Cotati City Council
April 12, 2022

hundred square feet, may be devoted to the sale of incidental goods for personal cannabis cultivation and use or promotional items such as clothing, hats or posters. Cannabis Consumption Cafes/Lounges are not subject to this the five percent or two hundred square foot limitation.
i. No cannabis shall be consumed on the premises. For purposes of complying with this requirement, the term “premises” includes the physical building and leasehold space, as well as any accessory structures, parking areas, sidewalks, driveways or other immediate surroundings except for permitted Cannabis Consumption Cafes/Lounges associated with cannabis Retail Dispensary. j. No Retail Dispensary or associated Cannabis Consumption Café/Lounge may increase in size without amending its cannabis permit, as applicable. The size limitation shall be included in the operational plan required by subsection C. Standards for Storefront Commercial Cannabis Retail and Microbusinesses, paragraph 7.
k. A Retail Dispensary shall not have
a physician on site to evaluate patients for
medical cannabis.
l. Parking must meet the requirements of Chapter 17.36. m. Retail Dispensaries and on-site Cannabis Consumption Café/Lounge operating hours shall be limited to: Monday – Sunday: 8 a.m. to 10 p.m.

If the licensee holds a Type 12 microbusiness license, cultivation and manufacturing hours shall be established and approved through the cannabis permit process. n. Delivery. Delivery of cannabis is allowed by Retail
Dispensaries. Delivery functions must be included in the cannabis permit materials and approved as a discrete function. Delivery functions shall be in conformance with state law and all of the following:
i. Deliveries can only be conducted between the hours of 8 a.m. to 10 p.m.
iii. Deliveries shall be made by an employee of the licensed Retail Dispensary and said employee shall carry with him/her at all times a physical copy of the city commercial cannabis permit and business license and state license when such a license is available. Licensed Formatted: Font: Not Bold, Font color: Auto
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Packet Pg. 562 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge)

Retail Dispensaries shall comply with all state law and regulations pertaining to cannabis delivery.
o. Cannabis Consumption Café/Lounge.

Cannabis Permit applications or amendments to Retail Dispensary cannabis permits shall include a statement as to whether the use will include a Cannabis Consumption Café/Lounge. If included, the application shall clearly indicate the proposed area for the use and a detailed operational plan that demonstrates compliance with the requirements set forth in subsection
A. Standards for All Commercial Cannabis Uses and subsection C. Standards for Storefront Commercial Cannabis Retail and Microbusinesses, Chapter 9-31 (Smoking and Secondhand Smoke), and other local and state laws, permits and other applicable requirements.

Cannabis Consumption Café/Lounge shall also be subject to the following requirements to be demonstrated to the City’s satisfaction in the cannabis permit application or amendment:

1. Patients or Customers. Only patients or customers 21 years of age or older are to be permitted entry to the Cannabis Consumption Café/Lounge and shall be posted as such in accordance with state law.

2. The Cannabis Consumption Café/Lounge must be located on the same legal parcel as the associated Retail Dispensary.

3. Only Cannabis or Cannabis Products from the associated Retail Dispensary shall be brought into or delivered to the Cannabis Consumption Café/Lounge utilizing internal customer access following purchase between the retail and consumption areas or other secure internal automated means. Deliveries of Cannabis or Cannabis Products to the Cannabis Consumption Cafe/Lounge, if any, shall only be allowed in accordance with the approved Cannabis Retail permit and state law.

4. If permitted under state law and approved under the City Retail Dispensary permit, a Cannabis Consumption Cafe/Lounge preparing or selling non-cannabis foods or beverages shall comply with all applicable provisions of the California Retail Food Code (Chapter 1 (commencing with Section 113700) of Part 7 of Division 104 of the Health and Safety Code), as applicable. Cannabis Consumption Café/Lounges preparing or selling non-cannabis foods or beverages may be subject to additional cannabis permitting and inspection requirements of the Sonoma County health official, per subsection
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Packet Pg. 563 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge)

A. Standards for All Commercial Cannabis Uses, paragraph 5. Adjustments to an existing Retail Dispensary permit to allow for the preparation or selling of noncannabis foods or beverages shall be subject to the review and approval of the City Manager or his/her designated review authority.

5. A Cannabis Consumption Café/Lounge shall not allow the sale, consumption, or use of alcohol or tobacco on the premises.

6. A Cannabis Consumption Cafe/Lounge shall only sell cannabis to a customer/patient in an amount that is reasonable and consistent with personal possession and use limits allowed by the state or is otherwise protective of customer/patient health and protects the public. Implementation of a responsible cannabis service program and safe driver program acceptable to the City is required, including means to effectively manage edible cannabis or other products with delayed onset intoxication.

7. If permitted under state law and approved under the City Retail Dispensary permit, any retail sales of Cannabis or Cannabis Products in the cannabis consumption café/lounge shall include appropriate controls and security of product inventory as well as cash handling and point of sale terminals, consistent with the requirements for Retail Dispensaries.

8. Cannabis and Cannabis Products purchased at the associated Retail Dispensary or in the Cannabis Consumption Café/Lounges may be removed from their packaging and consumed in the permitted area. Cannabis and Cannabis Products not fully consumed must be resealed in their original packaging, placed in opaque packaging, and taken off site by the customer/patient.

9. Ingestion of cannabis or cannabis products shall not be visible from any public place or non-age restricted area.

10. The space occupied by a Cannabis Consumption Cafe/Lounge shall be definite and distinct from the space where other licensed activities are exercised and shall be accessed through a separate entrance.

11. The entrance to the Cannabis Consumption Café/Lounge shall be clearly and legibly posted with a notice indicating that smoking and vaping of Cannabis is prohibited on-site or in the vicinity of the site, except in designated areas (as permitted in accordance with Chapter 9-31 (Smoking and Secondhand Smoke) and state law.
p. Record Keeping. A cannabis Retail Dispensary shall maintain records in accordance with the state and local requirements of its license type.

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Packet Pg. 564 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge)

If a Retail Dispensary sells medical cannabis , it shall maintain records using only the State of California Medical Marijuana Identification Card numbers issued by the county or the county’s designee, pursuant to California Health and Safety Code Section 11362.7 et seq. as a protection for the confidentiality of the cardholders. The Retail Dispensary shall track when members’ medical cannabis recommendations and/or identification cards expire and enforce conditions of membership by excluding members whose identification cards or recommendations are invalid or expired. The facility shall maintain member records in a manner to protect confidential information in the records if the records contain information protected by applicable law, including but not limited to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and Public Law 104-191. A medical Retail Dispensary shall exclude members who are caught diverting cannabis for nonmedical use. All membership records shall be maintained on site. i. A Retail Dispensary shall, by using the patient’s or caregiver’s identification number, keep an accurate account of the number of members who visit the dispensary each month, and also for the entire permit year. ii. The Retail Dispensary shall keep accurate records, follow accepted cash handling practices and maintain a general ledger of cash transactions. iii. The Retail Dispensary shall allow the city to access the books, records, accounts and all data relevant to its operations for purposes of conducting an audit or examination to determine compliance with the municipal code, administrative regulations, conditions of approval, and applicable laws. Books, records, accounts and all relevant data shall be produced no later than twenty-four hours after receipt of the city’s request. q. Required Signage. The following signs, in measurements of not less than eight by ten inches, shall be clearly and legibly posted in a conspicuous location inside the Retail Dispensary where they will be visible to customers in the normal course of a transaction, stating:
ii. “The dispensing of cannabis without a state license is illegal.” ii. “Use or consumption of cannabis on this premises or property is prohibited.” Cannabis Consumption Café/Lounges are exempted from this requirement in the permitted consumption area.
iii. For Retail Dispensaries: “All visitors to this premises must be at least 21 years of age, or, at least 18 years of age and able to show a government issued medical cannabis ID card in accordance with California Health and Safety Code Section 11362.7 et seq.”
Cannabis Consumption Café/Lounges are required to post the following in the Formatted: Font: (Default) Open Sans, 10.5 pt
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Packet Pg. 565 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge)

permitted consumption area: “All visitors to this premises must be at least 21 years of age.”
D. Standards for Manufacturing, Testing, Storage, Distribution and Non-Storefront Retail of Commercial Cannabis

1. Permits shall be issued by the city council according to the requirements of subsection A. Standards for All Commercial Cannabis Uses, paragraph 7 and this subsection D and may include conditions of approval.

2. Additional Operating Standards. In addition to the requirements of subsection A of this section, any base zone requirements, and all state laws and regulations, commercial cannabis uses permitted under this section shall also comply with the following operational standards:
a. Facilities shall not be open to the general public.
b. Extraction Processes. Manufacturers shall utilize only extraction processes that are (i) solvent free or that employ only nonflammable, nontoxic solvents that are recognized as safe pursuant to the federal Food, Drug and Cosmetic Act, and/or (ii) use solvents exclusively within a closed loop system that meets the requirements of the federal Food, Drug and Cosmetic Act, including use of authorized solvents only, the prevention of off gassing, and certification by a California licensed engineer. c. No closed loop systems shall be utilized without prior inspection and approval of the city’s building and fire code officials.
d. Standard of Equipment. Extraction equipment used by the manufacturer must be listed or otherwise certified by an approved third-party testing agency or licensed professional engineer and approved for the intended use by the city’s building and fire code officials.
e. Annual Recertification Required. Extraction equipment used by the manufacturer must be recertified annually and a report by a licensed professional engineer on the inspection shall be maintained on site.
f. Food Handler Certification. All owners, employees, volunteers or other individuals who participate in the production of edible cannabis products must be state certified food handlers. The valid certificate number of each such owner, employee, volunteer or other individual must be on record at the manufacturer’s facility where that individual participates in the production of edible cannabis products. g. Edible Product Manufacturing. Cannabis businesses that sell or manufacture edible medical cannabis products shall obtain a Sonoma County health permit.

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Packet Pg. 566 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge)

Permit holders shall comply with Health and Safety Code Section 13700 et seq. and Sonoma County health permit requirements. These requirements provide a system of prevention and overlapping safeguards designed to minimize foodborne illness, ensure employee health, demonstrate industry manager knowledge, ensure safe food preparation practices and delineate acceptable levels of sanitation for preparation of edible products.

3. Permit Requirements and Restrictions. The following limits on number and location of commercial cannabis facilities apply:
a. The number of permits issued under this section shall not exceed a total of seven (7). These limits do not apply to Type 11 distribution license types issued in conjunction with another allowable type. Only standalone Type 11 license types shall count toward the total number of allowable permits. No more than one of these permits may be issued to a Type 9 non-storefront retailer license holder. The remaining permits may be issued among the allowable types identified in Table 2-2, Allowable Land Uses and Permit Requirements, of Chapter 17.22, in any combination. Permittees who obtain state licenses for both adult (recreational) and medical uses for the same premises shall require one commercial permit from the city.
b. Specific to Non-Storefront Retailers. Any commercial cannabis permit issued to a non-storefront retailer with a Type 9 license, or a state cannabis license type subsequently established, will be subject to the requirements set forth in this subsection D and not those set forth in subsection C. Standards for Storefront Commercial Cannabis Retail and Microbusinesses for storefront retailers. In addition, the following specific requirements shall apply. Non-storefront retailers:
i. May not be located within six hundred feet of a cannabis retailer with a storefront. There is no spacing or distance requirement to any other commercial cannabis business.
c. No facility permitted under this section shall be located on any parcel containing a dwelling unit, nor within six hundred feet of any school, or within one hundred feet of a residential zoning district.
d. The distances listed above shall be measured between the nearest entrances of the cannabis facility and the above listed use, along the shortest route intended and available for public passage.
e. All Level II manufacturing facilities require a cannabis permit issued in accordance with Section 17.62.050. All cannabis permits issued for a Level II manufacturing facility shall include the following provision: “This Formatted: Font color: Auto, Not Highlight
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10.a
Packet Pg. 567 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge)

cannabis permit shall expire upon change of tenancy or sale or transfer of the business.”

4. Manufacturing and delivery operations shall be subject to additional permitting and inspection requirements of the Sonoma County health official, per subsection A. Standards for All Commercial Cannabis Uses, paragraph 5.

E. Grounds for Permit Revocation or Modification.

Noncompliance with any requirement of this section shall be treated as a violation of the city’s municipal code and permits issued may be revoked or modified in accordance with Section

17.89.070(C) and the city shall have the right to recovery of all costs to revoke or modify the permit in accordance with Section 17.89.080 and to levy fines in accordance with the city’s adopted bail schedule.

Section 9: Construction and severability.

It is the intent of the City Council of the City of Cotati to supplement applicable state and federal law and not to duplicate or contradict such law, and this ordinance shall be construed consistently with that intent. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this ordinance, or its application to any person or circumstance, is for any reason held to be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or enforceability of the remaining sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases of this ordinance, or its application to any other person or circumstance. The City Council of the City of Cotati hereby declares that it would have adopted each section, subsection, subdivision, paragraph, sentence, clause or phrase hereof, irrespective of the fact that any one or more other sections, subsections, subdivisions, paragraphs, sentences, clauses or phrases hereof be declared invalid or unenforceable.

Section 10: Effective date.

This ordinance shall take effect thirty (30) days after its adoption pursuant to California Government Code.

Section 11: Publication. The city clerk shall cause this ordinance to be published and/or posted as required in Section 36933 of the California Government Code.

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Packet Pg. 568 Attachment: Exhibit 1: Cannabis Ordinance (Commercial Cannabis Ord. Revisions - Retail Consumption Lounge) RESOLUTION NO.

RESOLUTION OF THE COUNCIL OF THE CITY OF COTATI AMENDING THE

INITIAL TAX RATES FOR AN ADDITIONAL THREE- YEAR TERM
WHEREAS, the City of Cotati has responsibly and proactively managed its finances and its taxpayer dollars through transparent budget and decision-making processes and recently enacted Measure S to ensure the City’s long-term fiscal stability; and WHEREAS, on November 5, 1996, the California voters enacted Proposition 215 to legalize medical use of cannabis, and in October 2015, the Governor signed into law the Medical Marijuana Regulation and Safety Act (now known as the Medical Cannabis Regulation and Safety Act or “MCRSA”), establishing a state licensing framework and authorizing local regulation of the medical cannabis industry; and WHEREAS, on November 8, 2016, California voters enacted Proposition 64 to legalize adult recreational use of cannabis and to allow businesses that support such cannabis use to operate legally, subject to regulations imposed by state and local public entities; and
WHEREAS, the State of California Governor’s Office proposed a series of amendments to the state’s regulatory structure during the budget process, known as “SB 94”, “the Governor’s Trailer Bill,” in order to better align the requirements of MCRSA and Proposition 64, now known as the Medical and Adult Use Cannabis Regulation and Safety Act or “MAUCRSA,”
WHEREAS, the voters of the City of Cotati authorized a cannabis business tax on November 7, 2017 with a 78.8% “yes” vote, to permit and support of the cannabis industry, in association with the earlier passage of Proposition 215, and the recent enactment of MCRSA and passage of Proposition 64; and
WHEREAS, the existing cannabis business tax, adopted by the City Council on August 8, 2017 (Resolution 2017-46), contingent on voter authorization of the cannabis business tax, supports regulation of the industry and is an important source of funding and financial stability for essential services such as police and fire protection, 911 emergency response times, streets and road maintenance, recreational programs and other general city services; and
WHEREAS, it is in the interest of the citizens and the City that all cannabis businesses contribute to local cannabis business taxes to support the aforementioned programs and services for the community; and
WHEREAS, the City recognizes the continuing volatility as the legal market matures, high state excise tax, and limited federal tax write-offs, as well as continuing competition from the unregulated illegal cannabis market and will therefore amend and Packet Pg. 569
continue the limited initial tax rates to balance the financial needs of the City and the desire of the City to support and encourage the industry to engage in the regulated market.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COTATI
RESOLVES AS FOLLOWS:

Section 1. Recitals.

The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

Section 2. Cannabis Business Tax Rates.

The cannabis business tax rates shall be set as follows for a minimum term of three (3) years:

1. Cultivation Rate: two percent (2%) of gross receipts or $5.00 per square foot of cannabis cultivation area, at the taxpayer’s election, except that vertically integrated businesses, as defined in Section 5.30 of the Cotati Municipal Code, must use the per square foot rate.

