirements, Standard Practice U-22. San Francisco. 2000

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37 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 35. System-Wide Peaking Factors
Factor Base Max Day Max Hour
Use 31,606 43,648 70,525
Base 1.00 100.0% 0.0% 0.0%
Max Day 1.38 72.4% 27.6% 0.0%
Max Hour 2.23 44.8% 17.1% 38.1%
Average Max Day/Max Hour 58.6% 22.3% 19.1%
The cost causative components include:
• Source of Supply – water purchase costs, groundwater procurement, pumping costs, etc. • Base – delivering water to customers under average demand conditions • Maximum Day Demand (MDD) – the costs of delivering water to customers on the day with the highest demand
• Peaking Hourly Demand (PHD) – the costs of delivering water to customers on the hour with the highest demand on highest day
• Meters – the costs of servicing and reading meters
• Fire Protection Service – the costs of providing water service for public and private fire protection services
• Customer Service – billing and other customer service-related costs • Conservation – the cost to administer the City’s conservation program Water supply costs are allocated 100 percent to the Supply component as they relate to purchasing water from other agencies as well as groundwater. Storage costs are proportionally allocated between Base and Max Day based on the maximum day allocation.

Transmission and distribution and Pumping costs are proportionally allocated between Base, Max Day, and Peak Hour based on the Average Max Day/Peak Hour costs. These costs are allocated based on the average maximum day and maximum hour because transmission infrastructure is constructed to meet maximum day demand and distribution pipelines are constructed to meet maximum hour demand plus fire flow.

Treatment-related costs are allocated to source of supply as treatment costs are incurred based on the available water supply. Administrative and general costs are allocated to cost components based on the percentage of the functions allocated to the other cost categories.

Table 36 through Table 39 show the percent and total value of functionalized operating costs and assets allocated to the cost causative components. Meter, fire protection, customer service, and conservation costs were allocated directly to their respective component.

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38 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 36. Percent of Operating Function Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Fire Protection
Customer
Service Conservation
Water Supply $19,940,381 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Transmission and Distribution $3,912,150 0.0% 58.6% 22.3% 19.1% 0.0% 0.0% 0.0% 0.0% Pumping $6,219,610 0.0% 58.6% 22.3% 19.1% 0.0% 0.0% 0.0% 0.0% Treatment $3,704,500 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Customer $2,513,710 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% Conservation $567,994 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% Administrative and General $18,153,706 0.0% 39.2% 14.9% 12.7% 0.0% 0.0% 27.0% 6.1% O&M Expense
Table 37. Total of Operating Functional Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Fire
Protection
Customer
Service Conservation
Water Supply $19,940,381 $19,940,381 $0 $0 $0 $0 $0 $0 $0 Transmission and Distribution $3,912,150 $0 $2,293,009 $873,675 $745,466 $0 $0 $0 $0 Pumping $6,219,610 $0 $3,645,468 $1,388,985 $1,185,156 $0 $0 $0 $0 Treatment $3,704,500 $3,704,500 $0 $0 $0 $0 $0 $0 $0
Customer $2,513,710 $0 $0 $0 $0 $0 $0 $2,513,710 $0
Conservation $567,994 $0 $0 $0 $0 $0 $0 $0 $567,994
Administrative and General $18,153,706 $0 $7,114,990 $2,710,932 $2,313,112 $0 $0 $4,906,097 $1,108,574 Percent of Total 100.0% 43.0% 23.7% 9.0% 7.7% 0.0% 0.0% 13.5% 3.0% O&M Expense
Table 38. Percent of Non-Operating Function Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Fire Protection
Customer
Service Conservation
Water Supply $3,949,211 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Groundwater $25,439,237 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Storage $35,010,321 0.0% 72.4% 27.6% 0.0% 0.0% 0.0% 0.0% 0.0% Transmission and Distribution $185,777,068 0.0% 58.6% 22.3% 19.1% 0.0% 0.0% 0.0% 0.0% Pumping $72,736,794 0.0% 58.6% 22.3% 19.1% 0.0% 0.0% 0.0% 0.0% Treatment $33,288,900 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Meters $2,510,674 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 0.0% Hydrants $104,643 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% Administrative and General $9,293,290 0.0% 61.6% 23.5% 12.6% 2.3% 0.1% 0.0% 0.0% Non-Operating Expense

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39 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 39. Total of Non-Operating Functional Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Fire
Protection
Customer
Service Conservation
Water Supply $3,949,211 $3,949,211 $0 $0 $0 $0 $0 $0 $0 Groundwater $25,439,237 $25,439,237 $0 $0 $0 $0 $0 $0 $0 Storage $35,010,321 $0 $25,351,115 $9,659,206 $0 $0 $0 $0 $0 Transmission and Distribution $185,777,068 $0 $108,888,565 $41,488,396 $35,400,107 $0 $0 $0 $0 Pumping $72,736,794 $0 $42,632,846 $16,243,840 $13,860,108 $0 $0 $0 $0 Treatment $33,288,900 $33,288,900 $0 $0 $0 $0 $0 $0 $0
Meters $2,510,674 $0 $0 $0 $0 $2,510,674 $0 $0 $0
Hydrants $104,643 $0 $0 $0 $0 $0 $104,643 $0 $0
Administrative and General $9,293,290 $0 $5,724,726 $2,181,218 $1,167,118 $211,416 $8,812 $0 $0 Percent of Total 100.0% 17.0% 49.6% 18.9% 13.7% 0.7% 0.03% 0.0% 0.0% Non-Operating Expense
The non-operating expenses for the test year are made up of debt service payments and capital expenditures totaling approximately $15.6 million. Those costs are distributed to the cost components based on the final percentages shown in Table 39, above, which are based on the total asset values of water assets owned by the City. Water asset values represent the long-term investment in the City’s water system and are proxy value for how a single year of non-operating expenses should be allocated. Asset values do not significantly fluctuate year over year as annual capital expenditures do, which ensures that cost categories are accurately represented. Operating allocations are based on the projected test year expenses and the total for each cost component reflect the percentages in Table 37. Table 40 shows the projected test year expenses allocated to each cost component based on the percentages in Table 37 and Table 39.

Table 40. Operating and Non-Operating Cost Allocation to Cost Components Cost Component Operating
Percentage
Operating
Costs
Non-Operating
Percentage
Non-Operating
Costs
Total 100.0% $55,012,051 100.0% $15,597,241
Source of Supply 43.0% $23,644,881 17.0% $2,655,710
Base 23.7% $13,053,467 49.6% $7,736,851
MDD 9.0% $4,973,593 18.9% $2,947,872
PHD 7.7% $4,243,734 13.7% $2,136,663
Meters 0.0% $0 0.7% $115,338
Fire Protection 0.0% $0 0.03% $4,807
Customer Service 13.5% $7,419,807 0.0% $0
Conservation 3.0% $1,676,568 0.0% $0

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40 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 41 shows the cost allocation by cost causative components under the proposed financial plan before adjustments. Revenue offsets made up of non-operating revenues for FY 2024 shown in Table 23 will be used to offset purchased water costs in the rate design section.

Other operating revenues are allocated to each cost component based on the overall cost allocation percentages shown in the “percent of total” row.

Table 41. Rate Revenue Requirements for Test Year, FY 2024 Cost Allocation Summary Total Source of
Supply Base MDD PHD Meters Fire Protection
Customer
Service Conservation
O&M Revenue Requirements $55,012,051 $23,644,881 $13,053,467 $4,973,593 $4,243,734 $0 $0 $7,419,807 $1,676,568 Non-Operating Revenue Requirements $15,597,241 $2,655,710 $7,736,851 $2,947,872 $2,136,663 $115,338 $4,807 $0 $0 Total $70,609,292 $26,300,591 $20,790,318 $7,921,465 $6,380,397 $115,338 $4,807 $7,419,807 $1,676,568 Percent of Total 37.2% 29.4% 11.2% 9.0% 0.2% 0.0% 10.5% 2.4% Water systems provide two types of fire protection: public fire protection for firefighting, which is generally visible as hydrants on a street, and private fire protection which provides fire flow to building and other structure sprinkler systems for fire suppression within private improvements. To determine the share of total fire costs responsible to each, fire service must additionally be allocated between private and public fire connections. There are a total of 1,324 private fire connections and public fire connections total 8,537 meters. The allocation of fire costs is based on the ratio of equivalent fire meters shown in Table 21. City staff confirmed that public fire lines were connected to 6” lines, thus, 80.8 percent of the allocation is for public fire and 19.2 percent for private fire. Table 42 shows the percentage of fire costs allocated to each customer class based on potential fire flow. Public fire costs are reallocated to the meter component of the cost allocation.

Table 42. Allocation of Fire Costs
Customer Class Equivalent
Meters Percent Total Fire Allocation
Allocation by
Class
Private Fire 225,638 19.2% $203,083
Public Fire 950,261 80.8% $859,343
1,175,899.2 $1,062,426
Because they are a function of system capacity, base and peak costs are also reallocated to the meter component at a rate of 75 percent for base and 50 percent for the peak costs which will help stabilize revenues by increasing the fixed revenue collection. Utilities invest in,

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41 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study and continuously maintain, facilities to provide capacity to meet all levels of water consumption, including average and peak demand.

These costs must be recovered regardless of the amount of water used during a given period. Thus, peaking costs, along with base delivery costs and fixed water system costs to meet average demand, are generally considered as fixed water system costs. To balance affordability and revenue stability, it is a common practice that a portion of the base costs and/or peaking costs are recovered in the monthly service charge, along with customer-related costs and meter-related costs. This allocation allows the City to maintain an overall fixed rate revenue percentage of 43.9 percent of the total revenues, which was a target level for increasing revenue stability. Table 43 shows the total cost allocation by cost category that will be used to allocate costs to each customer. Other operating revenue and net balances are applied based on the overall percentages allocated to each cost category in the percent of total line. Non-operating revenues are comprised of interest on investments and are applied directly to offset the cost of variable rates.

Table 43. Final Cost of Service Allocations with all Adjustments Cost Allocation Summary Total Source of
Supply Base MDD PHD Meters Fire Protection
Customer
Service Conservation Private Fire Revenue Offset
O&M Revenue Requirements $55,012,051 $23,644,881 $13,053,467 $4,973,593 $4,243,734 $0 $0 $7,419,807 $1,676,568 $0 $0 Non-Operating Revenue Requirements $15,597,241 $2,655,710 $7,736,851 $2,947,872 $2,136,663 $115,338 $4,807 $0 $0 $0 $0 Total $70,609,292 $26,300,591 $20,790,318 $7,921,465 $6,380,397 $115,338 $4,807 $7,419,807 $1,676,568 $0 $0 Percent of Total 37.2% 29.4% 11.2% 9.0% 0.2% 0.0% 10.5% 2.4% 0.00% 0.0% Other Operating Revenue ($2,209,480) ($822,988) ($650,563) ($247,876) ($199,653) ($3,609) ($150) ($232,178) ($52,463) $0 $0 Non-Operating Revenue ($1,833,132) $0 $0 $0 $0 $0 $0 $0 $0 $0 ($1,833,132) Net Balance From Operations ($8,606,681) ($3,205,821) ($2,534,165) ($965,560) ($777,717) ($14,059) ($586) ($904,412) ($204,360) $0 $0 Rate Revenue Requirement $57,960,000 $22,271,781 $17,605,590 $6,708,029 $5,403,027 $97,670 $4,071 $6,283,217 $1,419,746 $0 ($1,833,132) Re-Allocation of Peaking and Base $0 ($13,204,192) ($3,354,015) ($2,701,514) $19,259,721 $0 $0 $0 $0 $0 Re-Allocation to Fire Protection $0 $0 $0 $0 ($1,058,355) $1,058,355 $0 $0 $0 $0 Re-Alignment of Public and Private Fire $0 $0 $0 $0 $0 ($203,083) $0 $0 $203,083 $0 Final Cost Allocation $57,960,000 $22,271,781 $4,401,397 $3,354,015 $2,701,514 $18,299,036 $859,343 $6,283,217 $1,419,746 $203,083 ($1,833,132) Adjustments

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42 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Allocation to Units
The final step of the COS analysis is to allocate the cost causative components back to the customers.

