Fortuna City Council
April 15, 2024

Water and Wastewater User Rate Study
Version: Draft
City of Fortuna

Water and Wastewater Rate Update
March 2024
Water and Wastewater User Rate Study
Client Name: City of Fortuna
Project Name: Water and Wastewater Rate Update
Revision No.: Draft Project No.: D3726700
Date: April 2024 Project Manager: Ted Couch
Prepared by: Kurt Playstead
File Name:

Document history and status
Revision Date Description Author Checked Reviewed Approved Jacobs Engineering Group Inc.
2525 Airpark Dr.

Redding, CA 96001
United States
T +1.530.243.5831
www.jacobs.com
Copyright Jacobs Engineering Group Inc. © 2024.

All rights reserved. The concepts and information contained in this document are the property of the Jacobs group of companies. Use or copying of this document in whole or in part without the written permission of Jacobs constitutes an infringement of copyright.

Jacobs, the Jacobs logo, and all other Jacobs trademarks are the property of Jacobs.

NOTICE: This document has been prepared exclusively for the use and benefit of Jacobs’ client. Jacobs accepts no liability or responsibility for any use or reliance upon this document by any third party.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. iii
Contents
Acronyms and Abbreviations.......................................................................................................................................... v

1. Introduction ........................................................................................................................................................1-2

2. Methodology.......................................................................................................................................................2-3

3. Assumptions .......................................................................................................................................................3-5

4. Water Rate Study ...............................................................................................................................................4-6

4.1 Background Information ....................................................................................................................................4-6

4.2 Existing Debt Service Expenses .......................................................................................................................4-9

4.3 Revenue Requirements.......................................................................................................................................4-9

4.4 Debt Service ............................................................................................................................................................4-2

4.5 Capital Improvements.........................................................................................................................................4-3

4.6 Total System Revenue Requirements ...........................................................................................................4-4

4.7 Proposed Rates ......................................................................................................................................................4-4

4.8 Projected System Revenues..............................................................................................................................4-5

4.9 Impact on Typical User Bills..............................................................................................................................4-7

4.10 Alternative Water Rate Increase Scenario ...................................................................................................4-8

5. Wastewater Rate Study.....................................................................................................................................5-2

5.1 Background Information ....................................................................................................................................5-2

5.2 Existing Debt Service Expenses .......................................................................................................................5-6

5.3 Revenue Requirements.......................................................................................................................................5-6

5.4 Debt Service ............................................................................................................................................................5-7

5.5 Capital Improvements.........................................................................................................................................5-8

5.6 Total System Revenue Requirements ...........................................................................................................5-8

5.7 Proposed Rates ......................................................................................................................................................5-9

5.8 Projected System Revenues...........................................................................................................................5-10

5.9 Impact on Typical User Bills...........................................................................................................................5-13

5.10 Alternative Wastewater Rate Increase Scenario.....................................................................................5-14

6. Rates Comparison Across Communities.................................................................................................... 6-16

7. Conclusions and Recommendations.................................................................................................................2