2. Manufacturing Rate: one percent (1%) of gross receipts

3. Distribution Rate: zero percent (0%), except that cannabis business that are distribution only businesses shall be taxed at two percent (2%) of gross receipts.

4. Retailers Rate: three percent (3%) of gross receipts. Sales to persons with a physician’s recommendation or a state issued medical identification card, issued for medical purposes, shall be excluded from the calculation of gross receipts for the purpose of the cannabis business tax. Physician’s recommendation means a recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code. State issued medical identification card means a document issued by the State Department of Public Health that identifies a person authorized to engage in the medical use of cannabis and the person’s designated primary caregiver, if any, in accordance with Section 11362.71 of the Health and Safety Code.

Section 3. Effective Date.

This Resolution shall take effect on July 1, 2022.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on the April 12th, 2022, by the following vote, to wit:

Approved:________________________________
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Mayor
Attest:____________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:
____________________________
City Attorney
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: Appointment of Planning Commission Member
Date: April 12, 2022
Written by: Kevin Patterson, Deputy City Clerk
Recommendation
It is recommended that the Council ratify, by adoption of a motion, Councilmember Sparks' nomination to fill the vacant Planning Commission position.

Background
Qualifications, terms, and appointment process for the City’s Planning Commission (Commission) are set forth in Chapter 2.16 of the City’s Municipal Code. The Commission is comprised of five members, each of which is nominated by one of the five Council members, and ratified by a majority of the Council. Commissioner terms are coincident with, and at the discretion of, the nominating Council member. Section 2.16.050 of the Municipal Code requires all Commissioners to be residents of the City.

The vacant position was advertised on the City’s social media, in the Community Voice newspaper, and on the City’s Website. Applications were received up to and on the April 7, 2022 deadline. Due to applications being received near the close of the application period, the candidates are still being considered for nomination at the time of agenda publication.

A total of four applications were received for Planning Commission. The applications are attached for review and indicated in the table below.

Analysis/Discussion
The current composition of the Commission is as follows:

COMMISSIONER NOMINATING COUNCIL
MEMBER

CURRENT TERM

EXPIRATION
Sylvia Lemus John Moore 2022
Brittany Murphy Mark Landman 2022
Lisa Moore Susan Harvey 2024
Vacant Laura Sparks 2024
Neil Hancock Ben Ford 2024

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The applicants for Planning Commission are as follows:

Nominees: Responsible Councilmember:

John T. Savage,
David Wasson,
Kay Rivers
Kimberlyn Moffet
Laura Sparks
Councilmember Sparks will nominate one of the applicants prior to or at the City Council meeting. The Council can ratify Councilmember Sparks’ nomination by a majority adoption of a motion.

Financial Considerations
The Community Development Department, as staff to the Planning Commission, supports the needs of the Planning Commission through the Department’s operating budget.

Environmental Issues
The action of appointing a Planning Commissioner is exempt from the California Environmental Quality Act (CEQA) because they are not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.

Attachments:

John T. Savage Planning CommissionApplication_Redacted (PDF) Dave Wasson Planning Commission Application_Redacted (PDF) Kay Rivers Planning Commission Application Redacted (PDF) Kimberlyn Moffet Planning Commission Application Redacted (PDF)

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Packet Pg. 573

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Packet Pg. 574
Attachment: John T. Savage Planning CommissionApplication_Redacted (Planning Commission Appointment)

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Packet Pg. 575
Attachment: John T. Savage Planning CommissionApplication_Redacted (Planning Commission Appointment)

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Packet Pg. 576 Attachment: Dave Wasson Planning Commission Application_Redacted (Planning Commission Appointment)

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Packet Pg. 577 Attachment: Dave Wasson Planning Commission Application_Redacted (Planning Commission Appointment)

APPLICATION FOR COUNCIL APPOINTMENT TO ADVISORY BODY
Revised 1/25/2021
Choose one; please complete a separate application for each advisory body for which you would like to be considered.

CONTACT INFORMATION

EDUCATION
✔ High School Graduate; or Location:
 GED Cupertino, CA
College/University Major Degree/Date
Institute of Transpersonal Psychology Psychology Doctorate University of Phoenix Organizational Management Master's Humboldt State University Spanish, Minor: Psychology Bachelor's Other formal education:
_ _ _
CA Teaching Credential: English, Spanish,_Health, and Home Ec_onomics Teaching English as a Second Language Ce_rtificate, CLAD & ITIL C_ertifications First Name: Kristin (Kay) Last Name: Rivers, Ph.D.

Mailing
Address:

E-mail:

Phone:

Alt phone:

Five Rivers: 612 West Cotati Avenue, Cotati, CA 94931
[email protected]
408-888-0757
Advisory body to which appointment is sought:
✔

Planning Commission 

Measure G Oversight Committee
Marin/Sonoma Mosquito & Vector Control District Other
This application is considered a public record pursuant to The California Public Records Act (Government Code 6520 et seq.) and may be made available to any member of the public upon request. Appointee’s contact information may be published in the City of Cotati public informational roster.

Appointees to certain advisory bodies will be required to complete a Statement of Economic Interest as required by California Government Code §87200 et seq. and the City of Cotati Conflict of Interest Code.

11.A.c
Packet Pg. 578 Attachment: Kay Rivers Planning Commission Application Redacted (Planning Commission Appointment) Application for appointment to advisory body

EMPLOYMENT HISTORY
List all employment during the last five years. If retired, list last employer.

Period Employer (include location) Position/Title
2021-present Healdsburg Unified School District High School Teacher 2019-2021 Santa Clara County Office of Education Court & Community Teacher 2014-2019 Cisco Systems Operations Manager

PERSONALINFORMATION
Year you became a Cotati resident: _2021
Are you a City of Cotati registered voter? ✔ Yes No
Are you related to any member of the City Council, any City advisory body Member or City Employee? If yes, please list name and relationship:
Yes ✔ No
Are you currently a vendor or contractor with the City of Cotati Yes ✔ No Are you currently employed by the City of Cotati? Yes ✔ No Have you ever been convicted of a felony? If yes, please explain:
n/a
Yes ✔ No
List civic activities, clubs, associations, etc.:

Member: Petaluma_Pride Board and Co_tati Historical Society _,
former San José City
_
Library & Education C_ommissioner, Santa C_lara County CEDAW Briefly state your reasons for interest in the appointment sought:

I would appreciate a_pplying my training, _skills, and experience_ to contribute to my new hometown_ in this way. _ _
Please initial the following 2 paragraphs:

KR
I understand that this application is considered a public record pursuant to The California Public Records Act (Government Code 6520 et seq.) and may be made available to any member of the public upon request. Appointee’s KR contact information may be published in the City of Cotati public informational roster.

I understand that appointees to certain advisory bodies will be required to complete a Statement of Economic Interest as required by California Government Code §87200 et seq. and the City of Cotati Conflict of Interest Code.

I certify that the foregoing is true and correct to the best of my knowledge:

Kristin Rivers Ph.D. Digitally signed by Kristin Rivers Ph.D. 4/5/2022 Dat _
e: 2022.04.05 08:31:16 -07'00' _ _ Signature Date
Emergency contact information (confidential; for emergency use only):

Jean Rivers Wife 408-203-8448
_ _ Name Relationship Phone number
Thank you for your interest. Please return completed form to the 'HSXW\ City Clerk via email at NHSDWWHUVRQ#FRWDWLFLW\ RUg or delieverto City of Cotati, Attn.: Deputy City Clerk, 201 West Sierra Avenue, Cotati, CA 94931-4217 Y:\PROCEDURES SOPS\CMO Procdures SOPs\CITY CLERK PROCEDURES MANUAL\18.Advisory Bodies (City Commissions and Committees)\ADVISORY BODIES (Boards-Commissions etc.)\Application for Appointment to Advisory Body.docx

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Packet Pg. 579 Attachment: Kay Rivers Planning Commission Application Redacted (Planning Commission Appointment) KRISTIN (KAY) RIVERS, PH.D.

Cotati, CA 94931 [email protected]
408.888.0757 www.linkedin.com/in/kristin-rivers-ph-d

COTATI CITY PLANNING COMMISSIONER
Accomplished community leader with history of success facilitating communication, motivation and community development, relationship building, and delivery of exceptional programs and services. Known for leading by focusing on strengths, positive outcomes, and how to get there. Skilled at building cohesion through listening, collaborating, and solving complex problems in innovative and meaningful ways. Ensures constituents’ best interests are at the core of every decision made. Key skills include:

Decision-making | Diversity & Inclusion | Community Development | Professional Development & Training | Effective, Timely, and Successful Solutions | Root Cause Analysis | Research, Writing, and Presenting | Spanish

EDUCATION AND TEACHING CREDENTIALS
• Doctor of Philosophy (PhD), Psychology, Concentration in Transpersonal Psychology, o Specialization in Creative Expression, Institute of Transpersonal Psychology, Palo Alto, CA. • Master of Arts in Organizational Management (MAOM), University of Phoenix, San José, CA. • Bachelor of Arts (BA), Spanish Teaching, Minor in Psychology, Humboldt State University, Arcata, CA. • California Professional Clear Single Subject Teaching Credentials:
o English, Spanish, Health, English as a Second Language, and Home Economics, California Commission of Teaching Credentialing, Sacramento, CA.
• National Board-Certified Teacher:
o English as a New Language for Adolescents and Young Adults, National Board of Professional Teaching Standards.

PROFESSIONAL EXPERIENCE
Healdsburg Unified School District, Healdsburg, CA. 2021 – present Alternative Education Teacher,
• Employ Big Picture Learning Model to develop and deliver English, Social Studies, Art, and Physical Education (11th – 12th graders) at the Marce Becerra Academy Continuation High School.

Santa Clara County Office of Education, San José, CA. 2019 – 2021 Alternative Education Teacher,
• Developed and delivered English, Science, Math, and Physical Education (7th – 12th graders) at Gateway Community School, Blue Ridge and Osborne High Schools (at the James Ranch Juvenile Detention Center and Juvenile Hall).

Morgan Hill Unified School District, Morgan Hill, CA. 2019 English and Theater Arts Teacher,
• Taught American Literature (11th grade) and Theater Arts (9th-12th graders) at Live Oak High School.

11.A.c
Packet Pg. 580 Attachment: Kay Rivers Planning Commission Application Redacted (Planning Commission Appointment) San José Unified School District, San José, CA. 2002 – 2014 High School Teacher and English Language Program Coordinator, Developed and delivered English, English Language Development (aka English as a Second Language), Mexican American Culture, Prenatal Health, Infant, Toddler Development, 1st and 2nd-Year Spanish, Spanish Literature, Genealogy, and Social Studies.
• As Migrant Education Resource Teacher, led Portable Assisted Study Sequence (PASS) program for federally-designated migrant students throughout school district to facilitate reduction of students’ credit deficiencies.
o Collaborated with District IT Department to design modifications to Student Management System for administrators to view students’ progress online.
o Established, maintained, and reported on accurate and current records of migrant students’ academic achievement.

East Side Union High School District, San José, CA. 2014-2015 Citizenship and English as a Second Language Instructor • Taught Citizenship and English as a Second Language to adult students at Overfelt Adult Center.

Cisco Systems, Inc., San José, CA. 1996 – 2002 and 2014 – 2018 High Touch Operations Manager,
• Led Service Delivery teams in Public and Commercial sectors. Supported Fortune 6 company with $179 billion in annual revenue. Facilitated first-ever 5-year and 2-year Service Contract renewals. o Developed and delivered LGBT+ Proud Mentorship and Bring Your Whole Self to Work programs. o Mentored and served as Lead facilitator in company-wide New Employee Orientation program. • As Serviceability Design Engineer, conceived of and led SoftwareOrganization Release Team (SORT) facilitating the coordination of software release from its inception through initial delivery. o Collected, analyzed, and reported on customer requests for bug fixes and feature enhancements coordinating their application and delivery.
• As Software Program Manager, managed IOS Software releases and software beta testing. o Designed and taught Software Release Process Training to newly hired engineers. o Coordinated, maintained, and distributed accurate and current records of external beta testers' and software users’ concerns: Ensuring internal engineers’ attention to them before initial and subsequent software release.
• As Customer Service Representative, supported Sales teams’ order processing, and problem resolution. o Developed and delivered Order Processing training for newly-hired Sales Account Managers. o Constructed and maintained web pages, initiated, developed, and delivered HTML Training classes.

Passage Systems, Cupertino, CA. 1995 – 1996
Technical Trainer,
• Managed, created, and presented software training, training materials and authoring guides.

San José, Rialto, and West Contra Costa Unified School Districts, San José, CA. 1990 – 1995 Secondary School Teacher,
• Developed and delivered English as a Second Language, 1st and 2nd-Year Spanish, and Social Studies.

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Packet Pg. 581 Attachment: Kay Rivers Planning Commission Application Redacted (Planning Commission Appointment)

ADDITIONAL RELEVANT EXPERIENCE
• Public School Board Candidate,
o East Side Union High School District, earned 33,913 votes, San José, CA. o Value-Based Platform: Respect. Equity. Inclusion. Championing the needs of all students, teachers, and employees: especially those from marginalized groups. o Core Team: 7 women (6 of color) and 2 transgender volunteers. • Author, Researcher, and Doctoral Dissertation Committee Member, o The Weight of Abuse: Releasing Fear and Feeling Safe in Your Body, Seattle, WA. https://www.amazon.com/Weight-Abuse-Releasing-Fear-Feeling/dp/B08R3HYD6F o Autoethnography Research Method Expert on Leta Kingfisher’s doctoral dissertation committee, A Love Story. The Lived Experience of Colonization During the Emergence of Spiritual Healing Abilities in a Nehîyewâw Iskew: An Autoethnographic Study.
o Transpersonal Genealogy: An Autoethnographic Study Juxtaposing the Lived Experience of An Early Mormon Ancestor with Her Lesbian Descendant, Palo Alto, CA. o It Gets Better: Coming Out, Overcoming Bullying, and Creating a Life Worth Living, New York, NY. https://pqdtopen.proquest.com/doc/1357141021.html?FMT=ABS • Instructional Facilitator, Panel Speaker, Presenter, and Workshop Facilitator, o Women’s Political Power, International Women’s Day Empowerment Brunch, Vallejo, CA. o Bring Your Whole Self to Work at the Cisco Proud LGBT Mentor Program, San José, CA. o Success in Nontechnical Roles in Tech at the Out for Undergrad Conference, San José, CA. o Character Based Literacy on Santa Clara University Markkula Center for Applied Ethics’ at Portable Assisted Study Sequence (PASS) and Out of School Youth (OSY) Summit, Fresno, CA. o Is it MTV or is it ESL? on using technology in the alternative classroom, at Portable Assisted Study Sequence (PASS) and Out of School Youth (OSY) Summit, Fresno, CA. o That’s So Gay: Confronting LGBT Issues in Education at the International Teachers of English to Speakers of Other Languages (TESOL) Convention, New York, NY.

AWARDS/ELECTIONS/APPOINTMENTS
o Serving on Petaluma Pride Board
o Appointed to Santa Clara County Office of Education Alternative Education Leadership Team o Appointed to San José City Library and Education Commission. o Elected to Board of Directors of the First Unitarian Church of San José. o Served on the California Continuation Education Association (CCEA) Regional Board o Awarded Greatly Enlightened Movement Award by the Democratic Activist Women Now (DAWN). o Elected Institute of Transpersonal Psychology’s Global Student Representative to the Strategic Infrastructure Planning Committee.
o Faculty Advisor to multiple student organizations include Gay Straight Alliance (GSA), Project 10, Class of 2008, and Knitting Circles (donating blankets to NICU handknit by students). o Served on Board of Directors of the Billy DeFrank LGBT Community Center.

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Packet Pg. 582 Attachment: Kay Rivers Planning Commission Application Redacted (Planning Commission Appointment)

APPLICATION FOR COUNCIL APPOINTMENT TO ADVISORY BODY
Revised 1/25/2021
Choose one; please complete a separate application for each advisory body for which you would like to be considered.