In order to perform this, unit values were determined for each cost component. Table 48 shows the number of systemwide units under each category. Equivalent meters are determined by multiplying the total meters by their equivalent meter value. Table 44 shows the meters currently connected to the water system and the number of equivalent meters based on AWWA meter equivalency factors.

Table 44. Total Equivalent Meters Used for Cost Allocation Meter Size Number of
Meters
Equivalance
Factor
Total
Equivalent
Meters
5/8" 5,561 1.00 5,561
3/4" 28,990 1.50 43,485
1" 7,141 2.50 17,853
1 1/2" 1,299 5.00 6,495
2" 1,253 8.00 10,024
3" 110 17.50 1,925
4" 162 31.50 5,103
6" 509 80.00 40,720
8" 494 140.00 69,160
10" 112 210.00 23,520
Total 45,631 223,846
All use categories (Water Use, Max Month, Average Day, Max Day, and Peak Hourly) were calculated based on actual (billed) customer use and are expressed in hcf. As previously described, average day demand constitutes the entire year of use divided by the number of days in a year. Max day demand takes the use during the highest use month (September) and divides that by the number of days in the month (30). Peak hourly demand is estimated by taking the difference between average day and max day demand and multiplying the result by a factor of 1.5. This results in the total capacity, with extra capacity calculated by subtracting the average daily use from the total capacity for either max day or max hour. Table 45 shows the water use values used to calculate units for the cost of service allocation. Table 46 shows the percent of total peak costs allocated to each tier based on the total capacity difference and extra capacity within that tier based on actual use patterns.

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43 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 45. Total Use and Peak Values used for Cost Allocation Customer Class Annual Use
(hcf)
Daily Potable
Use
Capacity
Factor
Total
Capacity Extra Capacity Capacity Factor
Total
Capacity
Extra
Capacity
Residential Single Family - Potable 7,533,472 20,640 1.36 28,103 7,463 2.04 42,154 14,051 Residential Multi-Family - Potable 1,173,134 3,214 1.12 3,599 385 1.68 5,399 1,800 Commercial - Potable 1,054,265 2,888 1.21 3,498 609 1.82 5,247 1,749 Governmental - Potable 173,504 475 1.45 688 212 2.17 1,032 344 Industrial - Potable 369,960 1,014 1.25 1,271 258 1.88 1,907 636 Residential Single Family - Landscape 30,867 85 1.53 129 45 2.29 194 65 Residential Multi-Family - Landscape 31,755 87 1.70 148 61 2.56 222 74 Commercial - Landscape 845,627 2,317 1.58 3,667 1,350 2.37 5,500 1,833 Governmental - Landscape 296,537 812 1.61 1,311 499 2.42 1,967 656 Industrial - Landscape 26,955 74 1.49 110 36 2.24 165 55 Commercial - Hydrant - - - - - - - -
Governmental - Hydrant - - - - - - - -
Public Fire - - - 1,123 1,123 - 6,738 5,615
Total 11,536,076 31,606 43,648 12,042 70,525 26,877
Max Day Peak Hour
Table 46. Tier Use and Peak Values used for Cost Allocation11 Tier Annual Use
(hcf)
Daily
Potable Use
Capacity
Factor
Total
Capacity
Extra
Capacity
Capacity
Factor
Total
Capacity
Extra
Capacity
Percent of
Peak Costs
Tier 1 3,990,752 10,934 1.07 11,701 767 1.61 17,551 5,850 13.7% Tier 2 5,756,614 15,772 1.58 24,943 9,172 2.37 37,415 12,472 61.5% Tier 3 1,133,262 3,105 1.68 5,203 2,098 2.51 7,805 2,602 13.6% Tier 4 655,449 1,796 2.04 3,665 1,869 3.06 5,497 1,832 11.3% Total 11,536,076 31,606 45,512 13,906 68,268 22,756 100% Max Day Peak Hour
The number of bills in one year (the number of accounts multiplied by 12) serves as the basis for distributing billing and customer service costs associated with meter reading, customer billing and collection, and other customer services costs. The number of equivalent meters is used to distribute meter related service costs. Fire flow and duration estimates from the M1 Manual were utilized to allocate public fire costs to each customer class. Table 47 shows the total fire flow by customer class, where the total customers in each class were multiplied by the total flow and duration. 11 Note that the differences in capacity for each tier are different than the overall capacity differences within a customer class because of the volatility of use in the upper tiers, so the ratio of capacity is used to apply costs to each tier.

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44 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 47. Estimated Fire Flow by Customer Class
Fire Service Demands by Customer Class HCF
Customer Class Customers Max Fire Flow Duration Fire Service Demands Residential Single Family - Potable 37,167 1,500 120 8,943,930 Residential Multi-Family - Potable 3,867 2,500 120 1,550,936 Commercial - Potable 1,549 3,000 240 1,491,016
Governmental - Potable 156 3,000 240 150,160
Industrial - Potable 649 3,500 240 728,824
Residential Single Family - Landscape 33 1,500 240 15,882 Residential Multi-Family - Landscape 10 2,500 240 8,061 Commercial - Landscape 567 3,000 240 545,775
Governmental - Landscape 231 3,000 240 222,353
Industrial - Landscape 24 3,500 240 26,952
Commercial - Hydrant 52 3,000 240 50,053
Total FP Units 44,305 13,733,944
Table 48 shows the sum of systemwide units used to derive unit costs for each cost category.

Table 48. Cost of Service Units
Unit Count of
Units
Count Less Fire
Allocation
Bills 547,573 547,573
Equivalent Meters 223,846 85,778
Water Use 11,536,076 11,536,076
Max Month 1,277,061 1,277,061
Average Day 31,606 31,606
Max Day 43,648 42,525
Max Day Extra 12,042 10,919
Peak Hourly 70,525 63,787
Peak Hour Extra 26,877 21,262
Fire Flow 13,733,944 -
Table 49 shows the total cost allocation by cost component divided by the corresponding unit values to develop a unit cost for each. Max Day Demand and Peak Hourly Demand costs are divided by the extra demand at each level to account for the additional use in that category and applied to each class and tier.

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45 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 49. Rate Revenue Requirements Divided by the Corresponding Units Total Source of
Supply Base MDD PHD
Rate Revenue Requirement $57,960,000 $22,271,781 $4,401,397 $3,354,015 $2,701,514 Units 11,536,076 11,536,076 10,919 21,262
Unit Cost $1.93 $0.38 $307.16 $127.06
Meters Customer
Service
Conservation Private Fire Revenue Offset
Rate Revenue Requirement $18,299,036 $6,283,217 $1,419,746 $203,083 ($1,833,132) Units 85,778 547,573 11,536,076 - 11,536,076
Unit Cost $213.33 $11.47 $0.12 $203,083 ($0.16)
Public Fire
Indirect
Rate Revenue Requirement $859,343
Units 13,733,944
Unit Cost $0.06
Allocation to Customer Classes
The City currently maintains 13 distinct customer classes, though each individual customer receives a water budget, so rates are determined based on the total cost of service and divided by the requirements of each customer. The total units of service by customer class are shown in Table 50. Table 51 shows the cost of service allocated to each customer class based on the units of service. The total rate revenue requirements which need to be recovered from customers is also shown, this amount includes the cost of service allocation and the non-operating revenues (offsets) which are applied directly to the variable rates. The total revenue requirements reflect the final cost allocation in Table 43Table 43.

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46 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 50. Unit of Service by Customer Class
$1.93 $0.38 $307.16 $127.06 $213.33 $203,082.89 $11.47 $0.12 ($0.16) $0.06 Customer Class Source of
Supply Base MDD PHD Meters Private Fire Customer
Service Conservation Revenue
Offset
Public Fire
Indirect
Residential Single Family - Potable 7,533,472 7,533,472 7,463 14,051 60,107 446,004 7,533,472 7,533,472 8,943,930 Residential Multi-Family - Potable 1,173,134 1,173,134 385 1,800 8,757 46,404 1,173,134 1,173,134 1,550,936 Commercial - Potable 1,054,265 1,054,265 609 1,749 7,343 18,588 1,054,265 1,054,265 1,491,016 Governmental - Potable 173,504 173,504 212 344 1,126 1,872 173,504 173,504 150,160 Industrial - Potable 369,960 369,960 258 636 3,089 7,788 369,960 369,960 728,824 Residential Single Family - Landscape 30,867 30,867 45 65 127 396 30,867 30,867 15,882 Residential Multi-Family - Landscape 31,755 31,755 61 74 80 121 31,755 31,755 8,061 Commercial - Landscape 845,627 845,627 1,350 1,833 2,986 6,804 845,627 845,627 545,775 Governmental - Landscape 296,537 296,537 499 656 886 2,772 296,537 296,537 222,353 Industrial - Landscape 26,955 26,955 36 55 144 288 26,955 26,955 26,952 Commercial - Hydrant 0 0 0 0 1,100 624 0 0 50,053
Governmental - Hydrant 0 0 0 0 35 24 0 0 0
Private Fire 138,068 15,888
Total 11,536,076 11,536,076 10,919 21,262 85,778 138,068 547,573 11,536,076 11,536,076 13,733,944 Table 51. Cost of Service by Customer Class
Customer Class Total Source of
Supply Base MDD PHD Meters Private
Fire
Customer
Service Conservation Revenue Offset
Public Fire
Indirect
Residential Single Family - Potable $39,726,386 $14,544,273 $2,874,271 $2,292,453 $1,785,314 $12,822,652 $0 $5,117,751 $927,145 -$1,197,101 $559,628 Residential Multi-Family - Potable $5,514,984 $2,264,876 $447,590 $118,355 $228,660 $1,868,028 $0 $532,471 $144,378 -$186,416 $97,043 Commercial - Potable $4,682,182 $2,035,385 $402,237 $187,170 $222,204 $1,566,379 $0 $213,291 $129,748 -$167,527 $93,294 Governmental - Potable $774,871 $334,970 $66,198 $65,248 $43,693 $240,103 $0 $21,481 $21,353 -$27,571 $9,396 Industrial - Potable $1,796,023 $714,252 $141,152 $79,166 $80,764 $658,978 $0 $89,365 $45,531 -$58,788 $45,603 Residential Single Family - Landscape $124,671 $59,592 $11,777 $13,682 $8,202 $26,986 $0 $4,544 $3,799 -$4,905 $994 Residential Multi-Family - Landscape $119,567 $61,307 $12,116 $18,823 $9,420 $17,152 $0 $1,384 $3,908 -$5,046 $504 Commercial - Landscape $3,321,829 $1,632,585 $322,635 $414,729 $232,954 $637,005 $0 $78,074 $104,071 -$134,374 $34,150 Governmental - Landscape $1,146,235 $572,500 $113,139 $153,195 $83,296 $189,011 $0 $31,808 $36,495 -$47,121 $13,913 Industrial - Landscape $115,268 $52,040 $10,284 $11,192 $7,006 $30,720 $0 $3,305 $3,317 -$4,283 $1,686 Commercial - Hydrant $244,849 $0 $0 $0 $0 $234,557 $0 $7,160 $0 $0 $3,132 Governmental - Hydrant $7,742 $0 $0 $0 $0 $7,467 $0 $275 $0 $0 $0 Private Fire $385,393 $0 $0 $0 $0 $0 $203,083 $182,310 $0 $0 $0 Total $57,960,000 $22,271,781 $4,401,397 $3,354,015 $2,701,514 $18,299,036 $203,083 $6,283,217 $1,419,746 ($1,833,132) $859,343

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47 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

3.3 Water Rate Design
RDN proposes the following adjustments to customer water rate structures:
• Adjusting rates annually by the recommended revenue adjustments of 9.0 percent per year • Increasing the fixed proportion of rate collection
• Reducing the indoor allocation based on State regulations • Removing the highest cost tier to simplify the rate structure The water rates have two components: 1) a fixed monthly service charge and 2) volumetric rates.