8. References ...............................................................................................................................................................2 Appendices
Appendix A. Projected Water Rates
Appendix B. Projected Wastewater Rates
Appendix C. Projected Sources and Uses of Funds
Appendix D. Wastewater System Capital Improvement Plan
Appendix E. Projected Wastewater Rates
Appendix F. Projected Sources and Uses of Funds, Wastewater Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. iv
Tables
Table 4-1. Water Customer Accounts, 2021-23.................................................................................................................4-7 Table 4-2. Water Customer Usage and Revenues, Calendar Year 2021-23............................................................4-7 Table 4-3. Current Water Rates, Inside City ..........................................................................................................................4-8 Table 4-4. Operation and Maintenance Expenses, FY 2020/21–2023/24.............................................................4-9 Table 4-5. Projected Operating Expenses .............................................................................................................................4-2 Table 4-6. Projected Revenue Requirements ......................................................................................................................4-4 Table 4-7. Projected Annual Rate Increases.........................................................................................................................4-4 Table 4-8. Projected Total System Revenue with Proposed Rate Adjustments.....................................................4-5 Table 4-9. Projected Annual Rate Increases, Scenario 1.................................................................................................4-8 Table 5-1. Wastewater Customer Accounts, Calendar Year 2021-23 .......................................................................5-3 Table 5-2. Wastewater Customer Revenues, FY 2021-2023 ........................................................................................5-3 Table 5-3. Current Wastewater Rates, Inside City...............................................................................................................5-4 Table 5-4. Operation and Maintenance Expenses, FY 2021–2023 ............................................................................5-5 Table 5-5. Projected Operating Expenses .............................................................................................................................5-7 Table 5-6. Projected Revenue Requirements ......................................................................................................................5-9 Table 5-7. Projected Annual Rate Increases.........................................................................................................................5-9 Table 5-8. Projected Total System Revenue with Proposed Rate Adjustments..................................................5-10 Table 5-9. Projected Annual Rate Increases, Scenario 1..............................................................................................5-14 Figures
Figure 4-1. Historical Revenues, FY 2021–2023................................................................................................................4-8 Figure 4-2. Projected Annual Debt Service, Water.............................................................................................................4-3 Figure 4-3. Revenue Requirements and Rate Revenues..................................................................................................4-6 Figure 4-4. Ending Capital and Operating Reserve Balance ..........................................................................................4-6 Figure 4-5. Debt Service Coverage, Water Utility ...............................................................................................................4-7 Figure 4-6. Typical Residential Water Bill for 4,500 Gallons, Proposed Rates (FY 2024/25–FY 2028/29).4- 8 Figure 4-7. Ending Capital and Operating Reserve Balance, Scenario 1...................................................................4-9 Figure 5-1. Historical Revenues, FY 2020/21–2022/23 ................................................................................................5-5 Figure 5-2. Projected Annual Debt Service, Wastewater.................................................................................................5-8 Figure 5-3. Revenue Requirements and Rate Revenues...............................................................................................5-11 Figure 5-4. Ending Capital and Operating Reserve Balance .......................................................................................5-12 Figure 5-5. Debt Service Coverage, Wastewater Utility.................................................................................................5-13 Figure 5-6. Typical Residential Wastewater Bill for 4,500 Gallons, Proposed Rates FY 2024/25 through FY 2028/29 ..........................................................................................................................................................................................5-14 Figure 5-7. Ending Capital and Operating Reserve Balance, Scenario 1................................................................5-15 Figure 6-1. Comparison of the City’s Water and Wastewater Bills with Other Communities for 6 CCF of Water Consumed ..........................................................................................................................................................................6-16 Figure 6-2. Comparison of the City’s Water and Wastewater Bills with Other Communities for 6 CCF of Water Consumed, FY 2023-24 through FY 2026-27....................................................................................................6-17 Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. v
Acronyms and Abbreviations
$/ccf dollar(s) per one hundred cubic feet
$/mo dollar(s) per month
AWWA American Water Works Association
ccf one hundred cubic feet
CIP capital improvement plan
City or utility City of Fortuna
CCI Construction Cost Index
COLA Cost of living adjustment
CPI Consumer Price Index
CSD Community Services District
ft3 cubic feet (foot)
FY fiscal year
mgd million gallon(s) per day
NPDES National Pollutant Discharge Elimination System
O&M operation and maintenance
report Water and Wastewater User Rate Study
SRF State Revolving Fund
WWTP wastewater treatment plant
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 1-2

1. Introduction
This Water and Wastewater User Rate Study (report) presents the results of Jacobs’ water and wastewater rate analysis and proposed water and wastewater rates for the City of Fortuna (City or utility). The City has experienced increased operating costs and escalating capital costs that have strained the utility’s financial resources. Economic pressures caused by supply chain disruptions brought on by the COVID pandemic and a competitive labor market have caused dramatic increases in operating costs. Both the water and wastewater system need capital improvements to replace aging infrastructure or to comply with treatment regulations. The City has managed the utility’s increasing costs with a revenue stream that has not increased at the same rate as its costs. The most recent change to the City’s water and wastewater rates occurred in 2012. From 2012 to 2024, the California Construction Cost Index (CCI) and the California Consumer Price Index (CPI) have increased approximately 70 percent and 39 percent, respectively.

Jacobs recommends that the City adjust its water and wastewater rates to help ensure that sufficient revenues will be generated to meet current debt service requirements and the City’s other financial commitments. Jacobs also recommends that the City continue to deposit monies into the capital reserve fund that will be used to pay for anticipated system repairs and replacements on a “pay-as-you-go” basis.

The information in this report relies on data provided by the utility and other public sources. Financial and customer data presented in this report were provided by the City. Rate and fee data presented for other utilities were collected from publicly available information from utility websites or utility customer service departments. The water and wastewater utilities are distinct enterprise funds within the City and are examined separately. Projected water and wastewater expenditures and revenues presented herein are based on assumptions presented in this report. Proposed water and wastewater rates may need to be adjusted if currently unknown operating or capital expenditures affect the utility’s revenue requirements or if material changes to the utility’s customer base or usage patterns occur. This report has been prepared exclusively for Jacobs’ client and no liability is accepted for any use of or reliance on the report by third parties.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 2-3

2. Methodology
For this analysis, the cash basis method was used to determine the revenue requirements of the water system and wastewater system. The cash basis method is typically used by government-owned utilities and measures the total revenues needed to meet the utility’s forecast cash expenditures. The essence of this method is that the revenues generated by the City must be sufficient to cover all its cash needs, as well as any other financial commitments for the period of the analysis. The rate analysis follows rate-making guidance provided in the American Water Works Association document M1 Principles of Water Rates, Fees, and Charges, Seventh Edition (2016) that serves as the industry standard for developing water and wastewater rates.