CONTACT INFORMATION

EDUCATION
 High School Graduate; or
Location:
 GED
College/University Major Degree/Date
CSU Sacramento Organizational Communication BA / 2008
Other formal education:
_ _ _
_ _
_ _
First Name: Kimberlyn Mailing
Last Name: Moffet
Address:

E-mail:

Phone:

Alt phone:
8741 Fehler Ln
[email protected]
925-457-4131
Advisory body to which appointment is sought:
✔

Planning Commission 

Measure G Oversight Committee
Marin/Sonoma Mosquito & Vector Control District Other
This application is considered a public record pursuant to The California Public Records Act (Government Code 6520 et seq.) and may be made available to any member of the public upon request. Appointee’s contact information may be published in the City of Cotati public informational roster.

Appointees to certain advisory bodies will be required to complete a Statement of Economic Interest as required by California Government Code §87200 et seq. and the City of Cotati Conflict of Interest Code.

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Packet Pg. 583 Attachment: Kimberlyn Moffet Planning Commission Application Redacted (Planning Commission Appointment) KM
Kimberlyn Moffet _ _ _
Application for appointment to advisory body

EMPLOYMENT HISTORY
List all employment during the last five years. If retired, list last employer.

Period Employer (include location) Position/Title
2018- Present Community Matters (Santa Rosa) Program & Training Manager 2016-2017 Stockton Teachers Association (Stockton) Membership Coordinator 2013-2016 St Mary's Dining Room (Stockton) Development Manager

PERSONALINFORMATION
Year you became a Cotati resident: _2019
Are you a City of Cotati registered voter? ✔ Yes No
Are you related to any member of the City Council, any City advisory body Member or City Employee? If yes, please list name and relationship:
Yes ✔ No
Are you currently a vendor or contractor with the City of Cotati Yes ✔ No Are you currently employed by the City of Cotati? Yes  ✔ No
Have you ever been convicted of a felony? If yes, please explain: Yes ✔ No List civic activities, clubs, associations, etc.:

Rohnert Park Leadership Class 2, Measure S Oversight Committee, Sonoma County Equity in Education, _ _ _ United Flyers of Sonoma (General Member), Petaluma Mothers Club (General Member), Junior League of San Joaquin _ _ _
Briefly state your reasons for interest in the appointment sought:

I'm interested in being an informed and active participant in civic proceedings, promoting public interest in Cotati's general plan, _ _ _
and ensuring equitable land use ordinances that promote and support the diverse social economic population of Cotati. _ _ _
Please initial the following 2 paragraphs:

I understand that this application is considered a public record pursuant to The California Public Records Act (Government Code 6520 et seq.) and may be made available to any member of the public upon request. Appointee’s KM contact information may be published in the City of Cotati public informational roster.

I understand that appointees to certain advisory bodies will be required to complete a Statement of Economic Interest as required by California Government Code §87200 et seq. and the City of Cotati Conflict of Interest Code.

I certify that the foregoing is true and correct to the best of my knowledge:

Digitally signed by Kimberlyn Moffet
DN: cn=Kimberlyn Moffet, o=Community Matters, ou,
[email protected], c=US
Date: 2022.04.07 17:11:17 -07'00'
Signature Date
Emergency contact information (confidential; for emergency use only):

Ryan Moffet _ _ Name
Spouse 858-525-3366
Relationship Phone number
Thank you for your interest. Please return completed form to the 'HSXW\ City Clerk via email at NHSDWWHUVRQ#FRWDWLFLW\ RUg or deliever to City of Cotati, Attn.: Deputy City Clerk, 201West SierraAvenue, Cotati, CA 94931-4217 Y:\PROCEDURES SOPS\CMO Procdures SOPs\CITY CLERK PROCEDURES MANUAL\18.Advisory Bodies (City Commissions and Committees)\ADVISORY BODIES (Boards-Commissions etc.)\Application for Appointment to Advisory Body.docx

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Packet Pg. 584 Attachment: Kimberlyn Moffet Planning Commission Application Redacted (Planning Commission Appointment) Cotati City Council
Agenda Staff Report
Item type:

To: City Council
Subject: Adoption of Resolution Accepting the Draft Water and Sewer Rate Study and directing staff to proceed with the Proposition 218 Public Noticing Process for Proposed Water and Sewer Rate adjustments and to set a date for the Public Hearing and the Adoption of Rates
Date: April 12, 2022
Written by: Craig Scott, Director of Public Works/City Engineer Recommendation
It is recommended the City Council of the City of Cotati adopt a Resolution accepting the Draft Water and Sewer Rate Study and directing staff to proceed with the Proposition 218 public noticing process for the proposed water and sewer rate adjustments and to set a date for the Public Hearing and Adoption of the Rates.

Background
The City operates water and sewer utilities and provides these services for City residents, businesses and public facilities. The City periodically updates its water and sewer rate study to ensure the rates are sufficient to meet operating and maintenance costs. The rate study describes the analysis performed, presents the financial plans for the utilities, provides the basis and rationale for rate calculations, and summarizes findings and recommendations regarding the water and sewer rates. It is industry practice to update rate studies every 2-3 years to account for changing expenses. The current 5-year rate program is based on a rate study completed in March 2017, and the fifth and last year for the rate adjustment occurred in July 2021. It is now time to update the rate study and establish a new 5-year rate program.

Analysis/Discussion
On December 14, 2021, the City Council authorized the City Manager to execute an agreement with Hildebrand Consulting to prepare ten-year water and sewer system financial plans and fiveyear water and sewer rate programs.

The Draft Water and Sewer Rate Study was completed and is attached to the resolution accompanying this Staff Report. The Study presents each utility’s financial and service obligations for ongoing operation and maintenance, debt service, and capital improvements while maintaining prudent reserves. The Study has been completed concurrently and in

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coordination with the City’s Fiscal Year 2022/23 budget for the “Enterprise” (aka Utility) funds.

The Study goes further and presents projected expenses, including capital projects, for a ten-year period. The Capital project list in the Study draws from the respective utility master plans with the timing of the planned improvements revised to reflect reduced demands and slower growth than what was projected in the master plans and to moderate their impact on rates where allowable.

The sewer capital project need is being driven at present by the results of recent studies evaluating the condition of the City’s sewer pipelines and projects to reduce infiltration and inflow of groundwater and stormwater. If methodically addressed, the City can space these projects over the next 10 years. However, the City has a number of street repaving projects aligning with sewer repair and replacement project locations, and these sewer projects have now become a priority to avoid digging up newly paved streets.

The Study recommend water and sewer rate adjustments over 5 years as described in the Draft Rate Study. One change from the prior study, completed in 2017, is the omission of Water Shortage Surcharges. The City has not used the surcharges during the current drought, therefore, the current Study does not propose to renew the surcharge. However, drought surcharges are an effective means of protecting the Water Enterprise from the revenue volatility associated with droughts and the City may consider re-establishing Water Shortage Surcharges during the next rate study.

Utility Rate Revision Process
Following the Study’s acceptance by the City Council, staff will begin the required Proposition 218 public noticing process. Proposition 218 requires the City to hold a public hearing on the proposed rate structures to allow for public comment on the proposed rate increases and to provide written notice to each property owner at least 45 days in advance of the hearing. A draft of the required Proposition 218 notice is attached hereto, and the City Attorney’s office will review the final version before issuance.

Once the public hearing has been conducted, the City Council will consider a rate resolution to adopt the proposed rate structures. It may adopt rate adjustments that are equal to or less than the rates presented in the accepted rate study provided that there is no majority protest.

Financial Considerations
The recommended water rate increase for the summer of this year is consistent with the draft FY 22/23 City Budget for the Enterprise Funds. If a lower percentage was adopted, capital projects may be canceled to provide budgetary savings with lower revenue projections. Although water system revenues are marginally sufficient to cover operating and maintenance expenses and debt service obligations, the revenues are insufficient to maintain a prudent Operating Reserve while simultaneously providing adequate funding for the capital program.

The current sewer system revenues are not sufficient to cover operating and maintenance expenses and the operating reserve is used to make up the short-fall and this is not sustainable.

The annual rate adjustments reverse this situation and the enterprise’s revenues are projected to

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be sufficient to meet expenses after a few years of adjustments. The increasing operating and maintenance costs are primarily driven by the projected increased wastewater treatment costs of the subregional system. Additionally, sufficient capital is needed to address repairing and replacing aging sewer pipelines.

Environmental Issues
The action of approving the Rate Study and initiating the Proposition 218 process does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.

Attachments:
2022 Water/Sewer Rate Study Presentation (PPTX)
Draft Prop 218 Notice 4.8.22 (DOCX)

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Water and Wastewater Financial Plan Updates
Final Recommendations
April 12, 2022

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Packet Pg. 588 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 2 The previous 5-year financial plans for the water and wastewater enterprises ends on July 1, 2021.

Study Objectives:

1. Update the water and sewer system financial plans to reflect changing conditions and plan for the next 5 years.

2. Determine whether a debt strategy is appropriate

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Packet Pg. 589 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 3 Agenda

1. Water Financial Plan
• Financial inputs
• Capital Spending Forecast
• Proposed Rates
• Survey

2. Sewer Financial Plan
• Financial inputs
• Capital Spending Forecast
• Proposed Rates
• Survey

3. Project Schedule

4. Receive direction from Council to mail 218 Notices for Public Hearing.

5. Adopt resolution approving draft financial plan and setting Public Hearing date.

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Packet Pg. 590 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 4 Legal Requirements
for Setting Water and Sewer Rates In California
Proposition 218 (Article XIIID, Section 6 of California Constitution) • Revenues shall not exceed funds required to provide service; nor used for another purpose
• Amount shall not exceed the proportional cost of the service attributable to the parcel
• Service must be actually used or immediately available • Approval process includes 45-day notice, public hearing, and written majority protest. Does not require a voting process (unlike taxes).

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Packet Pg. 591 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 5 Water Rates

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Packet Pg. 592 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 6 Water Cash Balances
Fiscal Year beginning July 1, 2021
Water Operating Reserve $1,172,000
Water Capital Reserve $832,000
Total Water Reserves: $2,004,000

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Packet Pg. 593 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 7 Proposed Reserve Targets
Reserve policies are important for protecting the utility enterprise against unforeseen circumstances, stabilizing revenue requirements, and contributing towards the City’s credit rating.

The following reserve targets are proposed by this Study and are consistent with recent City practices.

Operating Reserve Minimum (City Policy):

Purpose: In the event of sudden increases in operating cost or decreases in revenue.

Target: Equal to 33% of O&M budget
Capital Reserve Target (best practice):

Purpose: For catastrophic failure of critical infrastructure and to manage the inherent volatility of capital spending.

Target: Average annual PayGo capital projects budget

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Packet Pg. 594 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Water Revenue
FY2021/22 Budget
8 Rate Revenue $2,025,000
Non-Rate Revenue
Interest Earnings $18,900
Impact Fee Revenue $111,000
Miscellaneous Fees $40,700
Total: $2,195,600

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Packet Pg. 595 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Water Operating Expenses
FY2021/22 Budget
9 Salaries and Benefits $499,000
Supplies $22,000
Professional Services $191,000
Maintenance $75,000
Utilities $150,000
Conservation $59,000
Taxes, Insurance and Other $451,000
SCWA Water Purchases $515,000
Debt $105,000
Total Budget: $2,067,000

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Packet Pg. 596 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Projected Water Capital Spending
10 Recent average Capital:
$4K
Forecasted average Capital:
$780K
Cypress Storage Tank

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Packet Pg. 597 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Water Proposed Capital Funding Strategy
11 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 $0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
Millio
n
s
Internal Loan
Bond or Grants (TBD)
Cash Funded

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Packet Pg. 598 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Proposed Water Financial Plan
12 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 $0
$1
$2
$3
$4
MILLIO
N
S
Combined Ending Fund Balance
Target Reserve Level
Minimum Reserve Levels
$0
$1
$1
$2
$2
$3
$3
$4
$4
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 T
otalR
e
v
e
n
u
e / E
x
p
e
n
s
e
s ($
M)
Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Cash Capital
Expenses
Revenues

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Packet Pg. 599 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 13 Water Rate Increase Drivers
• 2017 Study anticipated similar annual rate increases during this period. • Operating costs have increased more than projected by the 2017 study

1. Water purchase costs from Sonoma Water (now expected to increase 6% per year)

2. Utility costs have doubled (PG&E rates + increase in groundwater pumping)

3. Additional emergency operations and vehicle replacement costs

4. Increase in contract and chemical costs
• Balloon payment for debt to Sewer Fund is recommended

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Packet Pg. 600 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 14 Proposed 5-Year Water Rate Schedule
Proposed Water Rates 2
Current 2022 2023 2024 2025 2026
Bi-Monthly Service Charge
3/4" meter $47.63 $50.49 $53.52 $56.73 $60.13 $63.74
1" meter $77.87 $82.54 $87.49 $92.74 $98.30 $104.20
1 1/2" meter $152.77 $161.94 $171.66 $181.96 $192.88 $204.45 2" meter $243.01 $257.59 $273.05 $289.43 $306.80 $325.21 3" meter $453.71 $480.93 $509.79 $540.38 $572.80 $607.17 4" meter $754.66 $799.94 $847.94 $898.82 $952.75 $1,009.92 Water Usage Rates ($/TGAL)
Residential
Tier 1 (0 to 10 TGAL)1$4.06 $4.30 $4.56 $4.83 $5.12 $5.43 Tier 2 (10 to 20 TGAL) $5.21 $5.52 $5.85 $6.20 $6.57 $6.96 Tier 3 (over 20 TGAL) $6.49 $6.88 $7.29 $7.73 $8.19 $8.68 Multi-Family, Non-Resid., & Irrigation
All Water Usage $4.51 $4.78 $5.07 $5.37 $5.69 $6.03
1 "TGAL" means thousand gallons
2 New rates implemented on the June 15th of the indicated year

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Packet Pg. 601 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 15 Example of Water Bill Impacts with Year 1 Rates
Meter
Bi-Monthly
Water Use Current
Proposed
Bill Change per Change per
Size (TGAL) Bill (Year 1) Statement Month
Single Family
Low Use 3/4" 6 $71.99 $76.29 $4.30 $2.15
Average Use 3/4" 10 $88.23 $93.49 $5.26 $2.63
High Use 3/4" 24 $145.07 $153.69 $8.62 $4.31
Multifamily
Duplex 3/4" 12 $101.75 $107.85 $6.10 $3.05
Apartment (8 units) 1.5" 40 $333.17 $353.14 $19.97 $9.99 Non-Residential
Retail Business 1" 8 $113.95 $120.78 $6.83 $3.42
Restaurant 1" 20 $168.07 $178.14 $10.07 $5.04
Institution 3" 200 $1,355.71 $1,436.93 $81.22 $40.61
Irrigation 2" 100 $694.01 $735.59 $41.58 $20.79

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Packet Pg. 602 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 16 Sewer Rates

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Packet Pg. 603 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 17 Sewer Cash Balances
Fiscal Year beginning July 1, 2021
Sewer Operating Reserve $3,155,000
Sewer Capital Reserve $286,000
Total Sewer Reserves: $3,441,000

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Packet Pg. 604 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Sewer Revenue
FY2021/22 Budget
18 Rate Revenue $2,722,000
Non-Rate Revenue
Interest Earnings $32,700
Impact Fee Revenue $238,600
Loan Repayment from Water $104,500
Miscellaneous Fees $18,100
Total: $3,115,900

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Packet Pg. 605 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Sewer Operating Expenses
FY2021/22 Budget
19 Salaries and
Benefits

14.0% Supplies

0.2%
Professional
Services

4.1%
Maintenance

1.3%
Utilities

0.4%
Subregional O&M & Debt
Service

64.8%
Taxes, Insurance
and Other

13.1%
Debt

2.0%
Salaries and Benefits $469,000
Supplies $7,000
Professional Services $137,000
Maintenance $45,000
Utilities $15,000
Subregional O&M & Debt Service $2,165,000
Taxes, Insurance and Other $437,100
Debt $68,000
Total Budget: $3,343,100

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Packet Pg. 606 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Needs-Based Sewer Capital Plan
20 Recent average Capital:
$307K
Forecasted average Capital:
$517K

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Packet Pg. 607 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Revised Sewer Capital Spending
21 Recent average Capital:
$307K
Forecasted average Capital:
$402K

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Packet Pg. 608 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Proposed Sewer Financial Plan
22 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 $0
$1
$2
$3
$4
MIL
LIO
N
S
Combined Ending Fund Balance Target Reserve Level
$0
$1
$2
$3
$4
$5
$6
$7
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 T
otalR
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Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Cash Capital
Expenses
R
e
v
enues

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Packet Pg. 609 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 23 Sewer Rate Increase Drivers
• Previous study anticipated similar annual rate increases during this period • Operating costs have increased more than projected by the 2017 study

1. Increase in Subregional costs due to change in meter readings

2. Subregional costs are escalating at 6% per year (previously assumed 5%)

3. Additional emergency operations and vehicle replacement costs

4. Increase in contract and chemical costs
• Keeping pace with streets paving program

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Packet Pg. 610 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 24 Proposed Sewer 5-Year Rate Schedule
Proposed Sewer Rates 2
Current 2022 2023 2024 2025 2026
Bi-Monthly Service Charge
3/4" meter $82.23 $89.63 $97.70 $106.49 $116.07 $126.52 1" meter $135.45 $147.64 $160.93 $175.41 $191.20 $208.41 1 1/2" meter $267.36 $291.42 $317.65 $346.24 $377.40 $411.37 2" meter $426.26 $464.62 $506.44 $552.02 $601.70 $655.85 3" meter $797.31 $869.07 $947.29 $1,032.55 $1,125.48 $1,226.77 4" meter $1,327.26 $1,446.71 $1,576.91 $1,718.83 $1,873.52 $2,042.14 Sewer Usage Rates ($/TGAL) 1
All Customers $9.60 $10.46 $11.40 $12.43 $13.55 $14.77
2 New rates implemented on the June 15th of the indicated year 1 Residential customers without separate irrigation meters will be charged based on the lesser of the estimated actual use and the actual water usage. All other customers will have sewer service charges based on the metered water consumption from all sources except those sources that are not discharged to the city sewer as determined by the City Engineer.