Customers must pay the fixed charge regardless of the water use. In addition, the customers pay volumetric rates based on the volume of water use.

1. Fixed monthly service charge: the rates are established based on the size of the meter at the property receiving water service and are calculated to recover a portion of the City’s fixed costs, such as water facilities repairs and replacements, meter reading, and customer service.

2. Variable rates: the rates are calculated based on the cost of water supplies, the cost of managing the City’s water resources at regular and peak use and distributing water throughout the system to customers. The remaining fixed costs that are not recovered via fixed charges are also recovered from variable charges. The rates are billed per hundred cubic feet.

Together, the two components (fixed and variable) are calculated to recover the proportionate cost of providing water service attributable to each customer. Table 52 shows the costs which are allocated to either fixed or variable rates. The revenue offset is made up of non-operating revenues which will be collected in the test year and primarily includes interest.

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48 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 52. Allocation of Fixed and Variable Costs12
Monthly Fixed Charge
All meter costs are divided by the number of equivalent meters using the AWWA ratio discussed in the Key Assumptions section to compute the unit cost for each cost component. Customer service costs are simply divided by the number of bills since the service requirements of this cost type are the same regardless of the meter size installed on a property. Table 53 shows the total costs allocated to each cost category, the number of units for the category, and the cost for a year and a month of service for each cost unit. The resulting monthly unit costs are used to calculate the fixed customer rates.

Table 53. Fixed Cost Components Divided by Number of Units Cost Units Cost
per Unit
Cost per
Month
Meter and Public Fire $19,158,379 85,778 $223.35 $18.61 Service $6,283,217 45,631 $137.70 $11.47
Table 54 shows the monthly fixed charge calculation by meter size for water service customer connections.
12 Revenue offsets are the direct use of non-operating revenues shown in table 23 to offset variable rates Expense Category Fixed Variable
Source of Supply $22,271,781
Base $4,401,397
MDD $3,354,015
PHD $2,701,514
Meters $18,299,036
Private Fire $203,083
Public Fire $859,343
Customer Service $6,283,217
Conservation $1,419,746
Revenue Offset -$1,833,132

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49 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 54. Monthly Water Service Fixed Charge Calculation13 Meter
Size
Meter
Charge
Meter
Ratio
Total
Meter
Customer
Service
Monthly
Rate
5/8" $18.61 x 1.00 = $18.61 + $11.47 = $30.09
3/4" $18.61 x 1.50 = $27.92 + $11.47 = $39.39
1" $18.61 x 2.50 = $46.53 + $11.47 = $58.01
1 1/2" $18.61 x 5.00 = $93.06 + $11.47 = $104.54
2" $18.61 x 8.00 = $148.90 + $11.47 = $160.37
3" $18.61 x 17.50 = $325.72 + $11.47 = $337.19
4" $18.61 x 31.50 = $586.29 + $11.47 = $597.76
6" $18.61 x 80.00 = $1,488.99 + $11.47 = $1,500.47
8" $18.61 x 140.00 = $2,605.73 + $11.47 = $2,617.21
10" $18.61 x 210.00 = $3,908.60 + $11.47 = $3,920.08
The proposed monthly fixed charge before revenue adjustments for the base equivalent meter (5/8 inch) is $30.09 per month.

The proposed five-year monthly fixed charges with revenue adjustments applied for all water customers are shown in Table 55. FY 2025 rates are based on the cost of service rates times the revenue adjustment.

Table 55. Proposed 5-year Fixed Charge Schedule
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Proposed Adjustment 9.0% 9.0% 9.0% 9.0% 9.0%
Meter Size FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
5/8" $32.79 $35.75 $38.96 $42.47 $46.29
3/4" $42.94 $46.80 $51.02 $55.61 $60.61
1" $63.23 $68.92 $75.12 $81.88 $89.25
1 1/2" $113.94 $124.20 $135.38 $147.56 $160.84
2" $174.81 $190.54 $207.69 $226.38 $246.75
3" $367.54 $400.62 $436.67 $475.97 $518.81
4" $651.56 $710.20 $774.12 $843.79 $919.74
6" $1,635.51 $1,782.70 $1,943.15 $2,118.03 $2,308.65
8" $2,852.76 $3,109.51 $3,389.36 $3,694.40 $4,026.90
10" $4,272.88 $4,657.44 $5,076.61 $5,533.51 $6,031.52
Monthly Fire Fixed Charge
All meter costs are divided by the number of equivalent meters using the AWWA fire ratio discussed in the Key Assumptions section to compute the unit cost for each cost component. Customer service costs 13 Note that some calculations may be impacted by rounding to two decimal points

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50 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study are simply divided by the number of bills since the service requirements of this cost type are the same regardless of the meter size installed on a property. Table 56 shows the total costs allocated to each cost category, the number of units for the category, and the cost for a year and a month of service for each cost unit. The resulting monthly unit costs are used to calculate the fixed customer rates.

Table 56. Fixed Cost Components Divided by Number of Units Cost Units Cost
per Unit
Cost per
Month
Meter $203,083 138,068 $1.47 $0.12
Service $6,283,217 45,631 $137.70 $11.47
Table 57 shows the monthly fixed charge calculation by meter size for water service customer connections. FY 2025 rates are based on the cost of service rates times the revenue adjustment.

Table 57. Monthly Water Service Fixed Charge Calculation14 Meter
Size
Meter
Charge
Meter
Ratio
Total
Meter
Customer
Service
Monthly
Rate
5/8" $0.12 x 1.00 = $0.12 + $11.47 = $11.60
3/4" $0.12 x 1.00 = $0.12 + $11.47 = $11.60
1" $0.12 x 1.00 = $0.12 + $11.47 = $11.60
1 1/2" $0.12 x 6.19 = $0.76 + $11.47 = $12.23
2" $0.12 x 17.98 = $2.20 + $11.47 = $13.68
3" $0.12 x 38.32 = $4.70 + $11.47 = $16.17
4" $0.12 x 111.31 = $13.64 + $11.47 = $25.12
6" $0.12 x 237.21 = $29.08 + $11.47 = $40.55
8" $0.12 x 426.58 = $52.29 + $11.47 = $63.76
10" $0.12 x 689.04 = $84.46 + $11.47 = $95.93
The proposed monthly fixed charge for the base equivalent meter (5/8 inch) is $11.60 per month.

The proposed five-year monthly fixed charges for all water customers are shown in Table 58:
14 Note that some calculations may be impacted by rounding to two decimal points

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51 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 58. Proposed 5-year Fixed Charge Schedule
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Proposed Adjustment 9.0% 9.0% 9.0% 9.0% 9.0%
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
5/8" $12.64 $13.78 $15.02 $16.37 $17.84
3/4" $12.64 $13.78 $15.02 $16.37 $17.84
1" $12.64 $13.78 $15.02 $16.37 $17.84
1 1/2" $13.33 $14.53 $15.84 $17.27 $18.82
2" $14.91 $16.25 $17.71 $19.31 $21.05
3" $17.63 $19.21 $20.94 $22.83 $24.88
4" $27.38 $29.84 $32.53 $35.46 $38.65
6" $44.20 $48.18 $52.51 $57.24 $62.39
8" $69.50 $75.76 $82.57 $90.01 $98.11
10" $104.57 $113.98 $124.24 $135.42 $147.61
Variable Water Rates
Variable rates are designed based on variable costs such as water purchases, conservation, treatment, and base and peak delivery costs. The current rate structure was generally maintained to mitigate rate impacts, except the indoor budgets for residential customers was reduced based on the per capita water use standards being lowered by the State. Variable rates are made up of a number of cost components, all derived individually for each customer class: Water Supply, Base Costs, Peaking Costs, and Conservation Costs. Water supply costs are offset by the City’s non-operating revenues.

Water Supply
It is assumed that the City will utilize cheaper water sources before more expensive ones. The City’s cheapest water source is locally produced groundwater while purchased water is more expensive. The City’s available supply and costs are shown in Table 59. Additional supply costs identified in the cost of service analysis are included in each source based on the percentage of the total purchase costs. The unit cost for each water source is developed by dividing the total supply cost by the total available supply.

Table 59. Available Water Supply and Costs15
Water Source Produced
Supply (hcf)
Water Loss
(hcf)
Available
Supply
Allocated
Cost
Cost per
hcf
Local Production 5,068,012 506,801 4,561,211 $6,360,210 $1.39 Purchased Water 7,672,352 697,487 6,974,865 $15,911,571 $2.28 Proposed Tier Widths
15 Projected water supply costs and projected availability were provided by City engineering staff

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52 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study The following formula displays a typical indoor water budget calculation for residential customers. RDN recommends that Gallons per Capita per Day (GPCD) should be reduced from 55 GPCD to 47 GPCD under the proposed rate structure to be consistent with the State upcoming requirements under AB 1668 and SB 606.

Indoor Water Budget (Residential Customers)
=
𝑮𝑷𝑪𝑫
𝟕𝟒𝟖 𝒈𝒂𝒍𝒍𝒐𝒏𝒔/𝒉𝒄𝒇 × 𝑯𝒐𝒖𝒔𝒆𝒉𝒐𝒍𝒅 𝑺𝒊𝒛𝒆 × # 𝒐𝒇 𝑫𝒘𝒆𝒍𝒍𝒊𝒏𝒈 𝑼𝒏𝒊𝒕𝒔 × 𝑫𝒂𝒚𝒔 𝒐𝒇 𝑺𝒆𝒓𝒗𝒊𝒄𝒆 Where:

GPCD – Gallons per Capita per Day, currently set at 55. RDN recommends setting GPCD at 47 under the proposed rates.

Household Size – Number of residents per dwelling unit, set at 4 for SFR customers unless a customer variance has been requested. The default household size for the proposed rates is set at 4 for SFR customers and 2 for MFR customers.

Dwelling Units – The number of dwelling units served by the meter. For example, a SFR customer’s number of dwelling unit is one.

Days of Service – Number of days of service varies with each billing cycle for each customer. The actual number of days of service will be applied to calculate the indoor water budget for each billing cycle. 748 is the conversion unit from gallons to a billing unit of one hundred cubic feet currently used by the City.