The Jacobs team reviewed the City’s financial and customer data and summarized revenue requirements for the water and wastewater utilities. This analysis is the foundation for developing rate models for a 5- year forecast period. Projections consider potential impacts on operations and maintenance (O&M) costs and capital financing requirements of the City’s prospective improvements to its water and wastewater systems. Projected revenue requirements will be developed for each utility and may include provisions for the following:
▪ O&M costs
▪ Administrative costs
▪ Renewal and replacement costs
▪ Debt-funded capital outlays, including existing outstanding debt service and projected debt for bonds and loans anticipated to fund future Capital Improvement Plan (CIP) projects ▪ Maintaining targeted reserve balances
▪ New and/or one-time expenditures
In determining the revenue requirements for the City’s water and wastewater utilities, Jacobs evaluated the revenue projections based on the cash basis approach. Non-rate revenue is subtracted from the total revenue requirements to determine the amount of revenue requirements to be recovered from user rates.

Figure 2-1 presents an overview of the process used to determine the rate revenue requirements.

Figure 2-1. Revenue Requirements Recovered from Rates
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 2-4
Changes in the water and wastewater utilities costs were projected over the 5-year analysis period. Annual percentage changes in the rate revenue requirements were applied to the City’s existing rate structure to project the required adjustments in the water and wastewater rate revenues through fiscal year (FY) 2029.

The City’s existing water rate structure consists of a monthly meter charge that varies based on meter size to reflect the potential demand placed on the system of a larger meter and the higher costs associated with meeting the demands of larger meters. The water rates also have a volumetric charge that is assessed on water consumption. The sewer rates have different classifications for different customer types to reflect the different demands placed on the system by different users. There is a separate rate class for residential, commercial, and industrial customers. The commercial users are classified into low, medium, or high rate classes depending on the strengths of their wastewater flows. The higher strength flows pay a higher rate compared to the lower strength flows because it costs more to treat higher strength flows.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 3-5

3. Assumptions
This financial analysis and rate study is based on projections of costs (both O&M and capital) that the City is expected to incur during the 5-year planning period, FY 2025 through FY 2029, and the revenues that the City expects to generate during the same period. The financial plan is based on a set of overall assumptions related to customer growth, inflation, and other factors, as well as the specific phasing of the utility’s capital spending.

The following general assumptions were used in developing the financial plan:
▪ Water and wastewater sales under existing rates are expected to remain constant over the analysis period. This is consistent with recent trends of customer accounts and rate revenue over the last 3 years.
▪ Escalation rates:
- Salaries: 10.0% Cost of Living Adjustment (COLA) in FY 2024, 3.0% COLA in the remaining years - Benefits: 10.0% per year
- Chemicals: 5.0% per year
- Utilities: 5.0% per year
- Capital: 5.0% in FY 2024 and 2025, 4.0% in FY 2026 and beyond - General: 3.0% per year
▪ Interest earned on investments: 1.0%
▪ Debt service coverage requirement: 1.25
▪ The City needs to keep a minimum of 6 months (180 days) of operating expenses in operating reserves and an additional targeted minimum balance of $3.0 million in the water capital reserves and $5.0 wastewater capital reserves.
▪ The City will use available operating and capital reserves to pay for unanticipated operating expenses and scheduled capital projects.
▪ Beginning available reserve balance in FY 2024 for each fund:
- Water Operating Fund: $2.5 million
- Water Capital Fund: $4.5 million
- Wastewater Operating Fund: $4.0 million
- Wastewater Capital Fund: $9.0 million
▪ Debt financing assumptions:
- No new debt for the water utility
- For wastewater, it is assumed the utility will receive a grant of $5.5 million for the wastewater plant upgrade and a low interest loan from the State Revolving Fund (SRF). It was assumed the term of the loan would be equal to current interest rates on SRF loans of approximately 1.72% with a term of 30 years.
▪ For FY 2024, the average residential water use for the City customers is approximately 6 ccf (4,500 gallons) per month. This consumption level will be used to calculate impacts to residential water and wastewater bills.
▪ The City will add a utility superintendent in FY 2025 at a burdened rate of $120,000 per year. The cost will be shared evenly between the water and wastewater utility. ▪ To account for consumer response to proposed rate increases, an adjustment was made to consumption based rate revenue to reflect lower consumption after rate increases were implemented.

It was assumed water consumption would reduce by 1.5 percent for every 10 percent in rate increases.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-6

4. Water Rate Study
The City maintains and operates a water and wastewater utility serving residential, commercial, and industrial customers in Fortuna, CA. The City is governed by a city council. The day-to-day operations of the system are directed by the Public Works Director and a staff of approximately 16 water personnel. The City’s FY runs from July 1 to June 30 (that is, “FY 2023” means the data are from July 2022 through June 2023). Financial data will be reported for the City’s FY. Customer data are reported in calendar year (that is, January through December).