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Packet Pg. 611 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 25 Example of Sewer Bill Impacts with Year 1 Rates
Meter
Bimonthly
Sewer Use Current Proposed Change per Change per
Size (TGAL) Bill Bill Statement Month
Single Family
Low Use 3/4" 4 $120.63 $131.47 $10.84 $5.42
Average Use 3/4" 6 $139.83 $152.39 $12.56 $6.28
High Use 3/4" 16 $235.83 $256.99 $21.16 $10.58
Multifamily
Duplex (2 units) 3/4" 10 $178.23 $194.23 $16.00 $8.00
Apartment (8 units) 1.5" 20 $459.36 $500.62 $41.26 $20.63 Non-Residential
Retail 3/4" 4 $120.63 $131.47 $10.84 $5.42
Restaurant 1" 20 $327.45 $356.84 $29.39 $14.70
Hotel 2" 50 $906.26 $987.62 $81.36 $40.68

11.B.a
Packet Pg. 612 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 Survey
Combined monthly water & sewer bill for Single Family Homes assumes 3/4” meter, 5 TGAL of monthly water usage and 3 TGAL of sewage 26 11.B.a
Packet Pg. 613 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 27 1. Recommendations to City Council– (today)

2. Mail Prop 218 Notices – No later than April 22

3. Public Hearing– June 14

4. Implement Rates – June 15, 2022
Schedule

11.B.a
Packet Pg. 614 Attachment: 2022 Water/Sewer Rate Study Presentation (Water and Sewer Rate Study - Initiate Prop 218 DRAFT

NOTICE OF PUBLIC HEARING

ON PROPOSED NEW/INCREASED WATER AND SEWER RATES
WHERE: Cotati City Hall – Council Chamber and/or by Zoom 201 W. Sierra Avenue
Cotati, California
WHEN: Tuesday, June 14, 2022, not before 7:00 p.m. and as soon thereafter as the matter is reached on the agenda.

PURPOSE: To receive public comment on a proposal for the City Council to consider adopting new/increased water and sewer rates in the City Council Chamber at City Hall, 201 W.

Sierra Avenue, Cotati. At the public hearing, the City Council will accept oral and written testimony, as well as written protests, regarding the proposed water and sewer rates.

Why am I Receiving this Notice?
You are receiving this notice because our records indicate that you are listed as an account holder and/or as the owner of a parcel receiving water and/or sewer service from the City of Cotati (City). The purpose of this notice is to give you information about proposed new/increased water and sewer rates and how you can participate in the rate-setting process.

Rate History
The City of Cotati works each day with limited resources to ensure that residents and businesses receive clean, safe, and reliable water and sewer services, and that the City’s water and sewer systems are maintained to all required standards in order to protect our community’s health and safety, as well as the environment.

Past water rate adjustments have been sufficient to increase the City’s re-investment in critical water infrastructure. Recent increases in operating costs have surpassed previous forecasts, including increased cost of purchasing water from the Sonoma County Water Agency (SCWA), increases in PG&E rates, increases in contract/chemical costs, and new emergency operations costs associated with fire safety.

Similarly, past sewer rate adjustments have allowed the City to increase capital spending on aging infrastructure, however recent increases in operating costs have surpassed previous forecasts, including the cost of treating wastewater at the Santa Rosa Subregional System, increases in PG&E rates, increases in contract/chemical costs, and new emergency operations costs associated with fire safety.

City of Cotati
201 W. Sierra Ave.

Cotati, CA 94931
Phone: (707) 792-4600
Fax: (707) 795-7067
Visit us at: cotaticity.org
Email: [email protected]

11.B.b
Packet Pg. 615 Attachment: Draft Prop 218 Notice 4.8.22 (Water and Sewer Rate Study - Initiate Prop 218 Process) P a g e | 2
DRAFT
A water and sewer rate study, recently completed by the City, includes recommendations for adjusting the water and sewer rate schedules that are designed to provide necessary revenues to meet each utility’s needs to cover operating and maintenance costs, meet debt service obligations, and support the capital projects necessary to rehabilitate and upgrade the water and sewer systems, and maintaining prudent financial reserves.

Proposed Water Rates
The proposed water rates retain the same rate structure as the current water rates, including: (1) fixed bimonthly service charge based on the size of the water meter, (2) a three-tier water usage rate structure for single family customers, and (3) a uniform water usage rate for multi-family, non-residential, and irrigation accounts. The bi-monthly service charges recovers fixed customer and capacity-related costs of service, and the water usage rates recover costs appropriately recovered on the basis of water usage. The three-tier water usage rate structure for single family homes reflect costs differences in the City’s water supplies (i.e., local groundwater and SCWA water), as well as an allocation of water conservation costs to the higher tiers of usage. The water usage rate for multi-family, non-residential, and irrigation accounts recovers usagebased costs uniformly over all water usage. Proposed water rate schedules are presented in the table below.

Proposed Water Rates 2
Current 2022 2023 2024 2025 2026
Bi-Monthly Service Charge
3/4" meter $47.63 $50.49 $53.52 $56.73 $60.13 $63.74
1" meter $77.87 $82.54 $87.49 $92.74 $98.30 $104.20
1 1/2" meter $152.77 $161.94 $171.66 $181.96 $192.88 $204.45 2" meter $243.01 $257.59 $273.05 $289.43 $306.80 $325.21 3" meter $453.71 $480.93 $509.79 $540.38 $572.80 $607.17 4" meter $754.66 $799.94 $847.94 $898.82 $952.75 $1,009.92 Water Usage Rates ($/TGAL)
Residential
Tier 1 (0 to 10 TGAL)1$4.06 $4.30 $4.56 $4.83 $5.12 $5.43 Tier 2 (10 to 20 TGAL) $5.21 $5.52 $5.85 $6.20 $6.57 $6.96 Tier 3 (over 20 TGAL) $6.49 $6.88 $7.29 $7.73 $8.19 $8.68 Multi-Family, Non-Resid., & Irrigation
All Water Usage $4.51 $4.78 $5.07 $5.37 $5.69 $6.03
1 "TGAL" means thousand gallons
2 New rates implemented on the June 15th of the indicated year

11.B.b
Packet Pg. 616 Attachment: Draft Prop 218 Notice 4.8.22 (Water and Sewer Rate Study - Initiate Prop 218 Process) P a g e | 3
DRAFT
Proposed Sewer Rates
The proposed sewer rates retain the same rate structure as the current sewer rates, including: (1) fixed bimonthly service charge based on the size of the water meter, and (2) a uniform sewer usage rate for all customer accounts. The bi-monthly sewer service charges recover fixed customer and capacity-related costs of service, and the sewer usage rates recovers costs appropriately recovered on the basis of sewer flow. Proposed sewer rate schedules are presented in the table below.

Additional Information
Additional information on the proposed water and sewer rates, and the underlying financial and cost of service analyses, are available in the City of Cotati, Water and Sewer Rate Study – Final Report, prepared by Hildebrand Consulting, LLC., dated XXX, 2022 (2022 Rate Study). The report is available online at cotaticity.org.

How Much Will My Water and Sewer Bill Be?
While the water and sewer rates are increasing based on a simple percentage, actual changes to bills may be affected by changes in water usage. Bill changes for a typical customer over the five years of proposed rate adjustments are illustrated in the table below.

Proposed Sewer Rates 2
Current 2022 2023 2024 2025 2026
Bi-Monthly Service Charge
3/4" meter $82.23 $89.63 $97.70 $106.49 $116.07 $126.52 1" meter $135.45 $147.64 $160.93 $175.41 $191.20 $208.41 1 1/2" meter $267.36 $291.42 $317.65 $346.24 $377.40 $411.37 2" meter $426.26 $464.62 $506.44 $552.02 $601.70 $655.85 3" meter $797.31 $869.07 $947.29 $1,032.55 $1,125.48 $1,226.77 4" meter $1,327.26 $1,446.71 $1,576.91 $1,718.83 $1,873.52 $2,042.14 Sewer Usage Rates ($/TGAL) 1
All Customers $9.60 $10.46 $11.40 $12.43 $13.55 $14.77
2 New rates implemented on the June 15th of the indicated year 1 Residential customers without separate irrigation meters will be charged based on the lesser of the estimated actual use and the actual water usage. All other customers will have sewer service charges based on the metered water consumption from all sources except those sources that are not discharged to the city sewer as determined by the City Engineer.

11.B.b
Packet Pg. 617 Attachment: Draft Prop 218 Notice 4.8.22 (Water and Sewer Rate Study - Initiate Prop 218 Process) P a g e | 4
DRAFT
If you would like assistance in determining how the proposed water and sewer rates may affect your utility bill, please contact a Customer Service Representative at (707) 792-4600 Monday through Friday from 8:00 A.M. to 5:00 P.M
How Do I Protest?
Proposition 218 allows the owner of record of a parcel that receives water or sewer service to submit a written protest at or before the Public Hearing. A protest may be withdrawn before the close of the hearing as well, but only by the person who filed it.

If the person signing the protest is not listed as the owner on the last equalized assessment roll for Sonoma County, the protest must be accompanied by written evidence that the signer owns the property. In rental situations, if a tenant is the utility account holder for water or sewer service, the tenant also has the right to submit a written protest for the property. Only one protest per parcel will be counted. If valid protests are filed on behalf of a majority of the parcels that receive water or sewer service, the increased water or sewer rates, respectively, will not be adopted.

All protests must:

1. Be in writing with an original signature from the property owner of record or tenant directly liable for the payment of the fee/account holder.

2. Identify the parcel for which the protest is filed, by street address or Assessor’s Parcel Number (APN).

3. State that the signer opposes the proposed water and/or sewer rates.

4. Be received at City Hall at or before the close of the public hearing that will begin at 7:00 p.m. on June 14, 2022. A protest may be mailed to the City Clerk at 201 W. Sierra Avenue, Cotati, CA 94931 or delivered to the same address during regular business hours.

Email, fax, or telephone, and oral protests of any kind will not be counted. Mailed protests received after the close of the public hearing will not be counted, even if they were postmarked earlier.

If you have a disability and need assistance, please contact the City Clerk’s Office at (707) 792-4600 at least 72 hours prior to the meeting to ensure arrangements for accommodation by the City. Please make sure the City Clerk’s Office is notified as soon as possible is you have a visual impairment requiring meeting materials to be produced in another format (Braille, audio-tape, etc.).

Bi-Monthly Water and Sewer Bill for a Typical Single Family Customer 1 Current 2022 2023 2024 2025 2026
Water Bill $88.23 $93.49 $99.12 $105.03 $111.33 $118.04 Sewer Bill $139.83 $152.39 $166.10 $181.07 $197.37 $215.14 Total Bill $228.06 $245.88 $265.22 $286.10 $308.70 $333.18 Cost per Month $114.03 $122.94 $132.61 $143.05 $154.35 $166.59 1 Based on a 3/4" meter with 5,000 gal. of monthly water usage and 3,000 gal. of monthly sewage.

11.B.b
Packet Pg. 618 Attachment: Draft Prop 218 Notice 4.8.22 (Water and Sewer Rate Study - Initiate Prop 218 Process) P a g e | 5
DRAFT
If adopted, the new rates will be effective July 1, 2022. Under Government Code Section 53759(d), there is a 120-day statute of limitation for any challenge to the new, increased, or extended fee or charge.

Questions?
For more information or to ask questions, please call (707) 792-4600 Monday through Friday from 8:00 A.M. to 5:00 P.M or visit cotaticity.org.

11.B.b
Packet Pg. 619 Attachment: Draft Prop 218 Notice 4.8.22 (Water and Sewer Rate Study - Initiate Prop 218 Process) RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI ACCEPTING THE WATER AND SEWER RATE STUDY DATED MARCH 14, 2022, SETTING A PUBLIC HEARING FOR JUNE 14, 2022 AND AUTHORIZING STAFF TO INITIATE THE PROPOSITION 218 NOTICING PROCESS
WHEREAS, the City has not conducted a water and sewer rate study to adjust rates since March 2017, at which time the City established a series of rate adjustments to cover the cost of providing water and sewer service in Cotati; and
WHEREAS, it is industry practice to conduct a water and sewer rate study every few years to ensure the rates are sufficient to meet each utility’s financial and service obligations for ongoing operation and maintenance, debt service, and capital improvements while maintaining prudent reserves; and
WHEREAS, on December 14, 2021, the City Council authorized the City Manager to execute an agreement with Hildebrand Consulting to revise the City’s rate models to incorporate current and projected expenses in operating and maintaining the utilities; and WHEREAS, Hildebrand Consulting has revised the rate models and has completed a Water and Sewer Rate Study Draft Report (“Study”) based on the revised models; and WHEREAS, the Study recommends overall water and sewer rate adjustments as indicated in the attached report for June 15, 2022, and for each of the following four subsequent years on June 15: 2023, 2024, 2025, and 2026; and
WHEREAS, the Study recommends and provides justification for maintaining a threetier water usage rate structure for single family residential customers and a uniform water usage rate for multi-family, non-residential, and irrigation accounts; and WHEREAS, in 2017, the City adopted Water Shortage Surcharges to protect the Water Enterprise from the revenue volatility associated with droughts, and while the current Study does not propose to renew that policy, the City can re-establish the Water Shortage Surcharge during the next rate study; and
WHEREAS, the action of approving the Study and initiating the Proposition 218 process does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.

NOW THEREFORE BE IT RESOLVED THAT by the City of Cotati City Council:

1. All of the above recitals are true and correct.

2. The City Council accepts the attached Study.

3. The City Council directs staff to begin the Proposition 218 public noticing process for proposed water and sewer rate adjustments and to return on June 14, 2022, for a public hearing and consideration of the proposed water and sewer rates and temporary water shortage surcharges.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on the April 12th, 2022, by the following vote, to wit:

Approved:________________________________
Mayor
Packet Pg. 620
Attest:____________________________
Kevin Patterson, Deputy City Clerk
Approved as to form:
____________________________
City Attorney
Attachments:

Draft 2022 Water & Sewer Rate Study Report (DOCX)
Packet Pg. 621
20 22 Water & Sewer Rate Study
City of Cotati
Draft Report
March 14, 2022

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Packet Pg. 622 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) March 14, 2022
Mr. Craig Scott
Public Works Director / City Engineer
City of Cotati
201 West Sierra Ave.

Cotati, CA 94931
Re: DRAFT 2022 Water and Sewer Rate Study
Dear Mr. Scott,
Hildebrand Consulting is pleased to present this 2022 Water and Sewer Rate Study (Study) for the water and Sewer Enterprises that were performed for the City of Cotati.