When using these default numbers to calculate a hypothetical SFR customer’s indoor water budget under the current rates in a hypothetical month (30 billing days), the water budget for this customer is 8.8 hcf a month. Decimal points, or portions of hcf are rounded up. In this hypothetical example, the calculated budget is 8.8 hcf, rounded up to 9 hcf.

Example for a SFR Indoor Water Budget (Current)
=
55 𝐺𝑃𝐶𝐷
748 𝑔𝑎𝑙𝑙𝑜𝑛𝑠/ℎ𝑐𝑓 × 4 𝑝𝑒𝑟𝑠𝑜𝑛𝑠 × 1 𝑢𝑛𝑖𝑡 × 30 𝑑𝑎𝑦𝑠 = 8.8 ℎ𝑐𝑓 RDN recommends reducing GPCD from 55 to 47 for the proposed rate structure. The following equation shows the proposed indoor allocation.

Example for a SFR Indoor Water Budget (Proposed)
=
47 𝐺𝑃𝐶𝐷
748 𝑔𝑎𝑙𝑙𝑜𝑛𝑠/ℎ𝑐𝑓 × 4 𝑝𝑒𝑟𝑠𝑜𝑛𝑠 × 1 𝑢𝑛𝑖𝑡 × 30 𝑑𝑎𝑦𝑠 = 7.5 ℎ𝑐𝑓

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53 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study The data on the number of dwelling units for all MFR customers provided by staff and used in the same equation. The household size for MFR customers is set at 2. The proposed indoor allocation for a hypothetical MFR customer with an apartment complex with 20 units is computed as follows:

Example for a MFR Indoor Water Budget (Proposed)
=
47 𝐺𝑃𝐶𝐷
748 𝑔𝑎𝑙𝑙𝑜𝑛𝑠/ℎ𝑐𝑓 × 2 𝑝𝑒𝑟𝑠𝑜𝑛𝑠 × 20 𝑢𝑛𝑖𝑡𝑠 × 30 𝑑𝑎𝑦𝑠 = 75.4 ℎ𝑐𝑓 Under the current and proposed rate structure, residential customers’ outdoor water (Tier 2) budgets are calculated in the formula below.

Outdoor Water Budget for Residential Customers
=
𝑳𝒂𝒏𝒅𝒔𝒄𝒂𝒑𝒆 𝑨𝒓𝒆𝒂 (𝑰𝒓𝒓𝒊𝒈𝒂𝒃𝒍𝒆)16 ×
𝑬𝑻𝑶17
𝟏𝟐 𝒊𝒏/𝒇𝒕
𝟏𝟎𝟎 𝒔𝒇/𝒉𝒄𝒇 × 𝑳𝑭 × 𝑫𝑭
Where:

SFR customers’ irrigable area is equal to the actual irrigable area of each residential customer’s parcel.

Landscape Factor (LF) is set to 80% to the amount of water needed for irrigation to encourage conservation. This is consistent with the State of California Code of Regulations Title 23, Section 491 and an expected parameter to be used for LF under Assembly Bill No. 1668 (AB 1668) and Senate Bill No. 606 (SB 606), approved in May, 2018.

Drought Factor (DF) is currently set at 1. The City may apply this additional parameter to the equation if the State mandates reduction of water usage due to drought.

Example for Outdoor Water Budget for a Residential Customer (Current and Proposed) with 2,135 sf. Irrigable Landscape Area when ETO @ 10 inch
=
2,135 ×
10 12 𝑖𝑛/𝑓𝑡
100 𝑠𝑓/ℎ𝑐𝑓 × 0.8 × 1.0 = 14.2 ℎ𝑐𝑓
Example for Outdoor Water Budget for an Residential Customer (Current and Proposed) with 10,000 sf. Parcel Size with ETO @ 10 inch
=
10,000 ×
10 12 𝑖𝑛/𝑓𝑡
100 𝑠𝑓/ℎ𝑐𝑓 × 0.8 × 1.0 = 66.7 ℎ𝑐𝑓
16 Landscape Area (or Irrigable Area in square feet) is the measured irrigable landscape area served by a customer’s meter 17 Evapotranspiration (ET0) is measured in inches of water during the billing period based on actual ET from CIMIS weather station # 044.

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54 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Commercial water budgets are based on a 3-year rolling average of historical use.

Use which is above a customer’s water budget is included in tier 3 and tier 4 for residential customers and tier 2 and tier 3 for all other customers. The allocation to each tier is based on a customer’s total water budget. The first tier above the proposed water budget contains as much water as 50 percent of the customer’s total water budget. The highest tier includes all water use which is greater than 150 percent of the total budget. The tier price for tier 1 for non-residential customers is equal to the tier 2 price of residential customers. Table 60 shows the tier allocations for each customer class as described.

Table 60. Tier Width Allocations by Customer Class
Customer
Class Tier Definition
Residential
Tier 1 Indoor Budget
Tier 2 Outdoor Budget
Tier 3 101-150% of Budget
Tier 4 Over 150% of Budget
Landscape
Tier 1 Total Budget
Tier 2 101-150% of Budget
Tier 3 Over 150% of Budget
Commercial, Industrial, Government
Tier 1 Total Budget
Tier 2 101-150% of Budget
Tier 3 Over 150% of Budget
Water Source Costs
All customers have a blend of all available water sources as shown in Table 61. For all customers, each inclining tier of water maximizes the cheapest available water supply source. The supply of available locally produced water is spent in the first two tiers, keeping the price lower for conservative water use.

Once locally produced water is no longer available, the upper two tiers are based on the supply cost of purchased water only.

Table 61. Water Source Unit Cost by Customer Class and Tier and Proposed Revenue Offset Tier Projected
Use
Local
Production
Purchased
Water Total Cost Unit Cost
Tier 1 3,990,752 3,990,752 $5,564,755 $1.39
Tier 2 5,756,614 570,459 5,186,155 $12,626,489 $2.19
Tier 3 1,133,262 1,133,262 $2,585,279 $2.28
Tier 4 655,449 655,449 $1,495,258 $2.28

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55 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Variable Cost Components
Base Costs
Base costs are divided by total water use to determine the unit cost shown in Table 62. The base unit cost is applied to all water use.

Peaking
Peaking costs, the sum of MDD and PHD costs allocated to each customer class and tier as shown in Table 51 are multiplied by the percentages in Table 46 to allocate the costs to each tier which are then divided by total water use in each category to determine the unit cost shown in Table 62. The corresponding peaking unit cost is applied to all water use based on tier and customer class.

Conservation
Conservation costs are divided by total water use in tier 3 and tier 4 to determine the unit cost shown in Table 62. All customers will pay all conservation costs in the upper two tiers. The corresponding conservation cost is applied to all water use based on tier and customer class.

Revenue Offset
Revenue offsets are divided by total water use in tier 1 and tier 2 to determine the unit cost shown in Table 62. All customers benefit from the non-operating revenue for usage within their water budgets.

Table 62. Variable Rate Costs and Components as Allocated to each Tier Tier Water
Use Base Unit $ per hcf Peaking Unit $ per hcf Conservation Unit $ per hcf Revenue
Offset
Unit $
per hcf
Tier 1 3,990,752 $1,522,605 $0.38 $827,602 $0.21 $0 $0.00 -$750,518 -$0.19 Tier 2 5,756,614 $2,196,340 $0.38 $3,721,362 $0.65 $0 $0.00 -$1,082,614 -$0.19 Tier 3 1,133,262 $432,377 $0.38 $824,332 $0.73 $709,873 $0.63 $0 $0.00 Tier 4 655,449 $250,076 $0.38 $682,233 $1.04 $709,873 $1.08 $0 $0.00 Variable Rate Components
Table 63 shows the calculation used to determine the variable rates for each tier. Supply costs are added to peaking, conservation, and base costs to calculate the variable rates. Rates are then reduced by revenue offsets, which were set aside in the cost of service analysis.

Table 63. Variable Rate Calculation
Tier Supply
Cost
Base
Cost
Peaking
Cost
Conservation
Cost
Revenue
Offset
Variable
Rate
Tier 1 $1.39 + $0.38 + $0.21 + $0.00 - $0.19 = $1.80
Tier 2 $2.19 + $0.38 + $0.65 + $0.00 - $0.19 = $3.03
Tier 3 $2.28 + $0.38 + $0.73 + $0.63 - $0.00 = $4.02
Tier 4 $2.28 + $0.38 + $1.04 + $1.08 - $0.00 = $4.79

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56 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study The rates will be escalated by the revenue adjustments and the five-year rate schedule is shown in Table 64. Each adjustment will occur in January, midway through the fiscal year.

Table 64. Proposed 5-Year Variable Rate Schedule
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Proposed Adjustment 9.0% 9.0% 9.0% 9.0% 9.0%
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Tier 1 $1.96 $2.13 $2.32 $2.53 $2.76
Tier 2 $3.31 $3.60 $3.93 $4.28 $4.67
Tier 3 $4.38 $4.77 $5.20 $5.67 $6.18
Tier 4 $5.22 $5.69 $6.20 $6.76 $7.36
Note: that fire hydrant and private fire rates reflect the peaking and source water cost of peak water use, residential tier 4

3.4 Bill Impact Analysis
This analysis compares customers’ bills under current and proposed rates. Figure 10 shows the dollar change in the bill based on ¾” meter single family residential customers, use at selected usage points.

The City’s average ¾” residential customer uses 13 hcf of water monthly. Additionally, the 90th percentile of use for a ¾” residential customer is under 31 hcf per billing period.

Figure 10. Single Family Customer Impact by Usage for ¾” Meter $49.97
$64.81
$86.97
$129.06
$56.64
$75.41
$101.86
$142.04
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
7 hcf (25 percentile) 13 hcf (average) 21 hcf (75 percentile) 31 hcf (90 percentile) Current Proposed

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57 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

RECLAIMED WATER UTILITY

4.1 Financial Plan
RDN built a 10-year financial model for the reclaimed water utility to meet the City’s long-term financial goals.

Demand Projections
Using historical billing records, RDN first derived aggregate usage levels to project water demand. Next, we calculated per account reclaimed water usage for each customer by dividing the aggregate usage by the number of accounts. RDN assumed constant per account usage over the study period. This assumption was introduced to ensure that forecasted deviation in the wake of the Covid-19 pandemic is conservative. Finally, the forecast number of accounts and per-account usage were multiplied to estimate aggregate use by customer class. Figure 11 shows the City’s total reclaimed water demand projected for the next ten years.

Figure 11. Annual Aggregate Reclaimed Water Use in hcf, FY 2024 to FY 2034

1.59 1.59 1.60 1.60 1.61 1.61 1.62 1.62 1.63 1.63 1.64

0.00 0.20

0.40 0.60

0.80 1.00

1.20 1.40

1.60 1.80
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 Millions Residential Commercial Govermental Industrial

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58 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 65 shows the annual reclaimed water use projection by customer class for the rate setting period.

Table 65. Annual Reclaimed Water Use by Customer Class in hcf, FY 2024 to FY 202918 Customer Class FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Residential 30,632 30,632 30,632 30,632 30,632 30,632
Commercial 451,598 451,598 451,598 451,598 451,598 451,598 Govermental 1,106,842 1,111,532 1,116,222 1,120,912 1,125,602 1,130,292 Industrial 149 149 149 149 149 149
Total 1,589,221 1,593,911 1,598,601 1,603,291 1,607,981 1,612,671 Revenues
Based on the account growth and water demand projections, RDN forecasted revenues generated from customer rates using the current water rates for the study period, which total approximately $4.4 million annually. Other operating income and non-operating revenue are estimated to provide supplemental revenue each year. Table 66 shows the projected non-operating revenue for the reclaimed water utility by source for FY 2024 to FY 2029.