4.1 Background Information
The water utility operates as an enterprise fund and pays for its operating and capital costs through user charges. The utility has a water operations fund and a capital improvement fund. The water utility fund has three divisions:
▪ Administration
▪ Pumping/Treatment/Storage
▪ Transmission/Distribution
The utility has the responsibility for:
• Water production and treatment
o Operate and maintain four water wells producing 500 million gallons per year o Water treatment
o Permitting and reporting
• Water Storage and distribution:
o O&M of four water storage facilities
o Maintenance of 42 miles of distribution pipeline
o O&M of eight pump stations
o Maintain water service connections and water meters
o Conduct meter reading, meter testing, and meter replacement o Permitting and Reporting
The Water Operations Fund needs to keep a minimum of 6 months of operating expenses in reserve and has a targeted minimum balance of approximately $3.0 million for the Capital Improvement Fund. The 2017 Revenue Bond issuance has a debt service coverage requirement of 1.25, which means the annual net revenues of the system (gross revenues minus operating expenses) must be 125% of the system’s annual debt service requirements.

4.1.1 Customer Data
Table 4-1 presents the water customer accounts from 2021 through 2023. The data represents the average number of accounts for each customer class over each 12-month calendar year period. Customer accounts have remained relatively stable over the last 3 years. The average number of accounts for 2023 is 4,628. Residential customers represent nearly 90% of total accounts.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-7
Table 4-1. Water Customer Accounts, 2021-23
Rate Class 2021 2022 2023
Residential 4,123 4,135 4,153
Commercial 341 338 331
Schools 15 15 15
Theatre/Church/Hall 28 27 27
Mobile Home Parks 3 3 3
Motels/RV Parks 11 11 11
Dorm/Convalescent 9 9 9
Hospital 1 1 1
Industrial 4 4 4
Irrigation 33 32 32
Residential Outside City 41 41 41
Comm/Res Combo 1 1 1
Total 4,610 4,616 4,628
Note: Customer data are for calendar year (that is, January through December).

Table 4-2 presents water sales revenues and billed water usage (in ccf) for the water utility for calendar year 2021 through 2023. The revenues and consumption are for all active accounts during the 12-month period. The City provides retail water service to residential, commercial, and industrial customers located inside and outside the City limits. Total water consumption ranged from nearly 440,000 ccf in 2023 to approximately 465,000 ccf in 2021. Water revenue was about $2.28 million in 2021 and in 2023.

Residential customers accounted for nearly 74% of water revenues in 2023.

Table 4-2. Water Customer Usage and Revenues, Calendar Year 2021-23 Water Usage (ccf) Water Revenue
Rate Class 2021 2022 2023 2021 2022 2023
Residential 348,743 329,423 325,828 $1,689,663 $1,677,130 $1,690,161 Commercial 49,034 44,966 50,598 $265,216 $262,030 $271,336 Schools 3,537 3,772 4,110 $28,763 $29,269 $29,898
Theatre/Church/Hall 2,521 1,409 1,494 $12,428 $11,190 $11,163 Mobile Home Parks 14,974 16,949 15,932 $76,172 $84,366 $84,748 Motels/RV Parks 11,929 11,635 11,750 $47,451 $46,860 $47,071 Dorm/Convalescent 10,512 11,030 10,275 $37,855 $39,051 $36,831 Hospital 6,098 6,125 3,023 $16,481 $16,487 $15,712
Industrial 1,798 1,648 1,393 $6,053 $5,748 $5,361
Irrigation 10,928 9,184 8,801 $68,437 $64,981 $64,338
Residential Outside City 4,517 3,843 4,215 $26,472 $24,792 $25,861 Comm/Res Combo 178 258 316 $2,212 $2,212 $2,241
Total 464,767 440,241 437,734 $2,277,203 $2,264,116 $2,284,719 Note: Customer data are for Calendar year (that is, January through December).

4.1.2 Existing Rates
Tables 4-3 presents the current rate schedules for the City’s water system. Metered water rates include a monthly minimum meter charge based on the size of the meter and a volume charge. Larger meter sizes pay a higher monthly charge to reflect the potential demand placed on the water system of providing service to a larger meter and the higher costs associated with meeting those demands. Volumetric charges are based on each customer’s monthly water consumption. The monthly minimum charge Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-8
includes the first 3 ccf of water use in the winter months (November through April) and 5 ccf in the summer months (May through October). The volume charge is $1.90 per ccf over the minimum water included in the base charge. Outside city customers pay 1.5 times the rate for inside city customers.

Table 4-3. Current Water Rates, Inside City
Meter Size (inches)
Base Charge
($/mo)
5/8 by 3/4 $23.04
1 $44.07
1 1/2 $87.21
2 $147.61
3 $320.16
4 $561.73
6 $1,251.95
Volume Charge ($/ccf) $1.90
$/ccf =dollar(s) per one hundred cubic feet
$/mo = dollar(s) per month

4.1.3 Historical Revenues
Figure 4-1 shows historical revenues for the water utility for FY 2020/21 through FY 2022/23. Total system revenues ranged from approximately $2.4 million in FY 2020/21 to $2.7 million in FY 2022/23. In FY 2022/23, water rate revenues accounted for approximately $2.3 million, or 87%, of total revenue. The remaining non-rate revenue was generated by miscellaneous other charges and interest revenue.