We appreciate the fine assistance provided by you and all of the members of the City staff who participated in the Study.

If you or others at the City have any questions, please do not hesitate to contact me at:
[email protected]
(510) 316-0621
We appreciate the opportunity to be of service to the City and look forward to the possibility of doing so again in the near future.

Sincerely,
Mark Hildebrand
Hildebrand Consulting, LLC
Enclosure

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Packet Pg. 623 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Table of Contents
1 TABLE OF CONTENTS
INTRODUCTION AND SUMMARY ..........................................................2 WATER AND SEWER UTILITY BACKGROUND .............................................................................. 2 STUDY BACKGROUND........................................................................................................... 2 STUDY OBJECTIVES.............................................................................................................. 3 STUDY METHODOLOGY ......................................................................................................... 3 SUMMARY OF FINDINGS AND RECOMMENDATIONS ..................................................................... 4 WATER ENTERPRISE FINANCIAL PLAN .................................................6 WATER FUND STRUCTURE AND CASH FLOWS............................................................................ 6 WATER ENTERPRISE BEGINNING FUND BALANCES..................................................................... 8 CUSTOMER GROWTH............................................................................................................ 9 WATER ENTERPRISE RATE REVENUE ....................................................................................... 9 WATER ENTERPRISE NON-RATE REVENUES ........................................................................... 10 FUTURE WATER USAGE ...................................................................................................... 11 WATER ENTERPRISE OPERATING AND DEBT EXPENSES ............................................................ 12 COST ESCALATION............................................................................................................. 13 WATER ENTERPRISE CAPITAL IMPROVEMENT PROGRAM ........................................................... 13 WATER ENTERPRISE DEBT STRATEGY.................................................................................... 14 PROPOSED WATER RATE REVENUE INCREASES ....................................................................... 15 SEWER ENTERPRISE FINANCIAL PLAN ............................................... 18 SEWER FUND STRUCTURE AND CASH FLOWS .......................................................................... 18 SEWER FINANCIAL PLAN ASSUMPTIONS................................................................................. 20 SEWER ENTERPRISE BEGINNING FUND BALANCES................................................................... 20 CUSTOMER GROWTH.......................................................................................................... 21 SEWER ENTERPRISE RATE REVENUE ..................................................................................... 21 SEWER ENTERPRISE NON-RATE REVENUES............................................................................ 21 SEWER ENTERPRISE OPERATING AND DEBT EXPENSES........................................................... 22 SEWER UTILITY COST ESCALATION ....................................................................................... 24 SEWER ENTERPRISE CAPITAL IMPROVEMENT PROGRAM............................................................ 24 SEWER ENTERPRISE DEBT STRATEGY .................................................................................... 25 PROPOSED SEWER RATE REVENUE INCREASES ....................................................................... 25

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Packet Pg. 624 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Table of Contents
2 LIST OF TABLES
Table 1: Water Enterprise FY 2021/22 Beginning Cash Balance................................................... 9 Table 2: Sewer Enterprise FY 2021/22 Beginning Cash Balance ................................................ 21

LIST OF FIGURES
Figure 1: Water Enterprise Revenue Categories (FY 2021/22 budget)........................................ 11 Figure 2: Water Enterprise Operating & Debt Expenses (FY 2021/22) ........................................ 12 Figure 3: Water Enterprise historic and projected capital spending ......................................... 14 Figure 4: Water Enterprise Cash Flow Projection with Recommended Rate Increases & Debt Issues ............................................................................................................................................ 16 Figure 5: Sewer Enterprise Revenue Categories (FY 2021/22 budget) ....................................... 22 Figure 6: Sewer Enterprise Operating & Debt Expenses (FY 2021/22)........................................ 23 Figure 7: Sewer Enterprise historic and projected capital spending......................................... 25 Figure 8: Sewer Enterprise Cash Flow Projection with Recommended Rate Increases............ 26

LIST OF SCHEDULES
Schedule W-1 – Water Enterprise Budgeted & Projected Operating and Debt Expenses Schedule W-2 – Water Enterprise Capital Spending Request Schedule W-3 - Water Enterprise Cash Flow Pro Formas
Schedule W-4 – Water Enterprise 5-Year Schedule of Proposed Rates Schedule S-1 – Sewer Enterprise Budgeted & Projected Operating and Debt Expenses Schedule S-2 – Sewer Enterprise Capital Spending Request Schedule S-3 - Sewer Enterprise Cash Flow Pro Formas
Schedule S-4 – Sewer Enterprise 5-Year Schedule of Proposed Rates

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Packet Pg. 625 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Table of Contents
1 List of Acronyms
ADU accessory dwelling unit
AWWA American Water Works Association
CIP capital improvement program
COSA cost of service analysis
DCR debt service coverage ratio
DU dwelling unit
EOC emergency operations center
FY fiscal year (which ends on June 30 for the City)
O&M operations and maintenance
PayGo “pay as you go” (i.e., cash financing for capital projects) TGAL thousand gallons

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Packet Pg. 626 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Introduction
2 INTRODUCTION AND SUMMARY
Hildebrand Consulting has been retained by the City of Cotati (City) to conduct an update to the financial plans and utility rates for the City’s Water and Sewer Enterprises.

This report describes in detail the assumptions, procedures, and results of the Study, including conclusions and recommendations.

WATER AND SEWER UTILITY BACKGROUND
The City of Cotati is located in the County of Sonoma (County), approximately 8 miles south of the City of Santa Rosa. Cotati is within the nine-county San Francisco Bay Region. The City owns and operates a public drinking water system consisting of pipelines, wells, pumps, and tanks and is regulated by the State Water Resources Control Board Division of Drinking Water. In addition, the City owns and operates a public sewer collection system and sends wastewater to the City of Santa Rosa’s Regional Wastewater Treatment Plant for treatment and reuse.

STUDY BACKGROUND
In 2017, the City of Cotati retained The Reed Group to prepare ten-year water and Sewer Enterprise financial plans and cost of service analyses for the City’s water and sewer utilities (2017 Study1). Following that study, the City adopted new water and sewer rate schedules for a 5-year planning period through fiscal year 2021/22 (ending June 30, 2022).

In 2019, The Reed Group conducted an update to the Sewer Enterprise financial plan to ascertain whether a higher-than-expected cost for the Laguna Bypass Pipeline project (“P-1 project”) might impact the remaining years of the previously adopted 5-year 1 City of Cotati, Water and Sewer Rate Study – Final Report, June 20, 2017, prepared by The Reed Group.

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Packet Pg. 627 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Introduction
3 sewer rate plan. The financial plan update (dated April 15, 2019) found that an interfund loan would enable the existing sewer rate increases to be sufficient through fiscal year 2021/22.

In 2020, the City of Cotati retained Hildebrand Consulting (with The Reed Group as a subconsultant) to update both financial plans in order to ascertain whether the recommendations from the 2017 Water Enterprise financial plan and 2019 Sewer Enterprise update both remained valid. The 2020 update confirmed the sufficiency of the existing 5-year rate schedule, therefore no new changes to the 5-year rate schedule was made at that time.

STUDY OBJECTIVES
The purpose of this Study is to develop new 10-year projections of operating and capital expenses in order to create financial plans, including new 5-year rate schedules, which will generate sufficient revenue to meet each Enterprise’s financial and service obligations for ongoing operation and maintenance, debt service, and capital improvements while maintaining prudent reserves.

STUDY METHODOLOGY
This Study applied methodologies that are aligned with industry standard practices for rate setting as laid out in the AWWA M1 Manual, and applicable law, including California Constitution Article XIII D, Section 6(b), commonly known as Proposition 218.

The Study began with a review of both utility enterprises’ current financial dynamics and latest available data for the utilities’ operations. Multi-year financial management plans were then developed to determine the level of annual rate revenue required to cover projected annual operating expenses, debt service (including coverage targets), and capital cost requirements while maintaining adequate reserves. This portion of the Study was conducted using MS Excel©-based financial planning models which were customized to reflect financial dynamics and latest available data for the City’s

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Packet Pg. 628 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Introduction
4 operations in order to develop a long-term financial management plan, inclusive of projected annual revenue requirements and corresponding annual rate adjustments.

While this Study did not include an update to the cost-of-service analysis (COSA), a comprehensive COSA was completed as part of the 2017 Study. We understand that the 2017 COSA was conducted based upon principles outlined by the AWWA, legal requirements (i.e., Proposition 218) and other generally accepted industry practices to develop rates that reflect the cost of providing service.

SUMMARY OF FINDINGS AND RECOMMENDATIONS
This Study found that most financial projections from the 2017 Study are relatively consistent with the actual expenses from the past 5 years and the projected expenses for the next 5 years. Some operating costs did increase more than anticipated by the 2017 Study, such as water purchase rates from Sonoma Water (which are expected to increase another 6.2 percent in FY 2023), utility costs, additional emergency operations costs, and increases in contract service costs. Despite these unexpected increases in costs, the Water Enterprise analysis has identified a financial strategy (that involves a near-term loan of $927 thousand) that will limit water rate revenue increases. These rate increases are consistent with the rate increases that were projected for this period by the 2017 Study.

The Sewer Enterprise has experienced substantial increases in operating costs, primarily driven by increases in Subregional costs (wastewater treatment services) which increased significantly in 2019 when a new meter for measuring sewage sent to the Subregional wastewater treatment plant found significantly higher flows (35 percent higher) than historical readings. In addition to the higher wastewater flow readings, Subregional costs have been escalating, and are expected to continue escalating, as high as 6.8 percent per year (the 2017 Study had assumed annual cost escalation of 5 percent for Subregional costs). The Sewer Enterprise analysis has identified a financial strategy (that involves receiving a balloon payment from the

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Packet Pg. 629 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Introduction
5 Water Enterprise for an existing internal loan as well as taking a $750 thousand loan from the general fund).

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Packet Pg. 630 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 6 WATER ENTERPRISE FINANCIAL PLAN
This section presents the financial plan for the City’s Water Enterprise, including a description of the source data, assumptions, and City’s financial policies. The City has provided recent actual spending data and budgeted financial information associated with operation of the Water Enterprise, including recent actual operating costs, budgeted operating costs, a multi-year capital improvement program (CIP), and outstanding debt service obligations. City staff also assisted in providing other assumptions and policies, such as reserve targets and escalation rates for operating costs (all of which are described in the following subsections).

The Water Enterprise’s rate revenue requirement is the amount of revenue needed from water rates to cover planned operating, maintenance, debt service, and capital program costs with consideration of other revenues and financial reserves.

The Water Enterprise 10-year Financial Plan was developed through several interactive work sessions with City staff. As a result of this process, the Study has produced a robust Financial Plan that will enable the City to meet its future revenue requirements and achieve financial performance objectives throughout the projection period while striving to limit rate increases.

WATER FUND STRUCTURE AND CASH FLOWS
The financial plan is an annual cash flow model. As a cash flow model, it differs from standard accounting income statements, and balance sheets. The financial plan models sources and uses of funds into, out of, and between the various funds and reserves of the Water Enterprise.

The financial plan model is based on the fund structures currently used by the City and incorporates reserve policies for specified purposes. The reserve structure includes an Operating Reserve within the Water Operating Funds (Fund 401) and the Water Capital

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Packet Pg. 631 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 7 Fund (Fund 402) for the purpose of meeting water system capital improvement needs.

Exhibit 1 includes a schematic diagram of the funds/reserves and major cash flows associated with the Water Enterprise financial plan model.

An understanding of the fund/reserve structure is helpful in understanding the financial plan worksheets that model estimated annual cash flows through the Water Enterprise from one year to the next. The fund/reserve structure is comprised of:

2.1.1 Water Operating Fund (Fund 401)
The Operating Fund is the primary fund within the Enterprise. Most of the Water Enterprise’s revenues, including user rate revenues, flow into the Operating Fund and all operating and maintenance costs, including debt service payments, are paid out of this fund. Funds are also transferred from the Water Operating Fund to the Water Capital Fund to help pay for capital projects of the capital improvement program.

Water Operating Reserves – The 2017 Study recommended that the City establish and maintain Water Operating Reserves equal to 33 percent of annual operating and maintenance costs, including debt service. The purpose of the Operating Reserve is to provide working capital and funds for unplanned operating and maintenance expenditures. The balance in the Water Operating Fund at the beginning of fiscal year (FY) 2021/22 was about $1,170,000, or about $475,000 above the target Operating Reserve.

Available Balance – The balance in the Operating Fund in excess of the target amount for the Operating Reserve is shown in the financial plan as “Available Balance”. After all other obligations are met, the Available Balance is used to offset rate increases. The financial plan models generally seek to reduce any Available Balance over time. A negative value for the Available Fund Balance indicates shortfalls in maintaining the minimum Operating Reserve.

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Packet Pg. 632 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 8 Exhibit 1 – Water Enterprise – Schematic Diagram of Cash Flows

2.1.2 Water Capital Fund (Fund 402)
The Water Capital Fund is used to account for revenues and funds available for capital project expenditures. Connection fees, paid by new development, are available to improve system capacity and help meets the capacity needs of new development.

Transfers from the Operating Fund provide funds intended to rehabilitate and upgrade system capacity. The financial plan models generally seek to maintain a positive balance in the capital funds while also covering the costs of planned capital improvement projects. This is achieved through annual transfers of funds from the operating fund to the capital fund of each utility.

WATER ENTERPRISE BEGINNING FUND BALANCES
The ending cash balance for FY 2020/21 was used to establish the FY 2021/22 beginning balance, as outlined in Table 1. It should be noted that the amount of cash that the Water Enterprise keeps in reserves is a product of its reserve policies (see Section 2.1).

Operations& Maintenance
Water Rate Revenue
Interest Earnings
Impact Fees
Debt Proceeds
Operating Fund (401)
Operating Reserve Debt Service
Capital Projects
Water Capital Fund (402)
Capital Reserve
Impact Fee Reserve Interest Earnings
Other Revenue

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Packet Pg. 633 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 9 Table 1: Water Enterprise FY 2021/22 Beginning Cash Balance

CUSTOMER GROWTH
Growth in the customer base affects both water demand as well as Impact Fee revenue.

Estimated annual Impact Fee revenues are based on the applicable fees and the amount of new development activity. Impact Fee revenue accrues to the respective capital fund and is used to help fund planned capital improvement projects.

In recent years, developer impact fee2revenues indicate that the City has grown at a rate between 0.3 percent and 1.4 percent. Future growth will depend on many factors, including the economy. Based on direction from City staff, this Study assumes that the annual growth rate will average 0.45 percent for the next 10 years. This conservative assumption is due, in part, to the unknown impacts that the current Covid-19 pandemic may have on the economy.

WATER ENTERPRISE RATE REVENUE
Rate revenue is the revenue generated from customers for water service. The City collects rate revenue from water customers based on a fixed bimonthly “Service Charge” (assessed based on meter size) and a water “Usage Rate” (applied to each thousand gallons (“TGAL”) of water use). Customers receive a bimonthly bill. 2 Development Impact Fees are one-time charges to new development to pay for capacity in the utility systems.

Water Operating Reserve $1,172,000
Water Capital Reserve $832,000
Total Water Reserves: $2,004,000

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Packet Pg. 634 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 10 The Water Enterprise Financial Plan starts with FY 2021/22 budgeted rate revenues.

Estimated future water demand and rate revenues include the small amount of customer growth (see Section 2.3) as well as the annual rate revenue adjustments proposed by this Study. Other than demand increases associated with customer growth, water demand is anticipated to remain constant. Budgeted and projected rate revenues (including proposed rate adjustments) are listed in the first table in Schedule W-3.

WATER ENTERPRISE NON-RATE REVENUES
In addition to rate revenue, the City receives additional “non-rate revenue” from sources such as miscellaneous service fees, developer Impact Fees, occasional grants, and interest revenue on investments. Projections of miscellaneous fee revenues were based on FY 2021/22 budgeted revenues. Future interest income was estimated based upon projected fund balances and assumed interest rate of 0.94 percent, which is consistent with the City’s historical interest earnings relative to its total reserve levels.

Interest accrues to each of the funds.

Estimated future annual Impact Fee revenues were based on the applicable fees and the amount of new development activity. Impact Fee revenue accrues to the Water Capital Fund and is used to help fund planned capital improvement projects.