Table 66. Annual Non-Operating Revenue by Source, FY 2024 to FY 2029 Non-Operating Revenue FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Interest On Investments $30,118 $30,720 $31,335 $31,961 $32,601 $33,253 Utility Locating & Marking $498 $498 $498 $498 $498 $498 Services To Other Funds $400 $400 $400 $400 $400 $400
Total $31,016 $31,618 $32,233 $32,859 $33,499 $34,151
The system’s total revenue for the study period is estimated to be approximately $5.3 to $5.4 million annually under the current rates. Table 67 shows the projected revenue flow for the study period (FY 2024 – FY 2029) without any revenue adjustments, projections are based on water use and customer growth projections as well as other operating and non-operating revenue estimates provided by City staff.

Table 67. Reclaimed Water Utility Operating Revenue Forecast, FY 2024 to FY 2029 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Revenue from Rates
Fixed Charges $680,000 $609,927 $610,909 $611,891 $612,873 $613,855 Variable Charges $3,722,000 $3,754,778 $3,765,587 $3,776,396 $3,787,204 $3,798,013 Rate Revenue Total $4,402,000 $4,364,705 $4,376,496 $4,388,286 $4,400,077 $4,411,868 Other Operating Revenues $904,672 $904,672 $904,672 $904,672 $904,672 $904,672 Non-operating Revenues $31,016 $31,618 $32,233 $32,859 $33,499 $34,151 Total $5,337,688 $5,300,995 $5,313,400 $5,325,818 $5,338,248 $5,350,691 18 Use projections derived from historical monthly customer billing records and trends in reclaimed water use

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59 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Operating and Maintenance (O&M) Expense
The reclaimed water utility’s operating budget includes $2.1 million in operating expenses for FY 2024.

By the end of the five-year rate setting period, total operating expenses are expected to reach $2.5 million.

Annual overall inflation for operating expenses for the ten-year financial planning period is expected to average around 3.6 percent per year. Table 68 shows projected operating expenses for the rate setting period by budget category.

Table 68. Operating Expenses by Expense Category, FY 2024 to FY 202919 Expense Category FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Capital Improvements $48,561 $52,658 $56,046 $59,660 $61,904 $64,232 General Service $214,130 $222,113 $230,417 $237,617 $244,457 $251,498 Regulatory Compliance $395,134 $408,979 $423,313 $435,109 $447,117 $459,457 Operations $862,585 $893,432 $925,437 $957,763 $989,923 $1,023,168 Infrastructure Maintenance $149,246 $156,491 $164,123 $171,622 $178,758 $184,850 Facilities Maintenance $364,218 $379,878 $395,260 $409,133 $422,633 $435,445 Conservation $4,757 $5,076 $5,419 $5,787 $6,009 $6,239
Customer Care $23,510 $29,659 $31,258 $32,875 $34,007 $35,174 Total Operating $2,062,141 $2,148,286 $2,231,273 $2,309,565 $2,384,807 $2,460,063 Other Obligations
Other obligations included in the financial plan are capital improvement projects funded by PAYGO (Pay As You Go), debt service obligations, and reserve contributions made from rates.

Capital Improvement Projects
The City plans to spend an average of $3.2 million a year on reclaimed water rate related capital expenditures during the rate setting period. An additional $1.6 million on average per year in reclaimed water capital expenditures will be funded by grants. The large initial expenditures on capital are projects that have already begun and in the outer years, total capital spending will be reduced to more normal levels. Table 69 shows the rate related capital expenditure by expenditure type. The City will use a variety of funding sources including grants and customer rates to accomplish the proposed capital plan. Figure 12 shows the rate study capital plan by funding source, only PAYGO funded expenditure will impact customer rates.
19 City staff provided current year operating expenses by category, projections are based on individual line-item inflationary factors shown in Table 14

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60 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 69. Rate Study CIP Expenses by Expense Type, FY 2024 to FY 202920 CIP Funding Source FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Rate Funded $3,034,464 $6,576,445 $8,543,919 $303,925 $368,273 $225,068 Grant Funded $5,904,739 $3,495,461 $0 $0 $0 $0
Total CIP $8,939,203 $10,071,906 $8,543,919 $303,925 $368,273 $225,068 Figure 12. Rate Study CIP Expenses by Funding Source, FY 2024 to FY 2029 $0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Millions
Rate Funded Grant Funded
Debt Service and Coverage Ratios
The City’s debt service schedule totals between $0.5 million and $2.4 million a year during the study period. Table 70 shows the annual debt service payments which are allocated to the reclaimed water fund.

Table 70. Reclaimed Water Fund Debt Service Payments, FY 2024 to FY 202921 Description FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Principal $2,125,225 $2,187,532 $2,250,562 $367,325 $386,187 $400,054 Interest $297,836 $239,652 $180,697 $119,776 $103,985 $88,762 Total reclaimed debt service $2,423,061 $2,427,184 $2,431,259 $487,100 $490,172 $488,816 Table 71 shows the DSCR under the current finances detailed in the previous tables. To derive the DSCR, net revenue is divided by the total debt service in each year. 20 The City’s 10-year CIP budget was used for project cost, project type, and funding source as well as input from staff 21 City staff provided details of all current and planned debt service obligations

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61 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 71. Reclaimed Water Debt Service Coverage Ratio Calculation, FY 2024 to FY 2029 Description FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Total Revenue $5,337,688 $5,300,995 $5,313,400 $5,325,818 $5,338,248 $5,350,691 Total Operating Expense $2,062,141 $2,148,286 $2,231,273 $2,309,565 $2,384,807 $2,460,063 Net Revenue $3,275,547 $3,152,710 $3,082,128 $3,016,253 $2,953,441 $2,890,628 Total Reclaimed Debt Service $2,423,061 $2,427,184 $2,431,259 $487,100 $490,172 $488,816 Reclaimed DSCR 1.35 1.30 1.27 6.19 6.03 5.91
DSCR Requirement 1.25 1.25 1.25 1.25 1.25 1.25
Figure 13 shows the projected debt service coverage ratios based on the current financial plan.

Figure 13. Debt Service Coverage Ratio Under Current Rates, FY 2024 to FY 2029

0.00 1.00

2.00 3.00

4.00 5.00

6.00 7.00
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
DSCR Current DSCR Requirement
Reserves
The City must maintain an appropriate reserve balance to ensure the day-to-day operation will continue during emergencies and guarantee the future stability of the system. The City’s financial goal is to build an appropriate level of cash reserves for each reserve fund included in the financial plan of this Study.

Reserve target for the reclaimed water utility is described below:
• Operating Reserve: three months of operating expenses plus annual depreciation The reserve target at the end of the study period reaches $1.8 million. Table 72 shows the City’s reserve targets for FY 2024 through FY 2029 based on the current reserve policy. Figure 14 graphically displays the resulting cash balances versus the reserve target under the current rates. Reserve targets are based

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62 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study on the reserve policy shown in Table 19 and operating, capital, and debt service totals shown in Tables 68, 69, and 70, respectively.

Table 72. Reclaimed Water Reserve Target, FY 2024 to FY 2029 Reserve Fund FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 Operating Reserve $1,726,909 $1,748,445 $1,769,191 $1,788,765 $1,807,575 $1,826,389 Figure 14. Reclaimed Water Cash Balances and Reserve Target with Current Rates, FY 2024 to FY 2029
-$14.0
-$12.0
-$10.0
-$8.0
-$6.0
-$4.0
-$2.0
$0.0
$2.0
$4.0
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Millions
Ending Balance Reserve Target

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63 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Financial Plan
Based on the projected total revenue and necessary costs to be recovered during the study period, RDN built a financial plan that will generate sufficient revenues for the day-to-day operation and annual PAYGO and make appropriate contributions to reserves. The City currently has a projected ending cash balance of $0.5 million in FY 2024. Table 73 shows the status quo reclaimed water pro forma with no revenue adjustments and the resulting ending balances based on the revenues and expenses outlined in this section.

Table 73. Status Quo Financial Pro Forma for City of Corona Reclaimed Water System, FY 2024 to FY 2029
Rate Increase 0.0% 0.0% 0.0% 0.0% 0.0%
Rate Month Implemented
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Cash Position Opening Balance $ 2,697,830 $ 515,852 $ (5,335,067) $ (13,228,117) $ (11,002,890) $ (8,907,894) Revenues
Reclaimed Water Rate Revenue $ 4,402,000 $ 4,364,705 $ 4,376,496 $ 4,388,286 $ 4,400,077 $ 4,411,868 Adjusted Reclaimed Water Rate Revenue $ - $ - $ - $ - $ - $ - Other Operating Revenue $ 904,672 $ 904,672 $ 904,672 $ 904,672 $ 904,672 $ 904,672 Non-Operating Revenue $ 31,016 $ 31,618 $ 32,233 $ 32,859 $ 33,499 $ 34,151 Total Revenues $ 5,337,688 $ 5,300,995 $ 5,313,400 $ 5,325,818 $ 5,338,248 $ 5,350,691 Operating Expenses $ 2,062,141 $ 2,148,286 $ 2,231,273 $ 2,309,565 $ 2,384,807 $ 2,460,063 Net Operating Revenues $ 3,275,547 $ 3,152,710 $ 3,082,128 $ 3,016,253 $ 2,953,441 $ 2,890,628 Current Rate Funded Debt Service $ 2,423,061 $ 2,427,184 $ 2,431,259 $ 487,100 $ 490,172 $ 488,816 New Debt Service $ - $ - $ - $ - $ - $ -
Total Rate Funded Debt Service $ 2,423,061 $ 2,427,184 $ 2,431,259 $ 487,100 $ 490,172 $ 488,816 Total Operating and Debt Service $ 4,485,202 $ 4,575,469 $ 4,662,532 $ 2,796,666 $ 2,874,979 $ 2,948,879 Total Operating and Debt Net Revenues $ 852,486 $ 725,526 $ 650,869 $ 2,529,152 $ 2,463,269 $ 2,401,812 Capital Expenditure $ 8,939,203 $ 10,071,906 $ 8,543,919 $ 303,925 $ 368,273 $ 225,068 Debt Proceeds Proposed $ - $ - $ - $ - $ - $ -
Debt Proceeds New $ - $ - $ - $ - $ - $ -
Capacity Fee $ - $ - $ - $ - $ - $ -
Grants $ 5,904,739 $ 3,495,461 $ - $ - $ - $ -
Cash $ 3,034,464 $ 6,576,445 $ 8,543,919 $ 303,925 $ 368,273 $ 225,068 Alternate Fee $ - $ - $ - $ - $ - $ -
Net Income $ (2,181,978) $ (5,850,919) $ (7,893,050) $ 2,225,227 $ 2,094,996 $ 2,176,744 Ending Balance $ 515,852 $ (5,335,067) ($13,228,117) ($11,002,890) ($8,907,894) ($6,731,150)

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64 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 74 shows the proposed reclaimed water pro forma for the study period with the recommended revenue adjustments per year. In order for the City to accomplish the stated financial goals, the City must increase revenues by 4.0 percent per year for the next five years. Additionally, the reclaimed water utility will issue two interfund loans, $8.0 million in FY 2025 and $6.0 million in FY 2026. These loans will be paid back over time but will not impact the debt service coverage calculations, as they are not from an outside lender. All revenue adjustments will occur in January of the Fiscal Year.