Figure 4-1. Historical Revenues, FY 2021–2023
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-9

4.1.4 Historical Operation and Maintenance Expenses
O&M expenses include all costs associated with operating and maintaining the water utility, including personnel, utilities, materials and supplies, and general and administrative costs. Table 4-4 summarizes actual cash operating expenses for FY 2020/21 through FY 2022/23 and Budget FY 2023/24. Cash operating expenses, which exclude depreciation and debt service expenses, increased from approximately $1.8 million in FY 2021 to approximately $1.9 million in FY 2022/23. The FY 2023/24 has total expense for the water utility increasing to approximately $2.1 million. Each of the three cost centers account for approximately 33 percent of total expense in the FY 2023/24 budget.

Table 4-4. Operation and Maintenance Expenses, FY 2020/21–2023/24 Division
FY
2020/21
FY
2021/22
FY
2022/23
FY
2023/24
Transmission and Distribution
Salaries and Benefits $344,043 $398,432 $373,138 $399,982 Services and Supplies $206,960 $164,200 $260,000 $264,500 Capital Outlay $24,584 $497,403 $0 $40,000
Subtotal $575,587 $1,060,035 $633,138 $704,482
Pumping, Treatment, and Storage
Salaries and Benefits $273,983 -$12,757 $222,025 $238,487 Services and Supplies $318,750 $300,628 $358,500 $360,000 Capital Outlay $7,906 $29,431 $25,000 $122,500
Subtotal $600,639 $317,302 $605,525 $720,987
Administration
Salaries and Benefits $432,186 $452,526 $443,554 $483,589 Services and Supplies $154,864 $152,100 $169,234 $199,155 Capital Outlay $0 $0 $0 $0
Subtotal $587,050 $604,626 $612,788 $682,744
Total $1,763,276 $1,981,963 $1,851,451 $2,108,213

4.2 Existing Debt Service Expenses
Existing debt service costs are the annual principal and interest payments associated with outstanding bonds. In 2017, the City issued the Series 2017 Water Revenue Bond to refund a previous bond issuance.

For FY 2024, the principal and interest payments are approximately $400,000.

4.3 Revenue Requirements
For this analysis, the cash basis method was used to determine the revenue requirements of the water system. The essence of this method is that the revenues generated by the City must be sufficient to cover all its cash needs, as well as any other financial commitments for the period of the analysis. The components of the City’s water utility revenue requirements include:

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-2
▪ O&M expenses
▪ Pay-as-you-go capital
▪ Debt service requirements
The total water system O&M expenses include salaries, materials, supplies, chemicals, and other daily operating expenses. For the purposes of these financial projections, the O&M expenses were separated into the following divisions:
▪ Transmission and Distribution
▪ Pumping, Treatment, and Storage
▪ Administration
Table 4-5 presents the projected operating expenses for the utility for the analysis period. The City’s operating expenses are budgeted to be approximately $2.1 million in FY 2023/24. Over the analysis period, O&M expenses are estimated to increase to approximately $2.6 million by FY 2028/29, a cumulative increase of 22% from FY 2023/24 levels.

Table 4-5. Projected Operating Expenses
Cost Center
FY
2023/24
FY
2024/25
FY
2025/26
FY
2026/27
FY
2027/28
FY
2028/29
Transmission and Distribution
Salaries and Benefits $399,982 $410,985 $435,360 $461,671 $490,097 $520,833 Services and Supplies $264,500 $273,425 $282,667 $292,239 $302,152 $312,420 Capital Outlay $40,000 $41,600 $43,264 $44,562 $45,899 $47,276 Subtotal $704,482 $726,010 $761,291 $798,472 $838,148 $880,529 Pumping, Treatment, and Storage
Salaries and Benefits $238,487 $248,912 $263,707 $279,678 $296,935 $315,595 Services and Supplies $360,000 $376,120 $392,988 $410,511 $428,846 $448,032 Capital Outlay $122,500 $127,400 $132,496 $136,471 $140,565 $144,782 Subtotal $720,987 $752,432 $789,191 $826,660 $866,346 $908,409 Administration
Salaries and Benefits $483,589 $488,805 $514,550 $542,177 $571,851 $603,756 Services and Supplies $199,155 $205,398 $211,841 $218,492 $225,357 $232,443 Capital Outlay $0 $0 $0 $0 $0 $0
Subtotal $682,744 $694,202 $726,391 $760,669 $797,208 $836,200 Total $2,108,213 $2,172,644 $2,276,874 $2,385,801 $2,501,701 $2,625,137

4.4 Debt Service
The system debt service requirements consist of the principal and interest payments on its outstanding debt. In addition, the covenants on the City’s outstanding debt requires the City to generate net revenues (gross revenues minus operating expenses) that are 1.25 times the annual debt service payments on its Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-3
outstanding debt. Revenues in excess of the debt service and O&M costs can be used to pay for capital outlays. The Series 2017 Revenue Bonds have an annual debt service payment of approximately $400,000 in FY 2023/24 and remain relatively constant through FY 2028/29.

Figure 4-2 presents the projected annual debt service for existing over the analysis period. No new debt is projected to be issued over the analysis period. Annual debt service payments on existing is approximately $400,000 through FY 2028/29.