Budgeted water rate and non-rate revenues are depicted in Figure 1 below and listed in detail in the first table in Schedule W-3.

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Packet Pg. 635 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 11 Figure 1: Water Enterprise Revenue Categories (FY 2021/22 budget)

FUTURE WATER USAGE
Water usage is integral to Water Enterprise finances since more than 57 percent of rate revenue is derived from the variable Usage Rate. Much like the 2017 Study was conducted on the heels of a historic drought, the City is currently experiencing a severe drought. Water usage in the second half of calendar year 2021 was measurably lower than the two proceeding years, which has affected recent water rate revenue. That being said, given the fact that it is impossible to accurately predict whether the drought will persist, worsen, or improve, this Study does not attempt to predict future water usage trends. Rather, this Water Enterprise financial plan uses FY 2020/21 actual rate revenue as the basis for future rate revenue (note that FY 2020/21 was a relatively “normal” water usage period). In 2017 the City adopted Water Shortage Surcharges as a means to protecting the Water Enterprise from the revenue volatility associated with droughts. While the current study does not propose to renew that policy, the City may wish to consider re-establishing Water Shortage Surcharges during the next rate study.

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Packet Pg. 636 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 12 WATER ENTERPRISE OPERATING AND DEBT EXPENSES
The Water Enterprise’s expenses include operating and maintenance expenses, debt service, and capital spending. Capital spending is addressed separately in Section 2.9.

Future operating and maintenance expenses were projected based upon the budgeted expenditures from FY 2021/22 and adjusted for inflation (see Section 2.8).

Major budgeted expense categories for FY 2021/22 are depicted in Figure 2. The Water Enterprise does not have any existing “outside” debt but is currently repaying a loan to the Sewer Fund.

Budgeted and projected operating and maintenance costs as well as debt service expenses are listed in detail in Schedule W-1.

Figure 2: Water Enterprise Operating & Debt Expenses (FY 2021/22)

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Packet Pg. 637 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 13 COST ESCALATION
Annual cost escalation factors for the various types of expenses were developed based upon a review of historical inflation trends, published inflation forecasts, industry experience, and discussions with City staff. During the projection period, most operating expenses are projected to increase at 3.0 percent per year. As an exception, the cost of purchasing imported water from Sonoma Water has been forecasted to increase by 6.16 percent in FY 2022/23 and 6.0 percent thereafter. These inflation assumptions were provided by City staff, are consistent with the assumptions used by other regional utilities and are reasonable for financial planning purposes.

WATER ENTERPRISE CAPITAL IMPROVEMENT PROGRAM
Figure 3 shows that from FY 2018/19 to FY 2021/22 the City has spent very little in capital projects to rehabilitate or improve the water system. Starting in FY 2022/23, the City plans to increase its annual capital spending significantly in order to pro-actively address the water system’s rehabilitation needs associated with treatment facilities, pipes, water tanks, and other system facilities. Most significantly, the City plans to replace and upgrade the existing Cypress Storage Tank in FY2027/28 (at a cost of approximately $2.3 million in 2022 dollars). This will increase annual capital spending from nearly zero in recent years to an average of almost $800 thousand per year over the next 5 years. A detailed list of the requested capital projects and associated costs is provided in Schedule W-2.

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Packet Pg. 638 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 14 Figure 3: Water Enterprise historic and projected capital spending

WATER ENTERPRISE DEBT STRATEGY
As previously mentioned, the only Water Enterprise debt obligation is an internal loan from the Sewer Fund, which was originally meant to be paid off by 2030 at an interest rate of 1.5 percent. Given the Sewer Enterprise’s need for near-term cash (see Section 3), this Study recommends that the Water Enterprise settle that debt with the Sewer Fund in FY 2022/23. This balloon payment, however, will create a near-term cash deficit for the Water Fund. As such, this Study recommends that the Water Enterprise borrow $927 thousand (borrowing source yet to be identified) to help finance the Water Enterprise’s near-term capital projects.

In addition to this new loan, it will be necessary to issue new debt to fund the New Cypress Storage Tank project (project T-1), the Cypress Tank Booster Tanks (project BP1), and the Cypress Tank New Water Main (project P-3) in 2028. The total debt issue is expected to be $3.4 million (after cost escalation, issuance costs, etc.) and assumed have an interest rate of 2.0 percent (per City staff) and repayment period of 20 years.

The form of debt (bond, bank note, subsidized loan, etc.) has not yet been identified.

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Packet Pg. 639 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 15 One of the requirements associated with debt financing is to maintain rates and other water system revenues at levels sufficient to meet debt service coverage requirements (DCR). Water system net revenues (i.e., revenues after paying all operating costs) must be maintained at a DCR level that is at least 1.20 times annual debt service. Based on published guidance from Fitch Ratings, utility systems with midrange financial profiles should maintain a DCR greater than 1.50 times annual debt service. The Water Enterprise doesn’t currently have a formal DCR since its only debt is an internal loan (which is treated as an operating expense for purposes of calculating DCR). Schedule W-3 shows that the proposed financial plan maintains a DCR of at least 1.90 (and usually higher).

PROPOSED WATER RATE REVENUE INCREASES
All of the above information was entered into a financial planning model to produce a 10-year projection of the sufficiency of current rate revenues to meet projected financial requirements and determine the level of rate revenue increases necessary in each year of the projection period.

Based upon the previously discussed financial data, assumptions, policies, and debt strategy, this Study proposes a 5-year schedule of annual rate adjustments as shown in Figure 4. The rate schedules associated with these rate adjustments have been provided As Schedule W-4.

The numbers provided in the first table in Schedule W-3 (cash flow proforma for the Water Operating Fund) are summarized graphically in Figure 4, which shows the Operating Fund target reserves being met through-out the planning period. Schedule W-3 shows the cash flow with each of the Water Enterprise’s funds and the projected transfers between the Water Operating Fund and the Water Capital Fund.

After the final recommended increase in FY 2026/27, it is anticipated (barring unforeseen emergencies or changes in infrastructure/operational needs) that the rate revenue increases will need to continue as shown in Schedule W-3. These levelized rate

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Packet Pg. 640 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 16 increases will ultimately allow the Water Enterprise to cash-finance its capital program rather than seek internal and external loans.

Figure 4: Water Enterprise Cash Flow Projection with Recommended Rate Increases & Debt Issues
In addition to general inflation which results in higher costs every year, the following summarizes the changes in costs facing the Water Enterprise that weren’t fully accounted for during the 2017 Study:
• The cost of purchasing imported water from Sonoma Water is forecasted to increase by 6 percent per year. These costs represent approximately 1/4 of the water utility operating budget.
• Additional operating cost have been identified associated with the new emergency operations center (EOC) and vehicle replacements. • Utility costs have increased significantly in part due to increases in PG&E rates and in part due to an increase in groundwater pumping.
• The on-going Covid-19 pandemic has had an unprecedented impact to the economy, affecting both inflation as well as water sales.

FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Rate Revenue Increase: 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 4.0% 4.0% 4.0% Debt Coverage Ratio: na na na na na na 2.12 2.25 2.40 3.22 Proposed Forecasted
$0
$1
$2
$3
$4 MILLIONS
Combined Ending Fund Balance
Target Reserve Level
Minimum Reserve Levels
$0
$1
$1
$2
$2
$3
$3
$4
$4
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Total Revenue / Expenses ($M) Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Cash Capital Revenues Expenses

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Packet Pg. 641 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Water Financial Plan 17 It is recommended that the City continue to closely monitor the financial condition of the water utility on an annual basis. In particular, the City should track changes in economic conditions due to the Covid-19 pandemic, in rate revenue due to drought, in water purchase costs from Sonoma Water, or in development activity.

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Packet Pg. 642 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 18 SEWER ENTERPRISE FINANCIAL PLAN
This section presents the 2022 Financial Plan for the City’s Sewer Enterprise, including a description of the source data, assumptions, and City’s financial policies. The City has provided Sewer Enterprise actual spending data for FY 2020/21 and budgeted financial information for FY 2021/22, including recent actual operating costs, budgeted operating costs, and a multi-year CIP. City staff also assisted in confirming other assumptions and policies, such as reserve targets and escalation rates for operating costs (all of which are described in the following subsections).

The Sewer Enterprise’s rate revenue requirement is the amount of revenue needed from sewer rates to cover planned operating, maintenance, debt service, and capital program costs with consideration of other revenues and financial reserves.

SEWER FUND STRUCTURE AND CASH FLOWS
The financial plan is an annual cash flow model. As a cash flow model, it differs from standard accounting income statements, and balance sheets. The financial plan models sources and uses of funds into, out of, and between the various funds and reserves of the sewer utility.

The financial plan model is based on the fund structures currently used by the City and incorporates reserve policies for specified purposes. The reserve structure includes an Operating Reserve within the Sewer Operating Funds (Fund 404), as well as the Sewer Capital Funds (Fund 405) for the purpose of meeting sewer system capital improvement needs of the capital program. Exhibit 2 includes a schematic diagram of the funds/reserves and major cash flows associated with the Sewer Enterprise financial plan model.

An understanding of the fund/reserve structure is helpful in understanding the financial plan worksheets that model estimated annual cash flows through the sewer utility from one year to the next. The fund/reserve structure is comprised of:

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Packet Pg. 643 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 19 3.1.1 Sewer Operating Fund (Fund 404)
The Operating Fund is the primary fund within the utility. Most of the Sewer Enterprise’s revenues, including user rate revenues, flow into the Operating Fund and all operating and maintenance costs, including debt service payments, are paid out of this fund. Funds are also transferred from the Sewer Operating Fund to the Sewer Capital Fund to help pay for capital projects of the capital improvement program.

Sewer Operating Reserves – The 2017 Study recommended that the City establish and maintain Sewer Operating Reserves equal to 33 percent of annual operating and maintenance costs, including debt service (a target of about $1.0 million for FY 2021/22). The purpose of the Operating Reserve is to provide working capital and funds for unplanned operating and maintenance expenditures. The balance in the Sewer Operating Fund at the beginning of the current fiscal year (FY 2021/22) was about $3,155,000, or about $2.15 million above the target Operating Reserve.

Available Balance – As explained in Section 2.1.1, the balance in the Operating Fund in excess of the target amount for the Operating Reserve is shown in the financial plan as “Available Balance.”
Exhibit 2 – Sewer Enterprise – Schematic Diagram of Cash Flows Operations& Maintenance
Sewer Service Charges
Interest Earnings
Impact Fees
Debt Proceeds
Operating Fund (404)
Operating Reserve Debt Service
Capital Projects
SewerCapital Fund (405)
Capital Reserve
Impact Fee Reserve
Interest Earnings
Other Revenue

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Packet Pg. 644 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 20 3.1.2 Sewer Capital Fund (Fund 405)
The Sewer Capital Fund is used to account for revenues and funds available for capital project expenditures. Impact fees, paid by new development, are available to improve system capacity and help meets the capacity needs of new development. Transfers from the Operating Fund provide funds intended to rehabilitate and upgrade system capacity. The financial plan models generally seek to maintain a positive balance in the capital funds while also covering the costs of planned capital improvement projects. This is achieved through annual transfers of funds from the operating fund to the capital fund of each utility. A portion of Sewer Impact Fee revenues is transferred from the Sewer Capital Fund to the Sewer Operating Fund to help pay Subregional debt service.

SEWER FINANCIAL PLAN ASSUMPTIONS
This update to the Sewer Enterprisefinancial plan reflects the FY 2021/22 budget and financial conditions as of the beginning of the fiscal year. The financial plan also reflects the Sewer Enterprise’s debt service obligations and capital improvement program, as identified by City staff, during the planning period that extends through FY 2031/32.

The process used to update the financial plan involved estimating future revenues and expenditures based on estimates of future conditions using the FY 2021/22 budget, existing debt service schedules and a capital improvement plan provided by City staff. The financial plan is based on the best available information and reasonable assumptions; future estimates have been reviewed with staff and are believed to be reasonable.

SEWER ENTERPRISE BEGINNING FUND BALANCES
The ending cash balance for FY 2020/21 was used to establish the FY 2021/22 beginning balance, as shown in Table 2. It should be noted that the amount of cash that the Sewer Enterprise keeps in reserves is a product of its reserve policies (see Section 3.1).

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Packet Pg. 645 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 21 Table 2: Sewer Enterprise FY 2021/22 Beginning Cash Balance

CUSTOMER GROWTH
As explained in more detail in Section 2.3, this Study assumes that the annual growth rate will average 0.45 percent for the next 10 years.

SEWER ENTERPRISE RATE REVENUE
Rate revenue is the revenue generated from customers for sewer service. The City collects rate revenue from sewer customers based on a fixed bimonthly “Service Charge” (assessed based on meter size) and a sewer “Usage Rate” (applied to each TGAL) of water use).

Residential customers without separate irrigation meters will be charged based on the lesser of the estimated actual use and the actual water usage. All other customers will have sewer service charges based on the metered water consumption from all sources except those sources that are not discharged to the city sewer as determined by the City Engineer.

Customers receive a bimonthly bill.

The Sewer Enterprise Financial Plan starts with FY 2021/22 budgeted rate revenues. Estimated future sewer production and rate revenues includethe small amount of customer growth (see Section 3.4) as well as the annual rate revenue adjustments proposed by this Study. Other than demand increases associated with customer growth, sewer production is anticipated to remain constant. Budgeted and projected rate revenues (including proposed rate adjustments) are listed in the first table in Schedule S-3.

SEWER ENTERPRISE NON-RATE REVENUES
In addition to rate revenue, the City receives additional “non-rate revenue” from sources such as miscellaneous service fees, developer Impact Fees, occasional grants, and interest revenue Sewer Operating Reserve $3,155,000
Sewer Capital Reserve $286,000
Total Sewer Reserves: $3,441,000

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Packet Pg. 646 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 22 on investments. Projections of miscellaneous fee revenues were based on FY 2021/22 budgeted revenues. Future interest income was estimated based upon projected fund balances and assumed interest rate of 0.94 percent, which is consistent with the City’s historical interest earnings relative to its total reserve levels. Interest accrues to each of the funds.

Estimated future annual Impact Fee revenues were based on the applicable fees and the amount of new development activity. Impact Fee revenue accrues to the Sewer Capital Fund and is used to help fund planned capital improvement projects.

Budgeted sewerrate and non-rate revenues are depicted in Figure 5 below and listed in detail in the first table in Schedule S-3.

Figure 5: Sewer Enterprise Revenue Categories (FY 2021/22 budget)

SEWER ENTERPRISE OPERATING AND DEBT EXPENSES
The Sewer Enterprise’s expenses include operating and maintenance expenses, debt service (for an internal loan), and capital spending. Capital spending is addressed separately in

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Packet Pg. 647 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 23 Section 3.9. Future operating and maintenance expenses were projected based upon the budgeted expenditures from FY 2021/22 and adjusted for inflation (see Section 3.8). A significant portion of the operating costs are driven by Subregional costs, which have been increasing significantly and are expected to continue to increase (see Section 3.8). Additional costs that were not considered during the 2019 financial plan update include vehicle replacement costs and emergency operations center (EOC) costs.

The Sewer fund’s current debt obligations consist of an internal loan from the In-Lieu Housing Fund ($1 million over 20 years at 3 percent for the P-1 project) and the Sewer fund’s responsible to pay a portion of Santa Rosa Subregional system debt. At present, Cotati’s share of annual Subregional debt service is about $867,000. For purposes of calculating debt coverage ratio, all of the above debt obligations are treated as operating costs.

Major budgeted expense categories for FY 2021/22 are depicted in Figure 6. Budgeted and projected operating and maintenance costs as well as debt service expenses are listed in detail in Schedule S-1.

Figure 6: Sewer Enterprise Operating & Debt Expenses (FY 2021/22)

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Packet Pg. 648 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 24 SEWER UTILITY COST ESCALATION
Annual cost escalation factors for the various types of expenses were developed based upon a review of historical inflation trends, published inflation forecasts, industry experience, and discussions with City staff. During the projection period, most operating expenses are projected to increase at 3.0 percent per year. As an exception, the Subregional wastewater treatment costs have been forecasted to increase by 6.8 percent in FY 2022/23, 6.0 percent for the subsequent three years, and 5.0 percent thereafter. The City receives wastewater treatment and disposal service from the City of Santa Rosa’s “Subregional” wastewater treatment system. The Subregional costs include components for operation and maintenance, debt service, and cash-funded capital improvements. A new sewer meter (installed in 2018) which measures the City’s wastewater flow to the Subregional system has registered flow rates that are about 35% higher than was assumed during the 2017 Study. This has resulted in an additional increase in operating and maintenance (O&M) charges from the Subregional system for wastewater treatment and disposal (in addition to the increase in Subregional rates).