Table 74. Proposed Financial Pro Forma for City of Corona Reclaimed Water System, FY 2024 to FY 2029
Rate Increase 4.0% 4.0% 4.0% 4.0% 4.0%
Rate Month Implemented 1-Jan 1-Jan 1-Jan 1-Jan 1-Jan
FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Cash Position Opening Balance $ 2,697,830 $ 515,852 $ 2,752,227 $ 89,231 $ 803,102 $ 1,582,132 Revenues
Reclaimed Water Rate Revenue $ 4,402,000 $ 4,364,705 $ 4,376,496 $ 4,388,286 $ 4,400,077 $ 4,411,868 Adjusted Reclaimed Water Rate Revenue $ - $ 87,294 $ 266,091 $ 453,012 $ 648,401 $ 852,619 Other Operating Revenue $ 904,672 $ 904,672 $ 904,672 $ 904,672 $ 904,672 $ 904,672 Non-Operating Revenue $ 31,016 $ 31,618 $ 32,233 $ 32,859 $ 33,499 $ 34,151 Total Revenues $ 5,337,688 $ 5,388,289 $ 5,579,491 $ 5,778,830 $ 5,986,649 $ 6,203,310 Operating Expenses $ 2,062,141 $ 2,148,286 $ 2,231,273 $ 2,309,565 $ 2,384,807 $ 2,460,063 Net Operating Revenues $ 3,275,547 $ 3,240,004 $ 3,348,219 $ 3,469,264 $ 3,601,842 $ 3,743,247 Current Rate Funded Debt Service $ 2,423,061 $ 2,427,184 $ 2,431,259 $ 487,100 $ 490,172 $ 488,816 New Debt Service $ - $ - $ 1,036,037 $ 1,964,367 $ 1,964,367 $ 1,964,367 Total Debt Service $ 2,423,061 $ 2,427,184 $ 3,467,295 $ 2,451,468 $ 2,454,539 $ 2,453,184 Total Operating and Debt Service $ 4,485,202 $ 4,575,469 $ 5,698,568 $ 4,761,033 $ 4,839,346 $ 4,913,246 Net Revenues $ 852,486 $ 812,820 $ (119,077) $ 1,017,796 $ 1,147,303 $ 1,290,063 Capital Expenditure $ 8,939,203 $ 10,071,906 $ 8,543,919 $ 303,925 $ 368,273 $ 225,068 Debt Proceeds Proposed $ - $ - $ - $ - $ - $ -
Debt Proceeds New $ - $ 8,000,000 $ 6,000,000 $ - $ - $ - Capacity Fee $ - $ - $ - $ - $ - $ -
Grants $ 5,904,739 $ 3,495,461 $ - $ - $ - $ -
Cash $ 3,034,464 $ (1,423,555) $ 2,543,919 $ 303,925 $ 368,273 $ 225,068 Alternate Fee $ - $ - $ - $ - $ - $ -
Net Income $ (2,181,978) $ 2,236,375 $ (2,662,996) $ 713,871 $ 779,030 $ 1,064,995 Ending Balance $ 515,852 $2,752,227 $ 89,231 $803,102 $1,582,132 $2,647,128

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65 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Revenue Requirements
Table 75 displays the reclaimed water utility’s revenue requirements for FY 2024. The total expense for each year is offset by other operating revenues and non-operating revenues to compute a pure portion of revenue requirements that need to be recovered from customers’ rates. RDN proposes annual revenue adjustments of 4.0 percent FY 2025 through FY 2029 to reach the financial goals set by the City.

Table 75. Revenue Requirements for City of Corona Reclaimed Water Utility, FY 2024 Revenue Requirements FY 2024
O&M Expenses $2,062,141
Debt Service $2,423,061
Capital Expenditures $3,034,464
Other Operating Revenue ($904,672)
Non-Operating Revenue ($31,016)
Net Balance From Operations ($2,181,978)
Rate Revenue Requirement $4,402,000

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66 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

4.2 Cost of Service Analysis
The purpose of a Cost of Service (COS) analysis is to allocate costs among customers commensurate with their service requirements. RDN employed the “base-extra capacity” cost-of-service method promulgated in AWWA’s M1, whereby costs are first allocated to individual functions, which are typical industry standard activities, then the costs of each function are distributed to appropriate cost causative components, which are defined by the cost driving elements. The results of the COS form a reasonable, equitable basis for designing rates. Figure 15 displays a typical process for the COS analysis.

Figure 15. A Typical Flow for Cost of Service Analysis Process Functionalization of Costs
Operating and capital costs are functionalized based on operating categories used in the City’s budget and input from City staff with expertise on the system and utility industry knowledge. The functionalization of capital expenses is based on total reclaimed water asset values, which represents a better overall estimate of systemwide needs versus just one year of capital expenditure. The functions of the reclaimed water system for both operating and capital expenses include:
• Pumping – costs associated with general pumping and energy use • Storage – costs associated with water storage for distribution • Treatment – costs associated with treating water
• Transmission and Distribution – costs associated with transmitting and distributing reclaimed water to customers
• Customer – costs associated with customer service and billing related tasks • Meters – costs associated with the reading and maintenance of meters • Conservation – costs associated with the City’s conservation programs Functionalization
The revenue requirement is
assigned to various industry
standard activities on a line-by -
line basis.

Allocation to Cost Causative
Components
The functional categories are
allocated to base, Max Day
Demand, Peak Hourly Demand,
customer billing and meter costs.

Reallocation to Customers via
Rates
Each cost component is tied to
fixed and volumetric rate
components.

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67 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study • Administrative and General – costs associated with administrative and general functions Costs were functionalized based on industry standard budget determinations and input from staff. Table 76 shows the amount and percentage of test year operating expenses allocated to each function. City assets are categorized based on function as described in the City’s audited financial statements. Table 77 shows the amount and percentage of the City’s fixed assets allocated to each function. Total assets were used as a proxy for the allocation of non-operating expenses because they represent the long-term investment in the system made by the City. A single year of non-operating expenses typically does not reflect an adequate ratio of overall system values.

Table 76. Percentage of Operating Costs Allocated to Standard Functions22 Category Allocation Percent
Total O&M $2,062,141 100.0%
Transmission and Distribution $149,246 7.2%
Pumping $712,551 34.6%
Customer $23,510 1.1%
Conservation $4,757 0.2%
Administrative and General $1,172,077 56.8%
O&M Expense
Table 77. Percentage of Non-operating Costs Allocated to Standard Functions Category Allocation Percent
Total Assets $73,913,263 100.0%
Storage $20,032,521 27.1%
Transmission and Distribution $45,706,630 61.8%
Pumping $7,676,852 10.4%
Meters $47,498 0.1%
Administrative and General $449,761 0.6%
Non-Operating Expense
A COS analysis considers both the average quantity of water consumed (base costs) and the peak rate at which it is consumed (peaking or capacity costs as identified by maximum day and maximum hour demands). Peaking costs are costs that are incurred during peak times of consumption. There are additional costs associated with designing, constructing, operating, and maintaining facilities to meet peak demands. All current and future reclaimed water facilities, including water mains, and pump stations are designed and constructed to meet peak demands. If deficiencies are found, the existing facilities get upsized, or a secondary line or pump is installed to meet the peaking demands. Peak demand costs should be allocated to those customers whose water usage patterns generate additional costs for the utility. In other words, not all customer classes and not all customers share the same responsibility for 22 Cost allocations were provided for all expenses by City staff based on the standard cost categories

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68 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study peaking related costs. For the system to provide adequate service to its customers at all times, it must be capable of meeting not only the annual volume requirements, but also the peak demand - the maximum rate at which water is consumed. Therefore, the capacities of the various facilities must meet the maximum coincidental demand of all customers.

Each reclaimed water service facility within the system has an underlying average demand, exerted by the customers for whom the base cost component applies. For those facilities designed solely to meet average daily demand, 100% of the cost should go to the base cost component. Extra capacity requirements associated with demand in excess of average use consist of Max Day Demand and Peak Hourly Demand. Base demand and MDD demand were calculated based on historical customer usage for the most recent year that data was fully available, FY 2023. Base demand was calculated as the total demand divided by the number of days in a year. Max Day Demand was calculated by taking the highest use month, September, and dividing that by the number of days in the month, 30. Based on the MDD factor, RDN estimated the average hourly flow during the max day by multiplying it by a peaking factor of

1.5 (the lowest factor recommended by the State Board’s Division of Drinking Water23) to compute a PHD factor. Functions that require capacity to perform at base and MDD levels were allocated based on the ratio of base demand compared to MDD, or 65.8 percent and 34.2 percent, respectively. Additionally, the costs associated with the functions which require extra capacity service requirements were distributed to the base, MDD, and PHD cost components at 54.8 percent, 28.5 percent, and 16.7 percent, respectively.

Table 78 shows the systemwide peaking factors based on customer use patterns as described.

Table 78. System-Wide Peaking Factors
Factor Base Max Day Max Hour
Use 4,379 6,658 9,987
Base 1.00 100.0% 0.0% 0.0%
Max Day 1.52 65.8% 34.2% 0.0%
Max Hour 2.28 43.8% 22.8% 33.3%
Average Max Day/Max Hour 54.8% 28.5% 16.7%
The cost causative components include:
• Base – delivering water to customers under average demand conditions • Maximum Day Demand (MDD) – the costs of delivering water to customers on the day with the highest demand
• Peaking Hourly Demand (PHD) – the costs of delivering water to customers on the hour with the highest demand on highest day
• Meters – the costs of servicing and reading meters
23 California Public Utilities Commission. Standard Practice for Determination of Water Supply Requirements, Standard Practice U-22. San Francisco. 2000

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69 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study • Customer Service – billing and other customer service-related costs • Conservation – the cost to administer the City’s conservation program Pumping costs are proportionally allocated between Base, Max Day, and Peak Hour based on the average max day/peak hour allocation or in the case of assets are applied directly to supply costs as the total water supply for reclaimed water is brought into the system from outside treatment.

Transmission and distribution costs are proportionally allocated between Base, Max Day, and Peak Hour based on the Average Max Day/Peak Hour costs. These costs are allocated based on the average maximum day and maximum hour because transmission infrastructure is constructed to meet maximum day demand and distribution pipelines are constructed to meet maximum hour demand.

Administrative and general costs are allocated to cost components based on the percentage of the functions allocated to the other cost categories.

The result of the COS analysis determines how the total revenue requirements should be allocated to each of the cost components, which are categorized and grouped based on the similar cost driving elements. Table 79 through Table 82 show the percent and total value of functionalized operating costs and assets allocated to the cost causative components. Asset values provide a more stable estimate of overall capital needs and thus, the allocation used is based on asset values. The percentage of system assets under each cost component is then applied to the non-operating revenue requirements for the test year.