Figure 4-2. Projected Annual Debt Service, Water

4.5 Capital Improvements
The City’s CIP includes water system capital improvements that are needed to replace aging infrastructure and continue to meet forecast system water demands. The largest planned capital expenditures for the water system (in 2023 dollars) during the analysis period are:
▪ Downtown Waterline Replacement Project: $1.9 million
▪ Drake Hill Road Water Main Replacement: $950,000
▪ 12th Street Water Main Project: $880,000
▪ Carson Woods Road Water Line Replacement Project: $830,000 ▪ Waterline Replacement Project: $1.0 million
Total capital expenditures over the analysis period are approximately $8.0 million (2023 dollars). Project costs were increased annually to adjust for inflation. Total inflated capital costs included in the analysis are nearly $9.0 million. Appendix A provides a list of projects included in the water system CIP from FY 2023/24 through FY 2028/29.

The utility plans to fund the water system capital improvements from capital reserves and user rates. City management will make necessary financial decisions to ensure capital reserves are sufficient to cover future capital expenditures. The City does not currently plan to issue new debt to pay for additional water system capital improvements.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-4

4.6 Total System Revenue Requirements
Table 4-6 summarizes the revenue requirements for the analysis period. The total system rate revenue requirement is expected to range between $2.9 in FY 2024/25 to $4.3 million through FY 2028/29. Rate increases will be necessary to pay for escalation in O&M expenses and to fund the capital improvement projects. Increases are also need to maintain sufficient working capital equal to approximately 6 months of operating expenses and debt service coverage requirements.

Table 4-6. Projected Revenue Requirements
Projected Projected Projected Projected Projected
Item FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 Revenue Requirements
Operation and Maintenance
Transmission & Distribution $726,010 $761,291 $798,472 $838,148 $880,529 Pumping, Treatment & Storage $752,432 $789,191 $826,660 $866,346 $908,409 Administration $756,002 $790,045 $826,232 $864,738 $905,756 Other
Subtotal O&M $2,234,444 $2,340,528 $2,451,364 $2,569,232 $2,694,694 Capital Costs
Existing Debt Service $399,275 $397,025 $399,150 $395,650 $396,525 New Debt Service $0 $0 $0 $0 $0
Transfer to Improvement Fund $1,024,942 $1,210,486 $1,291,299 $1,300,845 $1,298,138 Subtotal Capital Costs $1,424,217 $1,607,511 $1,690,449 $1,696,495 $1,694,663 Total Revenue Requirements $2,940,749 $3,658,661 $3,948,039 $4,141,814 $4,265,727 Less Non-rate revenue
Other revenue $78,000 $78,000 $78,000 $78,000 $78,000
Subtotal $78,000 $78,000 $78,000 $78,000 $78,000
Uses of (additions to) Fund Balance -$62,251 -$52,315 -$54,659 -$58,126 -$61,872

Annual Requirements from Rates $3,642,912 $3,922,355 $4,118,473 $4,245,853 $4,373,229

4.7 Proposed Rates
As of the beginning of FY 2023/24, the City has an estimated combined $7.0 million in available operating and capital reserves. As discussed previously, this analysis assumes that the utility will use a combination of rate revenue and existing reserves to pay for the planned projects. To have sufficient funds to pay for increases in operating expenses, fund necessary capital improvements, repay the existing debt service, maintain appropriate debt service coverage requirements, and maintain the 6 months of operating expense in reserves, water rate increases will be required.

For this analysis, rate increases are introduced every year beginning in FY 2024/25. Table 4-7 presents the projected annual rate increases needed to meet the utility’s revenue requirements. The rate increases presented would be applied to both fixed and consumption charges and would impact all customer classes. Appendix B presents the water rate schedule for all customers for FY 2024/25-2028/29.

Table 4-7. Projected Annual Rate Increases
FY Annual Water Increase
FY 2024/25 60.0%
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-5
FY Annual Water Increase
FY 2025/26 5.0%
FY 2026/27 5.0%
FY 2027/288 3.0%
FY 2028/29 3.0%
Overall Increase[a] 87.1%
[a] Overall increase represents compounded increase over the analysis period.

4.8 Projected System Revenues
The revenue projections are made up of two major sources: rate revenues and non-rate revenues. In FY 2023/24, water rate revenues were estimated at $2.3 million. Other revenues are projected to amount to approximately $78,000 in FY 2023/24 and remain at this level throughout the study period.

Projected system rate revenues under existing rates are expected to remain constant over the analysis period. Revenues and the number of accounts has been relatively constant from FY 2020/21 through FY 2022/23. It was assumed this trend would continue through the analysis period. Projected system rate revenues, with the rate increases presented herein, are projected to increase from $2.3 million in FY 2023/24 to nearly $4.5 million in FY 2028/29. Table 4-8 provides the projected total system revenue with proposed rate adjustments.