These inflation assumptions were provided by City staff, are consistent with the assumptions used by other regional utilities and are reasonable for financial planning purposes.

SEWER ENTERPRISE CAPITAL IMPROVEMENT PROGRAM
Figure 7 shows that from FY 2018/19 to FY 2021/22 the City has spent an average of about $300 thousand per year for capital projects to rehabilitate or improve the sewer system. The forecasted average from FY 2022/23 through FY 2031/32 is a moderate increase to $400 thousand per year. This increase in annual capital spending is intended to progressively increase the City’s re-investment in sewer system infrastructure. While the annual capital spending needs are forecasted to be “lumpy,” the spending is relatively smoothed out across the 10 year planning period. A detailed list of the requested capital projects and associated costs is provided in Schedule S-2.

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Packet Pg. 649 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 25 Figure 7: Sewer Enterprise historic and projected capital spending

SEWER ENTERPRISE DEBT STRATEGY
The Sewer Enterprise is facing a small “spike” in capital spending in FY2022/23. As such, this financial plan proposes to borrow $750 thousand from the general fund to be repaid over a 20 year period at an interest rate of 2.0 percent (based on the current interest rate of 1.9 percent for LAIF).

PROPOSED SEWER RATE REVENUE INCREASES
All of the above information was entered into a financial planning model to produce a 10-year projection of the sufficiency of current rate revenues to meet projected financial requirements and determine the level of rate revenue increases necessary in each year of the projection period.

Based on the previously discussed financial data, assumptions, policies, and PayGo strategy, this Study proposes a 5-year schedule of annual rate adjustments as shown in Schedule S-4.

The numbers provided in the first table in Schedule S-3 (cash flow proforma for the Sewer Operating Fund) are summarized graphically in Figure 8, which shows the Operating Fund target reserves being met through-out the planning period. Schedule S-3 shows the cash flow

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Packet Pg. 650 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 26 with each of the Sewer Enterprise’s funds and the projected transfers between the Sewer Operating Fund and the Sewer Capital Fund.

Figure 8 shows that the beginning combined cash balance in the Sewer Operating Fund and Sewer Capital Fund at the beginning of FY 2021/22 was more than twice the target levels, but those reserves are declining rapidly over the next couple years as Subregional costs increase and capital spending increases.

Figure 8: Sewer Enterprise Cash Flow Projection with Recommended Rate Increases
It is important to note that the 2017 Study had already anticipated that rate increases during the next 5 years would need to be about 6 percent. The following describes some of the changes in costs facing the Sewer Enterprise that weren’t fully accounted for during the 2017 Study:

FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Rate Revenue Increase: 9.0% 9.0% 9.0% 9.0% 9.0% 5.0% 5.0% 4.0% 4.0% 4.0% Proposed Forecasted
$0
$1
$2
$3
$4 MILLIONS
Combined Ending Fund Balance Target Reserve Level
$0
$1
$2
$3
$4
$5
$6
$7
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Total Revenue / Expenses ($M) Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Cash Capital Expenses Revenues

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Packet Pg. 651 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Sewer Financial Plan 27 • The costs of Subregional wastewater treatment have materially increased recently due to both a new (2018) sewer flow meter which attributes more flows to Cotati as well as higher-than-forecasted annual rate increases
• The Subregional rates are expected to continue to increase at a rate that is higher than was anticipated by the 2017 rate study (see Section 3.8). • Additional operating cost have been identified associated with the new emergency operations center (EOC) and vehicle replacements.
• The on-going Covid-19 pandemic has had an unprecedented impact to the economy, affecting both inflation as well as water sales.

Schedule S-3 shows the cash flow with each of the Sewer Enterprise’s fund and the projected transfers between the Sewer Operating Fund and the Sewer Capital Fund.

It is recommended that the City continue to closely monitor the financial condition of the sewer utility on an annual basis. In particular, changes in sewer rate revenues due to fallout from the Covid-19 pandemic or changes in Subregional costs could alter the utility’s financial situation.

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Packet Pg. 652 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 SCHEDULES
_____________________________________________________
Schedule W-1: Water Enterprise Projected Operating and Debt Expenses Schedule W-2: Water Utility Capital Spending Request
Schedule W-3: Water Utility Cash Flow Pro Formas
Schedule W-4: 5-Year Schedule of Proposed Water Rates
Schedule S-1: Sewer Enterprise Projected Operating and Debt Expenses Schedule S-2: Sewer Enterprise Capital Spending Request Schedule S-3: Sewer Enterprise Cash Flow Pro Formas
Schedule S-4: 5-Year Schedule of Proposed Sewer Rates

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Packet Pg. 653 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 W1-1
Schedule W-1 – Water Operating Fund Budgeted and Projected Operating and Debt Expense FY2022/23 FY2023/24 FY2024/25 FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 FY2031/32 1 Wages and Salaries $418,300 $430,800 $443,700 $457,000 $470,700 $484,900 $499,400 $514,400 $529,800 $545,700 2 Incentives 11,400 11,800 12,100 12,500 12,900 13,300 13,700 14,100 14,500 14,900 3 Fringe Benefits 3,200 3,300 3,400 3,500 3,700 3,800 3,900 4,000 4,100 4,200 4 Leave 62,100 64,000 65,900 67,900 69,900 72,000 74,200 76,400 78,700 81,100 5 Deductions 146,300 55,700 57,400 59,100 60,900 62,700 64,600 66,600 68,600 70,600 6 Insurance 123,300 127,000 130,800 134,700 138,800 142,900 147,200 151,600 156,200 160,900 7 Tax 7,300 7,500 7,700 8,000 8,200 8,400 8,700 9,000 9,200 9,500 8 Payouts 18,700 19,300 19,800 20,400 21,100 21,700 22,300 23,000 23,700 24,400 9 Materials and Supplies 22,700 23,300 24,000 24,800 25,500 26,300 27,100 27,900 28,700 29,600 10 Contract Supplies 151,400 155,900 160,600 165,400 170,400 175,500 180,700 186,200 191,800 197,500 11 Legal 20,000 20,600 21,200 21,800 22,500 23,200 23,900 24,600 25,300 26,100 12 Utlities 154,500 107,800 111,000 114,300 117,800 121,300 124,900 128,700 132,500 136,500 13 Repair and Maintenance 76,700 79,000 81,400 83,900 86,400 89,000 91,600 94,400 97,200 100,100 14 Other Expenses 146,500 150,900 155,400 160,100 164,900 169,800 174,900 180,200 185,600 191,100 15 Enterprise 61,000 62,900 64,700 66,700 68,700 70,700 72,900 75,100 77,300 79,600 16 Emergency Operations 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 17 Sonoma Water Purchases 546,200 772,000 818,300 867,400 919,400 974,600 1,033,000 1,095,000 1,160,700 1,230,400 18 Interfund Loan Payments to Sewer 502,000 0 0 0 0 0 0 0 0 0 19 CalPERS Payment Plan 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 80,000 20 New Internal Loan Repayment 0 0 61,000 61,000 61,000 61,000 61,000 61,000 61,000 61,000 21 New Debt Service 0 0 0 0 0 0 209,000 209,000 209,000 209,000 Total $2,561,600 $2,181,800 $2,328,400 $2,418,500 $2,512,800 $2,611,100 $2,923,000 $3,031,200 $3,143,900 $3,262,200

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Packet Pg. 654 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 W2-1
Schedule W-2 – Water Enterprise Capital Spending Projections Year Project Name Cost *
2023 Well 1A/3 Treatment Facilities Rehabilitation $115,000 2023 P-1: Portal Street, Mercantile, Aaron Main Replacement $608,900 2023 SCADA $130,000
2024 P-5: Sycamore Lane Water Main Replacement $155,600 2025 West Sierra Tank Recoating $722,500
2026 Distribution System Monitoring $119,000
2028 P-3, 4: Cypress Tank New Water Main $552,000
2028 T-1: New Cypress Storage Tank $2,320,000
2028 BP-1: Cypress Tank Booster Pumps $609,000
Total: $5,332,000
* Expressed in 2022 dollars

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Packet Pg. 655 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Process) City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 W3-1
Schedule W-3 – Water Enterprise Cash Flow Pro Formas (1 of 2) WATER OPERATING FUND (Fund 401)
Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 1 Rate Revenue Increase: 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 4.00% 4.00% 4.00% Rate Revenue
2 Water Rate Revenue $2,025,000 $2,025,000 $2,156,000 $2,295,000 $2,443,000 $2,601,000 $2,769,000 $2,947,000 $3,137,000 $3,276,000 $3,553,000 3 Change due to growth & use $9,000 $10,000 $10,000 $11,000 $12,000 $12,000 $13,000 $14,000 $15,000 $16,000 4 Increase due to rate adjustments $122,000 $129,000 $138,000 $147,000 $156,000 $166,000 $177,000 $125,000 $131,000 $142,000 Non-Rate Revenues
5 Miscellaneous Fees $39,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6 Interest Earnings $11,000 $12,000 $9,000 $6,000 $7,000 $8,000 $10,000 $13,000 $10,000 $10,000 $11,000 7 Total Revenue $2,075,000 $2,168,000 $2,304,000 $2,449,000 $2,608,000 $2,777,000 $2,957,000 $3,150,000 $3,286,000 $3,432,000 $3,722,000 O&M Costs
8 Salaries and Benefits $499,000 $514,000 $529,000 $545,000 $561,000 $578,000 $596,000 $613,000 $632,000 $651,000 $670,000 9 Supplies $22,000 $23,000 $23,000 $24,000 $25,000 $26,000 $26,000 $27,000 $28,000 $29,000 $30,000 10 Professional Services $191,000 $171,000 $176,000 $182,000 $187,000 $193,000 $199,000 $205,000 $211,000 $217,000 $224,000 11 Maintenance $75,000 $77,000 $79,000 $81,000 $84,000 $86,000 $89,000 $92,000 $94,000 $97,000 $100,000 12 Utilities $150,000 $155,000 $108,000 $111,000 $114,000 $118,000 $121,000 $125,000 $129,000 $133,000 $137,000 13 Conservation $59,000 $61,000 $63,000 $65,000 $67,000 $69,000 $71,000 $73,000 $75,000 $77,000 $80,000 14 Taxes, Insurance and Other $411,000 $423,000 $341,000 $351,000 $362,000 $373,000 $384,000 $395,000 $407,000 $420,000 $432,000 15 Emergency operations $0 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 16 SCWA Water Purchases $515,000 $546,000 $772,000 $818,000 $867,000 $919,000 $975,000 $1,033,000 $1,095,000 $1,161,000 $1,230,000 17 Total Operating Expenses $1,922,000 $1,980,000 $2,101,000 $2,187,000 $2,277,000 $2,372,000 $2,471,000 $2,573,000 $2,681,000 $2,795,000 $2,913,000 Debt and Transfers
18 Interfund Loan Payments to Sewer $104,500 $502,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 19 CalPERS Payment Plan $40,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 20 New Internal Loan Repayment $0 $0 $0 $61,000 $61,000 $61,000 $61,000 $61,000 $61,000 $61,000 $61,000 21 New Debt Service $0 $0 $0 $0 $0 $0 $0 $209,000 $209,000 $209,000 $209,000 21 Transfer Out to Capital Fund $0 $0 $0 $0 $0 $0 $400,000 $300,000 $200,000 $300,000 $500,000 22 Total Debt and Transfers $144,500 $582,000 $80,000 $141,000 $141,000 $141,000 $541,000 $650,000 $550,000 $650,000 $850,000 23 Total Revenue Requirement $2,066,500 $2,562,000 $2,181,000 $2,328,000 $2,418,000 $2,513,000 $3,012,000 $3,223,000 $3,231,000 $3,445,000 $3,763,000 24 Beginning Year Balance $1,172,000 $1,181,000 $787,000 $910,000 $1,031,000 $1,221,000 $1,485,000 $1,430,000 $1,357,000 $1,412,000 $1,399,000 25 Surplus/(Shortfall) $8,500 ($394,000) $123,000 $121,000 $190,000 $264,000 ($55,000) ($73,000) $55,000 ($13,000) ($41,000) 26 End of Year Balance $1,180,500 $787,000 $910,000 $1,031,000 $1,221,000 $1,485,000 $1,430,000 $1,357,000 $1,412,000 $1,399,000 $1,358,000 27 Operating Reserve Minimum Level $634,000 $653,000 $693,000 $722,000 $751,000 $783,000 $815,000 $849,000 $885,000 $922,000 $961,000 28 Available Balance $546,500 $134,000 $217,000 $309,000 $470,000 $702,000 $615,000 $508,000 $527,000 $477,000 $397,000

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Packet Pg. 656 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 W3-1
Schedule W-3 – Water Enterprise Cash Flow Pro Formas (2 of 2) WATER CAPITAL FUND (Fund 402)
Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 1 Beginning Balance $832,000 $952,600 $220,600 $335,700 $451,900 $439,200 $556,300 $434,600 $409,700 $271,600 $218,200 Revenues
2 Transfer in from Operating Fund $0 $0 $0 $0 $0 $0 $400,000 $300,000 $200,000 $300,000 $500,000 3 Impact Fee Revenue $111,000 $111,000 $111,000 $111,000 $111,000 $111,000 $111,000 $111,000 $111,000 $111,000 $111,000 4 Miscellaneous Fees $1,700 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 5 Interest Earnings $7,900 $9,000 $2,100 $3,200 $4,300 $4,100 $5,300 $4,100 $3,900 $2,600 $2,100 6 Total Revenues 120,600 122,000 115,100 116,200 117,300 117,100 518,300 417,100 316,900 415,600 615,100 Capital Spending
7 TOTAL CAPITAL SPENDING $0 $854,000 $160,000 $767,000 $130,000 $0 $4,035,000 $442,000 $455,000 $469,000 $483,000 8 Debt Funded Capital $0 $0 $160,000 $767,000 $0 $0 $3,396,000 $0 $0 $0 $0 9 Cash Funded Capital Projects $0 $854,000 $0 $0 $130,000 $0 $640,000 $442,000 $455,000 $469,000 $483,000 10 Capital Spending - 854,000 - - 130,000 - 640,000 442,000 455,000 469,000 483,000 11 Surplus/(Shortfall) 120,600 (732,000) 115,100 116,200 (12,700) 117,100 (121,700) (24,900) (138,100) (53,400) 132,100 12 Capital Reserve Ending Balance 1 $952,600 $220,600 $335,700 $451,900 $439,200 $556,300 $434,600 $409,700 $271,600 $218,200 $350,300 1 Includes Impact Fee reserve
Debt Coverage Calculations (combines both funds)
1 Revenue Available for Debt Service $18,100 ($383,000) $127,100 $126,200 $196,300 $270,100 $352,300 $442,100 $469,900 $500,600 $672,100 2 Total Yearly Parity Debt Payment $0 $0 $0 $0 $0 $0 $0 $209,000 $209,000 $209,000 $209,000 3 Debt Coverage Ratio na na na na na na na 2.12 2.25 2.40 3.22

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Packet Pg. 657 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 W4-1
Schedule W-4 – Five-Year Schedule of Proposed Water Rates Proposed Water Rates 2
Current 2022 2023 2024 2025 2026
Bi-Monthly Service Charge
3/4" meter $47.63 $50.49 $53.52 $56.73 $60.13 $63.74
1" meter $77.87 $82.54 $87.49 $92.74 $98.30 $104.20
1 1/2" meter $152.77 $161.94 $171.66 $181.96 $192.88 $204.45 2" meter $243.01 $257.59 $273.05 $289.43 $306.80 $325.21 3" meter $453.71 $480.93 $509.79 $540.38 $572.80 $607.17 4" meter $754.66 $799.94 $847.94 $898.82 $952.75 $1,009.92 Water Usage Rates ($/TGAL)
Residential
Tier 1 (0 to 10 TGAL)1$4.06 $4.30 $4.56 $4.83 $5.12 $5.43 Tier 2 (10 to 20 TGAL) $5.21 $5.52 $5.85 $6.20 $6.57 $6.96 Tier 3 (over 20 TGAL) $6.49 $6.88 $7.29 $7.73 $8.19 $8.68 Multi-Family, Non-Resid., & Irrigation
All Water Usage $4.51 $4.78 $5.07 $5.37 $5.69 $6.03
1 "TGAL" means thousand gallons
2 New rates implemented on the June 15th of the indicated year