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70 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 79. Percent of Operating Function Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Customer Service Conservation Transmission and Distribution $149,246 0.0% 54.8% 28.5% 16.7% 0.0% 0.0% 0.0% Pumping $712,551 0.0% 54.8% 28.5% 16.7% 0.0% 0.0% 0.0%
Customer $23,510 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% 0.0%
Conservation $4,757 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 100.0% Administrative and General $1,172,077 0.0% 52.7% 27.4% 16.0% 0.0% 3.2% 0.6% O&M Expense
Table 80. Total of Operating Functional Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Customer Service Conservation Transmission and Distribution $149,246 $0 $81,800 $42,572 $24,874 $0 $0 $0 Pumping $712,551 $0 $390,540 $203,253 $118,759 $0 $0 $0 Customer $23,510 $0 $0 $0 $0 $0 $23,510 $0
Conservation $4,757 $0 $0 $0 $0 $0 $0 $4,757
Administrative and General $1,172,077 $0 $617,889 $321,574 $187,892 $0 $37,196 $7,526 Percent of Total 100.0% 0.0% 52.9% 27.5% 16.1% 0.0% 2.9% 0.6% O&M Expense
Table 81. Percent of Non-Operating Function Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Customer
Service Conservation
Storage $20,032,521 0.0% 65.8% 34.2% 0.0% 0.0% 0.0% 0.0% Transmission and Distribution $45,706,630 0.0% 54.8% 28.5% 16.7% 0.0% 0.0% 0.0% Pumping $7,676,852 100.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Meters $47,498 0.0% 0.0% 0.0% 0.0% 100.0% 0.0% 0.0%
Administrative and General $449,761 0.0% 65.6% 34.1% 0.0% 0.2% 0.0% 0.0% Non-Operating Expense

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71 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 82. Total of Non-Operating Functional Categories Allocated to Cost Components Category Total
Allocation
Source of
Supply Base MDD PHD Meters Customer Service Conservation Storage $20,032,521 $0 $13,175,478 $6,857,043 $0 $0 $0 $0 Transmission and Distribution $45,706,630 $0 $25,051,212 $13,037,647 $7,617,772 $0 $0 $0 Pumping $7,676,852 $7,676,852 $0 $0 $0 $0 $0 $0
Meters $47,498 $0 $0 $0 $0 $47,498 $0 $0
Administrative and General $449,761 $0 $295,110 $153,587 $0 $1,064 $0 $0 Percent of Total 100.0% 10.4% 52.1% 27.1% 10.3% 0.1% 0.0% 0.0% Non-Operating Expense
The non-operating expenses for the test year are made up of debt service payments and capital expenditures totaling approximately $5.5 million. Those costs are distributed to the cost components based on the final percentages shown in Table 82, above, which are based on the total asset values of reclaimed water assets owned by the City. Reclaimed water asset values represent the long-term investment in the City’s reclaimed water system and are proxy value for how a single year of non-operating expenses should be allocated. Asset values do not significantly fluctuate year over year as annual capital expenditures do, which ensures that cost categories are accurately represented. Operating allocations are based on the actual projected test year expenses and the total for each cost component reflect the percentages in Table 80. Table 83 shows the projected test year expenses allocated to each cost component based on the percentages in Table 80 and Table 82.

Table 83. Operating and Non-Operating Cost Allocation to Cost Components Cost Component Operating
Percentage
Operating
Costs
Non-Operating
Percentage
Non-Operating
Costs
Total 100.0% $2,062,141 100.0% $5,457,525
Source of Supply 0.0% $0 10.4% $566,835
Base 52.9% $1,090,228 52.1% $2,844,330
MDD 27.5% $567,398 27.1% $1,480,302
PHD 16.1% $331,525 10.3% $562,472
Meters 0.0% $0 0.1% $3,586
Customer Service 2.9% $60,706 0.0% $0
Conservation 0.6% $12,283 0.0% $0

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72 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 84 shows the cost allocation by cost causative components under the proposed financial plan before adjustments. Revenue offsets made up of non-operating revenues for FY 2024 shown in Table 66 will be used to offset reclaimed water costs in the rate design section.

Other operating revenues are allocated to each cost component based on the overall cost allocation percentages shown in the “percent of total” row in Table 85.

Table 84. Rate Revenue Requirements for Test Year, FY 2024 Cost Allocation Summary Total Source of
Supply Base MDD PHD Meters Customer Service Conservation O&M Revenue Requirements $2,062,141 $0 $1,090,228 $567,398 $331,525 $0 $60,706 $12,283 Non-Operating Revenue Requirements $5,457,525 $566,835 $2,844,330 $1,480,302 $562,472 $3,586 $0 $0 Total $7,519,666 $566,835 $3,934,558 $2,047,700 $893,998 $3,586 $60,706 $12,283 Because they are a function of system capacity, base costs are reallocated to the meter component at a rate of 30.0 percent which will help stabilize revenues by increasing the fixed revenue collection. Utilities invest in, and continuously maintain, facilities to provide capacity to meet all levels of water consumption, including average and peak demand. These costs must be recovered regardless of the amount of water used during a given period. Thus, base delivery costs and fixed reclaimed water system costs to meet average demand are generally considered as fixed reclaimed water system costs. To balance affordability and revenue stability, it is a common practice that a portion of the base costs and/or peaking costs are recovered in the monthly service charge, along with customer-related costs and meterrelated costs. Table 85 shows the total cost allocation by cost category that will be used to allocate costs to each customer class. Other operating revenues are allocated to cost components based on the overall allocation percentages shown in the percent of total line.

Additionally, non-operating revenues, interest on investments, are applied directly to offset variable rates.

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73 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 85. Final Cost of Service Allocations with all Adjustments Cost Allocation Summary Total Source of
Supply Base MDD PHD Meters Customer Service Conservation Revenue Offset O&M Revenue Requirements $2,062,141 $0 $1,090,228 $567,398 $331,525 $0 $60,706 $12,283 $0 Non-Operating Revenue Requirements $5,457,525 $566,835 $2,844,330 $1,480,302 $562,472 $3,586 $0 $0 $0 Total $7,519,666 $566,835 $3,934,558 $2,047,700 $893,998 $3,586 $60,706 $12,283 $0 Percent of Total 7.5% 52.3% 27.2% 11.9% 0.0% 0.8% 0.2% 0.0% Other Operating Revenue ($904,672) ($68,194) ($473,357) ($246,354) ($107,555) ($431) ($7,303) ($1,478) $0 Non-Operating Revenue ($31,016) $0 $0 $0 $0 $0 $0 $0 ($31,016) Net Balance From Operations ($2,181,978) ($164,478) ($1,141,689) ($594,180) ($259,411) ($1,040) ($17,615) ($3,564) $0 Rate Revenue Requirement $4,402,000 $334,162 $2,319,512 $1,207,166 $527,032 $2,114 $35,788 $7,241 ($31,016) Adjustments
Re-Allocation of Base $0 ($695,854) $0 $0 $695,854 $0 $0 $0 Final Cost Allocation $4,402,000 $334,162 $1,623,659 $1,207,166 $527,032 $697,968 $35,788 $7,241 ($31,016)

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74 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Allocation to Units
The final step of the COS analysis is to allocate the cost causative components back to the customers.

In order to perform this, unit values were determined for each cost component. Equivalent meters are determined by multiplying the total meters by their equivalent meter value. Table 86 shows the meters currently connected to the reclaimed water system and the number of equivalent meters based on AWWA meter equivalency factors.

Table 86. Total Equivalent Meters Used for Cost Allocation Meter Size Number of
Meters
Equivalance
Factor
Total
Equivalent
Meters
5/8" - 1.00 -
3/4" 16 1.50 24
1" 81 2.50 203
1 1/2" 169 5.00 845
2" 87 8.00 696
3" 12 17.50 210
4" 14 31.50 441
6" 6 80.00 480
8" 1 140.00 140
10" 1 210.00 210
Total 387 3,249
All use categories (Water Use, Max Month, Average Day, Max Day, and Peak Hourly) were calculated based on actual (billed) customer use and are expressed in hcf. As previously described, average day demand constitutes the entire year of use divided by the number of days in a year. Max day demand takes the use during the highest use month (September) and divides that by the number of days in the month (30). Peak hourly demand is estimated by taking the difference between average day and max day demand and multiplying the result by a factor of 1.5. This results in the total capacity, with extra capacity calculated by subtracting the average daily use from the total capacity for either max day or max hour. Table 87 shows the reclaimed water use values used to calculate units for the cost of service allocation. Table 88 shows the percent of total peak costs allocated to each tier based on the total capacity difference and extra capacity within that tier based on actual use patterns.

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75 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 87. Total Use and Peak Values used for Cost Allocation Customer Class Annual Use
(hcf)
Daily
Reclaimed
Use
Capacity
Factor
Total
Capacity Extra Capacity Capacity
Factor
Total
Capacity Extra Capacity
Residential 30,632 84 1.72 145 61 2.59 218 73
Commercial 451,598 1,241 1.69 2,101 861 2.54 3,152 1,051 Governmental 1,111,532 3,054 1.44 4,411 1,357 2.17 6,616 2,205 Industrial 149 0.4 1.84 0.8 0.3 2.76 1.1 0.4
Total 1,593,911 4,379 6,658 2,279 9,987 3,329
Max Day Peak Hour
Table 88. Total Use and Peak Values used for Cost Allocation to Tiers by Percent Tier Annual
Use (hcf)
Daily
Reclaimed
Use
Capacity
Factor
Total
Capacity
Extra
Capacity
Capacity
Factor
Total
Capacity
Extra
Capacity
Percent
of Peak
Costs
Tier 1 1,425,082 3,915 1.50 5,890 1,975 2.26 8,836 2,945 88.0% Tier 2 168,830 464 1.60 742 279 2.40 1,114 371 12.0%
Total 1,593,911 4,379 6,633 2,254 9,949 3,316 100%
Max Day Peak Hour
The number of bills in one year (the number of accounts multiplied by 12) serves as the basis for distributing billing and customer service costs associated with meter reading, customer billing and collection, and other customer services costs. The number of equivalent meters is used to distribute meter related service costs. Table 89 shows the total cost of service units used to derive the unit costs under each category.

Table 89. Cost of Service Units
Unit Count of
Units
Customers 387
EMs 3,249
Reclaimed Water Use 1,593,911
Max Month 204,146
Average Day (hcf/day) 4,379
Max Day (hcf/day) 6,658
Max Day Extra 2,279
Peak Hourly (hcf/day) 9,987
Peak Hour Extra 3,329
Table 90 shows the total cost allocation by cost component divided by the corresponding unit values to develop a unit cost for each. Max Day Demand and Peak Hourly Demand costs are divided by the extra demand at each level to account for the additional use in that category and applied to each class and tier.

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76 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 90. Rate Revenue Requirements Divided by the Corresponding Units Total Source of
Supply Base MDD PHD Meters Customer Service Conservation Revenue Offset Rate Revenue Requirement $4,402,000 $334,162 $1,623,659 $1,207,166 $527,032 $697,968 $35,788 $7,241 ($31,016) Units 1,593,911 1,593,911 2,279 3,329 3,249 4,642 1,593,911 1,593,911 Unit Cost $0.21 $1.02 $529.70 $158.32 $214.86 $7.71 $0.005 ($0.02) Allocation to Customer Classes
The City currently maintains four distinct reclaimed water customer classes, though all customers are billed in the same manner, with individual water budgets. The total units of service by customer class are shown in Table 91. Table 92 shows the cost of service allocated to each customer class based on the units of service. The total rate revenue requirements which need to be recovered from customer rates is also shown, this amount is the cost of service allocation reduced by the non-operating revenues which are applied directly to the variable rates.