Table 4-8. Projected Total System Revenue with Proposed Rate Adjustments FY
2023/24
FY
2024/25
FY
2025/26
FY
2026/27
FY
2027/28
FY
2028/29
Water Revenue $2,340,000 $3,642,912 $3,922,355 $4,118,473 $4,245,853 $4,373,229 Misc. Revenues $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 Total Revenue $2,418,000 $3,720,912 $4,000,355 $4,196,473 $4,323,853 $4,451,229 Operating and capital reserves will be drawn down to help pay for the planned capital projects and increased O&M expenses. City financial policies target a minimum of 6 months of operating expenses in operating reserves and an additional allowance of approximately $3.0 million capital reserves for unplanned capital needs.

Figure 4-3 presents the rate revenue requirements for the utility during the analysis period and projected revenues under existing and proposed rates. Rate revenue requirements consist of O&M expenses, administrative expenses, and debt service requirements. As Figure 4-3 illustrates, existing rate levels (green line) will not be sufficient to meet the projected revenue requirements and increases in rate revenues will be necessary to pay for projected costs.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-6
Figure 4-3. Revenue Requirements and Rate Revenues
Figure 4-4 presents the ending fund balance for the operating and capital reserve from FY 2023/24 through FY 2028/29. The capital reserve fund is drawn down in FY 2023/24 to pay for budgeted capital improvements. The revenues generated by the system are sufficient to maintain the 6-month operating reserve balance and capital fund target.

Figure 4-4. Ending Capital and Operating Reserve Balance Figure 4-5 presents the projected debt coverage for the water utility. The analysis shows that, with the proposed rates, the utility is projected to exceed the debt coverage requirements on the current bonded Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-7
debt of 125% in each year of the study period. The financial plan presented herein does not anticipate any new debt issues during the study period. Based on the proposed water rate increases, Jacobs projects that the City will generate sufficient revenue to cover its projected expenses and to meet any bond coverage requirements for FY 2023/24 through FY 2028/29.

Figure 4-5. Debt Service Coverage, Water Utility
Refer to Appendix C for projected sources and uses of funds for the utility for the analysis period.

4.9 Impact on Typical User Bills
Figure 4-6 shows the impact of the proposed FY 2024/25 to FY 2028/29 rates on the bills of typical residential users. Residential users that consume 4,500 gallons per month will see an increase in their water bills of $20.08 over the 5-year study period.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-8
Figure 4-6. Typical Residential Water Bill for 4,500 Gallons, Proposed Rates (FY 2024/25–FY 2028/29)

4.10 Alternative Water Rate Increase Scenario
Rate increases can be sculpted in several ways to achieve the goals of the utility. Instead of a large, one-time increase in Year 1 of the analysis, the increases could be phased in over a number of years to make the increases more levelized. Table 4-9 presents an alternative rate strategy that achieves the operating and capital reserve targets set by the utility. By the end of the analysis, the overall rate increase would be slightly higher when compared to the impacts of a one-time large increase in Year 1.

Table 4-9. Projected Annual Rate Increases, Scenario 1
FY Annual Water Increase
FY 2024/25 45.0%
FY 2025/26 20.0%
FY 2026/27 10.0%
FY 2027/28 3.0%
FY 2028/29 3.0%
Overall Increase[a] 103.1%
[a] Overall increase represents compounded increase over the analysis period.

Figure 4-7 presents the ending fund balance for the operating and capital fund under the alternative rate increase strategy. As mentioned previously, the alternative approach achieves the utility’s target fund balances for the operating and capital funds.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 4-9
Figure 4-7. Ending Capital and Operating Reserve Balance, Scenario 1 Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-2

5. Wastewater Rate Study
This section outlines the wastewater rate study.

5.1 Background Information
The Public Works Department’s Wastewater Division is responsible for the operations, maintenance, and capital infrastructure improvement for the City’s wastewater system. The Wastewater Division serves the residential, commercial, and industrial wastewater customers both within and outside the City limits.

The Public Works director supervises the daily operational activities of the Wastewater Division with 16 employees.

Like the water utility, the wastewater utility is an enterprise fund and charges service user fees to fund its operations and capital expenditures. The wastewater utility has both a wastewater operations fund and a capital improvement fund. The City’s Wastewater Division has three departments:
▪ Collections
▪ Treatment
▪ Administration
The wastewater utility is responsible for:
• Wastewater Collection
o Maintain 5,000 wastewater service connections
o Operate and maintain nine sewage lift stations
o Maintain 42 miles of collection system pipeline
• Wastewater Treatment:
o Operate and maintain the wastewater treatment facility (with capacity for 1.5 million gallons per day)
o Coordinate the pretreatment program
o Implement the sanitary wastewater management plan
▪ Fats, oil, and grease program
▪ Inflow and Infiltration reduction
o Process safety management plan
In addition, the Wastewater Operations Fund is required to have in reserves 180 days of operating expenses, and maintain a targeted balance of $5.0 million in the Capital Improvement fund.

The 2017 Revenue Bond issuance has a debt service coverage requirement of 1.25, which means the net revenues of the system (gross revenues minus operating expenses) must be 125% of the system’s annual debt service requirements.