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Packet Pg. 658 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 S1-1
Schedule S-1 – Sewer Enterprise Budgeted and Projected Operating and Debt Expense FY2022/23 FY2023/24 FY2024/25 FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 FY2031/32 1 Wages and Salaries $392,000 $403,800 $415,900 $428,400 $441,300 $454,500 $468,100 $482,200 $496,600 $511,500 2 Incentives 11,400 11,800 12,100 12,500 12,900 13,300 13,700 14,100 14,500 14,900 3 Fringe Benefits 3,200 3,300 3,400 3,500 3,700 3,800 3,900 4,000 4,100 4,200 4 Leave 58,800 60,600 62,400 64,200 66,200 68,200 70,200 72,300 74,500 76,700 5 Deductions 139,200 53,500 55,100 56,700 58,400 60,200 62,000 63,800 65,800 67,700 6 Insurance 117,500 121,000 124,700 128,400 132,200 136,200 140,300 144,500 148,800 153,300 7 Tax 6,900 7,100 7,300 7,500 7,800 8,000 8,200 8,500 8,700 9,000 8 Payouts 17,800 18,300 18,900 19,400 20,000 20,600 21,200 21,900 22,500 23,200 9 Materials and Supplies 7,200 7,400 7,600 7,900 8,100 8,400 8,600 8,900 9,100 9,400 10 Contract Supplies 97,900 100,800 103,800 106,900 110,200 113,500 116,900 120,400 124,000 127,700 11 Legal 18,700 19,200 19,800 20,400 21,000 21,600 22,300 23,000 23,700 24,400 12 Utlities 15,900 16,400 16,900 17,400 17,900 18,400 19,000 19,600 20,200 20,800 13 Repair and Maintenance 46,700 48,100 49,500 51,000 52,500 54,100 55,700 57,400 59,100 60,900 14 Other Expenses 147,100 151,600 156,100 160,800 165,600 170,600 175,700 181,000 186,400 192,000 15 Enterprise (Subregional) 1,413,700 1,498,500 1,588,400 1,683,700 1,767,900 1,856,300 1,949,100 2,046,600 2,148,900 2,256,300 16 EOC (emergency operations) 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 17 Debt Service (Subregional) 945,600 1,002,400 1,062,500 1,126,300 1,182,600 1,241,700 1,303,800 1,369,000 1,437,400 1,509,300 18 In-Lieu Housing Debt Service 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 67,500 19 CalPERS Payment Plan 76,200 76,200 76,200 76,200 76,200 76,200 76,200 76,200 76,200 76,200 Total $3,593,300 $3,677,500 $3,858,100 $4,048,700 $4,222,000 $4,803,100 $4,892,400 $4,990,900 $5,298,000 $5,715,000

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Packet Pg. 659 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 S3-1
Schedule S-2 – Sewer Enterprise Capital Spending Request (current dollars) Fiscal Year
Cost
(2022 dollars)
2021/22 West Sierra Avenue Sewer Replacement – Design $ 156,000 2022/23 West Sierra Avenue Sewer Replacement – Construction $ 1,100,000 2023/24 Cypress Avenue Sewer Repairs – Design $ 200,000 2024/25 Cypress Avenue Sewer Repairs – Construction $ 600,000 2027/28 Sewer Repairs – TBD $ 500,000
2029/30 Sewer Repairs – TBD $ 500,000
2031/32 Sewer Repairs – TBD $ 500,000
Project

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Packet Pg. 660 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 S3-1
Schedule S-3 – Sewer Enterprise Cash Flow Pro Formas (1 of 2) SEWER OPERATING FUND (404)
Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 1 Rate Revenue Increase: 9.00% 9.00% 9.00% 9.00% 9.00% 5.00% 5.00% 4.00% 4.00% 4.00% Rate Revenue
2 Sewer Rate Revenue $2,722,000 $2,722,000 $2,979,000 $3,260,000 $3,568,000 $3,905,000 $4,274,000 $4,507,000 $4,752,000 $4,963,000 $5,184,000 3 Change due to growth & use $12,000 $13,000 $15,000 $16,000 $18,000 $19,000 $20,000 $21,000 $22,000 $23,000 4 Increase due to rate adjustments $245,000 $268,000 $293,000 $321,000 $351,000 $214,000 $225,000 $190,000 $199,000 $207,000 Non-Rate Revenues
5 Interest Earnings $30,000 $25,000 $19,000 $15,000 $14,000 $13,000 $14,000 $15,000 $17,000 $18,000 $20,000 6 Total Revenue $2,752,000 $3,004,000 $3,279,000 $3,583,000 $3,919,000 $4,287,000 $4,521,000 $4,767,000 $4,980,000 $5,202,000 $5,434,000 O&M Costs
7 Salaries and Benefits $469,000 $483,000 $498,000 $513,000 $528,000 $544,000 $560,000 $577,000 $594,000 $612,000 $631,000 8 Supplies $7,000 $7,000 $7,000 $8,000 $8,000 $8,000 $8,000 $9,000 $9,000 $9,000 $9,000 9 Professional Services $137,000 $117,000 $120,000 $124,000 $127,000 $131,000 $135,000 $139,000 $143,000 $148,000 $152,000 10 Maintenance $45,000 $47,000 $48,000 $50,000 $51,000 $53,000 $54,000 $56,000 $57,000 $59,000 $61,000 11 Utilities $15,000 $16,000 $16,000 $17,000 $17,000 $18,000 $18,000 $19,000 $20,000 $20,000 $21,000 12 Subregional O&M & Debt Service $2,165,000 $2,359,000 $2,501,000 $2,651,000 $2,810,000 $2,950,000 $3,098,000 $3,253,000 $3,416,000 $3,586,000 $3,766,000 13 Taxes, Insurance and Other $399,000 $411,000 $333,000 $343,000 $353,000 $364,000 $375,000 $386,000 $398,000 $410,000 $422,000 14 Emergency operations $0 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 15 Total Operating Expenses $3,237,000 $3,450,000 $3,533,000 $3,716,000 $3,904,000 $4,078,000 $4,258,000 $4,449,000 $4,647,000 $4,854,000 $5,072,000 Debt and Transfers
16 In-Lieu Housing Debt Service $67,500 $67,500 $67,500 $67,500 $67,500 $67,500 $67,500 $67,500 $67,500 $67,500 $67,500 17 CalPERS Payment Plan $38,100 $76,200 $76,200 $76,200 $76,200 $76,200 $76,200 $76,200 $76,200 $76,200 $76,200 18 New Loan from General Fund $0 $49,000 $49,000 $49,000 $49,000 $49,000 $49,000 $49,000 $49,000 $49,000 $49,000 19 Transfers In from Capital Fund for Debt ($45,700) ($41,500) ($45,700) ($45,700) ($45,700) ($45,700) ($45,700) ($45,700) ($45,700) ($45,700) ($45,700) 20 Transfer Out to (in from) Capital Fund $0 $0 $0 ($200,000) $0 $0 $0 $0 $0 $0 $300,000 21 Total Debt and Transfers $59,900 $151,200 $147,000 ($53,000) $147,000 $147,000 $147,000 $147,000 $147,000 $147,000 $447,000 22 Total Revenue Requirement $3,296,900 $3,601,200 $3,680,000 $3,663,000 $4,051,000 $4,225,000 $4,405,000 $4,596,000 $4,794,000 $5,001,000 $5,519,000 23 Beginning Year Balance $3,155,000 $2,610,000 $2,012,800 $1,611,800 $1,531,800 $1,399,800 $1,461,800 $1,577,800 $1,748,800 $1,934,800 $2,135,800 24 Surplus/(Shortfall) ($544,900) ($597,200) ($401,000) ($80,000) ($132,000) $62,000 $116,000 $171,000 $186,000 $201,000 ($85,000) 25 End of Year Balance $2,610,100 $2,012,800 $1,611,800 $1,531,800 $1,399,800 $1,461,800 $1,577,800 $1,748,800 $1,934,800 $2,135,800 $2,050,800 26 Operating Fund Reserve Target $1,068,000 $1,139,000 $1,166,000 $1,226,000 $1,288,000 $1,346,000 $1,405,000 $1,468,000 $1,534,000 $1,602,000 $1,674,000 27 Available Balance $1,542,100 $873,800 $445,800 $305,800 $111,800 $115,800 $172,800 $280,800 $400,800 $533,800 $376,800

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Packet Pg. 661 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 S3-2
Schedule S-3 – Sewer Enterprise Cash Flow Pro Formas (2 of 2) SEWER CAPITAL FUND (405)
Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 1 Beginning Balance $286,000 $448,200 $794,700 $804,500 $183,600 $393,900 $606,400 $241,000 $452,400 $51,000 $260,900 Revenues
2 Impact Fee Revenue $238,600 $216,500 $238,600 $238,600 $238,600 $238,600 $238,600 $238,600 $238,600 $238,600 $238,600 3 Loan Repayment from Water $104,500 $502,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 4 Miscellaneous Fees $18,100 $15,300 $15,400 $15,600 $15,700 $15,900 $16,000 $16,200 $16,400 $16,500 $16,500 5 Interest Earnings $2,700 $4,200 $7,500 $7,600 $1,700 $3,700 $5,700 $2,300 $4,300 $500 $2,500 6 Total Revenues $363,900 $738,000 $261,500 $261,800 $256,000 $258,200 $260,300 $257,100 $259,300 $255,600 $257,600 Capital Spending
7 TOTAL CAPITAL SPENDING $156,000 $1,100,000 $206,000 $637,000 $0 $0 $580,000 $0 $615,000 $0 $652,000 8 Debt Funded Capital $0 $750,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 9 Cash Funded Capital Projects $156,000 $350,000 $206,000 $637,000 $0 $0 $580,000 $0 $615,000 $0 $652,000 10 Transfer Out to Operating Fund for Debt $45,700 $41,500 $45,700 $45,700 $45,700 $45,700 $45,700 $45,700 $45,700 $45,700 $45,700 11 Transfer out (in) from Operating Fund $0 $0 $0 $200,000 $0 $0 $0 $0 $0 $0 ($300,000) 12 Capital Spending $201,700 $391,500 $251,700 $882,700 $45,700 $45,700 $625,700 $45,700 $660,700 $45,700 $397,700 13 Surplus/(Shortfall) 1
162,200 346,500 9,800 (620,900) 210,300 212,500 (365,400) 211,400 (401,400) 209,900 (140,100) 14 Capital Reserve Ending Balance 1 $448,200 $794,700 $804,500 $183,600 $393,900 $606,400 $241,000 $452,400 $51,000 $260,900 $120,800 1 Includes Impact Fee reserve
Debt Coverage Calculations (combines both funds)
1 Revenue Available for Debt Service ($465,300) ($117,200) ($423,800) ($302,500) ($160,300) $35,900 $92,000 $143,800 $161,000 $172,300 $188,300 2 Total Yearly Parity Debt Payment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 3 Debt Coverage Ratio na na na na na na na na na na na

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Packet Pg. 662 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 City of Cotati
2022 Water and Sewer Financial Plans Schedules
1 S4-1
Schedule S-4 – Five-Year Schedule of Proposed Sewer Rates Proposed Sewer Rates 2
Current 2022 2023 2024 2025 2026
Bi-Monthly Service Charge
3/4" meter $82.23 $89.63 $97.70 $106.49 $116.07 $126.52 1" meter $135.45 $147.64 $160.93 $175.41 $191.20 $208.41 1 1/2" meter $267.36 $291.42 $317.65 $346.24 $377.40 $411.37 2" meter $426.26 $464.62 $506.44 $552.02 $601.70 $655.85 3" meter $797.31 $869.07 $947.29 $1,032.55 $1,125.48 $1,226.77 4" meter $1,327.26 $1,446.71 $1,576.91 $1,718.83 $1,873.52 $2,042.14 Sewer Usage Rates ($/TGAL) 1
All Customers $9.60 $10.46 $11.40 $12.43 $13.55 $14.77
2 New rates implemented on the June 15th of the indicated year 1 Residential customers without separate irrigation meters will be charged based on the lesser of the estimated actual use and the actual water usage. All other customers will have sewer service charges based on the metered water consumption from all sources except those sources that are not discharged to the city sewer as determined by the City Engineer.

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Packet Pg. 663 Attachment: Draft 2022 Water & Sewer Rate Study Report (Water and Sewer Rates - Initiate Prop 218 Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: Nominations for regional commissions and committees on behalf of Sonoma County Mayors' and Councilmembers' Association and City Selection Committee Date: April 12, 2022
Written by: Kevin Patterson, Deputy City Clerk
Recommendation
It is recommended that the City Council review letters of interest received and provide the Mayor with direction for voting at the upcoming Mayors' and Councilmembers' Association and City Selection Committee meeting.

Background
The City of Cotati is a member of the Sonoma County Mayors’ and Councilmembers’ Association and the Sonoma County City Selection Committee. Each body appoints members to various regional Boards and Commissions. The voting delegates from the City are the Mayor (primary) and Vice Mayor (alternate).

Analysis/Discussion
At its April 14, 2022 meeting, the Sonoma County Mayors’ and Council Members’ Association (SCMCA) Board of Directors and City Selection Committee will make appointment for the following vacated positions:

CITY SELECTION COMMITTEE Appointments to Consider:
· Airport Land Use Commission, one position, to fill vacated seat of Jack Tibbetts (Santa Rosa). Current term expires May 2023.

No letters received
· Local Agency Formation Commission, one position, to fill expiring term of Councilmember Pam Stafford (Rohnert Park), 4 year term.

One letter received - Pam Stafford, Rohnert Park

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· Remote Access Network (RAN), one position, must be filled by a Mayor. *Note: The RAN appointment has been vacant for two years. Their next meeting is on April 14th. Meetings are as needed and listed as annual but it is anticipated RAN may have several meetings this year. The RAN Board regulates the use of a DMV fee (Vehicle Code Section 9250.19) to operate and maintain fingerprint identification systems in Sonoma County, and to make identification system recommendations to the Sonoma County Board of Supervisors. The RAN Board operates out of the Sonoma County Sheriff's Office, and is composed of seven members: a member of the Board of Supervisors, the Sheriff, the District Attorney, the Chief of Police of the Cal-ID member department having the largest number of sworn personnel within the County, a second Chief selected by all other Police Chiefs in the County, a Mayor elected by the City Selection Committee, and a member-at-large chosen by the other members. The Board of Supervisors Criminal Justice Liaison for 2022 is David Rabbitt.

No letters received
Financial Considerations
Not applicable.

Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.

Attachments:

Stafford LOI for LAFCO (PDF)

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Packet Pg. 666 Attachment: Stafford LOI for LAFCO (Mayors and Councilmembers Association Appts.) Cotati City Council
Agenda Staff Report
Item type: INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED To: City Council
Subject: Information received after the agenda was posted.

Date: April 12, 2022
Written by: Kevin Patterson, Deputy City Clerk
Recommendation
Information or written comments pertaining to this meeting, and which was received after the agenda was posted, is attached below.

Pursuant to City Council Policy 2021-01: City Council Rules section IV A., written Communications, interested persons or their authorized representative may address the Council by written communication on any matters concerning the City’s business, or any matters over which the Council has control.

1. To be considered for inclusion in the agenda packet, such written communication shall be delivered to the City Clerk no later than 11:00 a.m. of the Wednesday the week preceding the regular Council meeting for which such written communication is intended.

2. If received after the above date and time, but no later than noon the day before the meeting, written communications received by the City Clerk shall be posted on the website by the end of that day and notification provided to the electronic Agenda mailing list by the end of the day. All written communications received by the City Clerk by 5 pm on the City Council meeting day shall be made available to the City Council and public at the City Council meeting.

City Council Policy 2021-01 is available at the online meeting portal at www.cotaticity.org or by request from the Deputy City Clerk at 707-665-3622 or [email protected].

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