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77 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 91. Unit of Service by Customer Class
$0.21 $1.02 $529.70 $158.32 $214.86 $7.71 $0.005 ($0.02) Customer Class Source of
Supply Base MDD PHD Meters Customer
Service Conservation Revenue Offset
Residential 30,632 30,632 61 73 174 120 30,632 30,632
Commercial 451,598 451,598 861 1,051 911 1,596 451,598 451,598 Governmental 1,111,532 1,111,532 1,357 2,205 2,156 2,914 1,111,532 1,111,532 Industrial 149 149 0 0 8 12 149 149
Total 1,593,911 1,593,911 2,279 3,329 3,249 4,642 1,593,911 1,593,911 Table 92. Cost of Service by Customer Class
Customer Class Total Source of
Supply Base MDD PHD Meters Customer Service Conservation Revenue Offset
Residential $119,223 $6,422 $31,204 $32,261 $11,483 $37,385 $925 $139 -$596 Commercial $1,378,283 $94,677 $460,026 $455,929 $166,345 $195,736 $12,305 $2,052 -$8,788 Governmental $2,902,259 $233,032 $1,132,277 $718,793 $349,145 $463,127 $22,464 $5,050 -$21,629 Industrial $2,235 $31 $152 $183 $60 $1,719 $93 $1 -$3
Total $4,402,000 $334,162 $1,623,659 $1,207,166 $527,032 $697,968 $35,788 $7,241 -$31,016

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78 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study

4.3 Reclaimed Water Rate Design
RDN proposes the following adjustments to customer reclaimed water rate structures:
• Adjusting rates annually by the recommended revenue adjustments of 4.0 percent per year • Increasing the fixed proportion of rate collection
• Reducing the number of tiers from four to two
The reclaimed water rates have two components: 1) a fixed monthly service charge and 2) volumetric rates. Customers must pay the fixed charge regardless of the water use. In addition, the customers pay volumetric rates based on the volume of water use.

3. Fixed monthly service charge: the rates are established based on the size of the meter at the property receiving water service and are calculated to recover a portion of the City’s fixed costs, such as water facilities repairs and replacements, meter reading, and customer service.

4. Variable rates: the rates are calculated based on the cost of water supplies, the cost of managing the City’s reclaimed water resources at regular and peak use and distributing water throughout the system to customers. The remaining fixed costs that are not recovered via fixed charges are also recovered from variable charges. The rates are billed per hundred cubic feet.

Together, the two components (fixed and variable) are calculated to recover the proportionate cost of providing water service attributable to each customer. Table 93 shows the costs which are allocated to either fixed or variable rates. The revenue offset is made up of non-operating revenues which will be collected in the test year and primarily includes interest income.

Table 93. Allocation of Fixed and Variable Costs24
Expense Category Fixed Variable
Source of Supply $334,162
Base $1,623,659
MDD $1,207,166
PHD $527,032
Meters $697,968
Customer Service $35,788
Conservation $7,241
Revenue Offset -$31,016
24 Revenue offsets are the direct use of non-operating revenues shown in table 66 to offset variable rates

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79 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Monthly Fixed Charge
All meter costs are divided by the number of equivalent meters using the AWWA ratio discussed in the Key Assumptions section to compute the unit cost for each cost component. Customer service costs are simply divided by the number of bills since the service requirements of this cost type are the same regardless of the meter size installed on a property. Table 94 shows the total costs allocated to each cost category, the number of units for the category, and the cost for a year and a month of service for each cost unit. The resulting monthly unit costs are used to calculate the fixed customer rates.

Table 94. Fixed Cost Components Divided by Number of Units Cost Units Cost
per Unit
Cost per
Month
Meter $697,968 3,249 $214.86 $17.90
Service $35,788 387 $92.52 $7.71
Table 95 shows the monthly fixed charge calculation by meter size for reclaimed water service customer connections.

Table 95. Monthly Reclaimed Water Service Fixed Charge Calculation Meter
Size
Meter
Charge
Meter
Ratio
Total
Meter
Customer
Service
Monthly
Rate
5/8" $17.90 x 1.00 = $17.90 + $7.71 = $25.62
3/4" $17.90 x 1.50 = $26.86 + $7.71 = $34.57
1" $17.90 x 2.50 = $44.76 + $7.71 = $52.47
1 1/2" $17.90 x 5.00 = $89.52 + $7.71 = $97.23
2" $17.90 x 8.00 = $143.24 + $7.71 = $150.95
3" $17.90 x 17.50 = $313.34 + $7.71 = $321.05
4" $17.90 x 31.50 = $564.00 + $7.71 = $571.71
6" $17.90 x 80.00 = $1,432.39 + $7.71 = $1,440.10
8" $17.90 x 140.00 = $2,506.68 + $7.71 = $2,514.39
10" $17.90 x 210.00 = $3,760.02 + $7.71 = $3,767.73
The proposed monthly fixed charge for the base equivalent meter (5/8 inch) is $25.62 per month.

The proposed five-year monthly fixed charges for all reclaimed water customers are shown in Table 96.

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80 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Table 96. Proposed 5-year Fixed Charge Schedule
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Proposed Adjustment 4.0% 4.0% 4.0% 4.0% 4.0%
Meter Size FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
5/8" $26.64 $27.70 $28.81 $29.96 $31.16
3/4" $35.95 $37.38 $38.88 $40.43 $42.05
1" $54.57 $56.75 $59.02 $61.38 $63.84
1 1/2" $101.12 $105.16 $109.37 $113.75 $118.30
2" $156.98 $163.26 $169.79 $176.58 $183.65
3" $333.88 $347.24 $361.13 $375.57 $390.60
4" $594.58 $618.36 $643.10 $668.82 $695.57
6" $1,497.70 $1,557.61 $1,619.91 $1,684.71 $1,752.10
8" $2,614.96 $2,719.56 $2,828.34 $2,941.48 $3,059.14
10" $3,918.44 $4,075.17 $4,238.18 $4,407.71 $4,584.02
Variable Reclaimed Water Rates
Variable rates are designed based on variable costs such as conservation and base and peak delivery costs. The current water budget rate structure was maintained to mitigate rate impacts, though the number of tiers was reduced from four to two. Variable rates are made up of a number of cost components, all derived individually for each customer class: Water Supply, Base Costs, Peaking Costs, and Conservation Costs. Water supply costs are offset by the City’s non-operating revenues.

Proposed Tier Widths
The following formula displays a typical water budget calculation for reclaimed water customers. Under the current and proposed rate structure, reclaimed water budgets are calculated in the formula below.

Water Budget for Reclaimed Water Customers
=
𝑳𝒂𝒏𝒅𝒔𝒄𝒂𝒑𝒆 𝑨𝒓𝒆𝒂 (𝑰𝒓𝒓𝒊𝒈𝒂𝒃𝒍𝒆)25 ×
𝑬𝑻𝑶26
𝟏𝟐 𝒊𝒏/𝒇𝒕
𝟏𝟎𝟎 𝒔𝒇/𝒉𝒄𝒇 × 𝑳𝑭 × 𝑫𝑭
Where:

Landscape Factor (LF) is set to 80% to the amount of water needed for irrigation to encourage conservation. This is consistent with the State of California Code of Regulations Title 23, Section 491 25 Landscape Area (or Irrigable Area in square feet) is the measured irrigable landscape area served by a customer’s meter 26 Evapotranspiration (ET0) is measured in inches of water during the billing period based on actual ET from CIMIS weather station # 044.

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81 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study and an expected parameter to be used for LF under Assembly Bill No. 1668 (AB 1668) and Senate Bill No. 606 (SB 606), approved in May 2018.

Drought Factor (DF) is currently set at 1. The City may apply this additional parameter to the equation if the State mandates reduction of water usage due to drought.

Example for Reclaimed Water Budget (Tier 1) for (Current and Proposed) with 10,000 sf. Parcel Size with ETO @ 10 inch
=
10,000 ×
10 12 𝑖𝑛/𝑓𝑡
100 𝑠𝑓/ℎ𝑐𝑓 × 0.8 × 1.0 = 66.7 ℎ𝑐𝑓
Use which is above a customer’s water budget is included in tier 2. Tier 2 includes all water use which is greater than the total budget. Table 97 shows the current and proposed tier widths under the described water budget-based rates.

Table 97. Current and Proposed Reclaimed Water Tier Width Allocations Customer
Class
Tier Definition
Current
Tier Definition
Proposed
Reclaimed
Tier 1 Total Budget Total Budget
Tier 2 101-150% of Budget Use over Budget
Tier 3 151-200% of Budget N/A
Tier 4 Over 200% of Budget N/A
Variable Cost Components
Supply Costs
Supply costs are divided by total water use to determine the unit cost shown in Table 98. The base unit cost is applied to all water use.

Base Costs
Base costs are divided by total water use to determine the unit cost shown in Table 98. The base unit cost is applied to all water use.

Peaking
Peaking costs, the sum of MDD and PHD costs allocated to each tier are divided by total water use in each category to determine the unit cost shown in Table 98. The corresponding peaking unit cost is applied to all water use based on the tier percentage in Table 88.

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82 City of Corona – 2024 Water, Reclaimed Water, and Sewer Rate Study Conservation
Conservation costs are divided by total water use in tier 2 to determine the unit cost shown in Table 98.

All customers will pay all conservation costs in the upper tier. The corresponding conservation cost is applied to all water use in tier 2.

Revenue Offset
Revenue offsets are divided by total water use in tier 1 to determine the unit cost shown in Table 98. All customers benefit from the non-operating revenue when they stay within their water budgets.

Table 98. Variable Rate Costs and Components as Allocated to each Tier Tier Water
Use Supply Unit $ per hcf Base Unit $ per hcf Peaking Unit $ per hcf Conservation Unit $ per hcf
Revenue
Offset
Unit $
per hcf
Tier 1 1,425,082 $298,767 $0.21 $1,451,678 $1.02 $1,526,134 $1.07 $0 $0.00 -$31,016 -$0.02 Tier 2 168,830 $35,395 $0.21 $171,980 $1.02 $208,065 $1.23 $7,241 $0.04 $0 $0.00 Variable Rate Components
Table 99 shows the calculation used to determine the variable rates for each tier. Supply costs are added to peaking, conservation, and base costs to calculate the variable rates. Rates are then reduced by revenue offsets, which were set aside in the cost of service analysis.

Table 99. Variable Rate Calculation
Tier Supply
Cost
Base
Cost
Peaking
Cost
Conservation
Cost
Revenue
Offset
Variable
Rate
Tier 1 $0.21 + $1.02 + $1.07 + $0.00 - $0.02 = $2.28
Tier 2 $0.21 + $1.02 + $1.23 + $0.04 - $0.00 = $2.50
In future years, the rates will be escalated by the revenue adjustments and the five-year rate schedule is shown in Table 100. Each adjustment will occur in January, midway through the fiscal year.

Table 100. Proposed 5-Year Variable Rate Schedule
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Proposed Adjustment 4.0% 4.0% 4.0% 4.0% 4.0%
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
Tier 1 $2.37 $2.46 $2.56 $2.66 $2.77
Tier 2 $2.60 $2.71 $2.82 $2.93 $3.05

4.4 Bill Impact Analysis
This analysis compares customers’ bills under current and proposed rates. Figure 16 shows the dollar change in the bill based on 1 1/2” meter customer’s, use at selected usage points. The City’s average 1

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Corona City CouncilDecember 4, 2024

Corona City Council
December 4, 2024