5.1.1 Customer Data
Table 5-1 presents the wastewater customer accounts from 2021 through 2023. The data represents the average number of accounts for each customer class over the 12-month period. Customer accounts have remained relatively stable over the last 3 years with growth rates of about 1% and 0.5% in 2022 and 2023 respectively. The average number of accounts for 2023 is 4,260. Residential customers represent Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-3
approximately 92% of the total wastewater customers. The wastewater utility also receives flows from Palmer Creek Community Service District (CSD).

Table 5-1. Wastewater Customer Accounts, Calendar Year 2021-23 Rate Class 2021 2022 2023
Residential 1,881 1,911 1,951
Multi-Family 1,980 1,972 1,951
Mobile Home Park 3 3 3
Light Commercial 297 301 302
Medium Commercial 35 36 36
Heavy Commercial 12 13 13
Outside City Limit – Residential 3 3 3
Commercial / Residential Combo 1 1 1
Palmer Creed CSD 1 1 1
Total 4,213 4,241 4,261
Note: Customer data are for Calendar year (that is, January through December).

Table 5-2 presents wastewater sales revenues for calendar years 2021 through 2023. The revenues are for all active accounts during the 12-month period. The City provides wastewater service to residential, commercial, and industrial customers located inside and outside the City limits. Currently the City does not have any industrial wastewater customers. Customer wastewater bills are based on water consumption presented in Table 4-2. Palmer Creek CSD flows ranged from 6.3 million cubic feet in 2021 to 7.9 million cubic feet in 2023. Wastewater revenue increased from $3.5 million in 2021 to approximately $3.6 million in 2023. Residential, multi-family, and mobile home park customers accounted for nearly 78% of water revenues in 2023.

Table 5-2. Wastewater Customer Revenues, FY 2021-2023
Rate Class 2021 2022 2023
Residential $1,107,279 $1,100,740 $1,116,524
Multi-Family $1,422,556 $1,508,601 $1,492,220
Mobile Home Park $131,648 $144,428 $134,022
Light Commercial $398,070 $403,932 $384,876
Medium Commercial $235,389 $238,554 $239,739
Heavy Commercial $114,272 $121,951 $120,787
Outside City Limit – Residential $3.074 $2,901 $2,525
Commercial / Residential Combo $5,278 $6,036 $13,088
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-4
Palmer Creek CSD $54,539 $62,729 $68,624
Total $3,472,106 $3,589,872 $3,572,405
Note: Revenue data is for Calendar year (that is, January through December).

5.1.2 Existing Rates
Tables 5-3 present the current rate schedules for the City’s wastewater system. The monthly wastewater rates consist of a base rate and a volume charge. Customer classes include residential, commercial, industrial, and Palmer Creek CSD. Commercial customers are further classified into light, medium, or heavy categories based on the strength of their wastewater flows. The higher strength flows pay a higher rate compared to the lower strength flows because it costs more to treat higher strength flows.

The monthly base charge includes the first 500 cubic feet (ft3) for residential, light commercial, medium commercial and heavy commercial customers while it is the first 2,590 ft3for industrial and Palmer Creek CSD customers. Palmer Creek CSD pays slightly lower rates than other commercial customers as they operate their own collection and billing systems. Volume charges are based on actual wastewater usage with different variable rates for all categories of customers. The outside city customers pay 50% more than the rate for inside city customers.

Table 5-3. Current Wastewater Rates, Inside City
Existing
Service Charge FY 2023-24
Residential (includes first 500ft3) $38.75
Volume charge over 500 ft3($/ccf) $8.61
Light Commercial (includes first 500 ft3; strength factor <200 mg/l) $38.02 Volume charge over 500 ft3($/ccf) $8.45
Medium Commercial (includes first 500 ft3; strength factor between 200-500 mg/l) $49.02
Volume charge over 500 ft3($/ccf) $10.89
Heavy Commercial (includes first 500 ft3; strength factor >500 mg/l) $96.69 Volume charge over 500 ft3($/ccf) $21.49
Industrial (includes first 2590 ft3) $767.56
Volume charge over 2590 ft3($/ccf) $29.64
Palmer Creek CSD (includes first 2590 ft3) $168.02
Volume charge over 2590 ft3($/ccf) $6.49
Special Agreements
Residential, Commercial, and Industrial
BOD ($/lb) $1.36
TSS/ ($/lb) $1.25
Volume ($/ccf) $5.19
Palmer Creek CSD
BOD ($/lb) $1.23
TSS/ ($/lb) $1.13
Volume ($/ccf) $3.91

5.1.3 Historical Revenues
Figure 5-1 shows historical revenues for the wastewater utility for FY 2020/21 through FY 2022/23. Total system revenues were relatively stable and approximately $3.49 million in FY 2020/21, $3.5 million in FY Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-5
2021/22, and $3.5 million in FY 2022/23. Over the 3-year period, wastewater service charges accounted for at least 98% of the total revenue. The remaining non-rate revenue was generated by miscellaneous other charges and interest revenue.

Figure 5-1. Historical Revenues, FY 2020/21–2022/23

5.1.4 Historical Operation and Maintenance Expenses
The historical O&M expenses consist of all relevant costs for the operations and maintenance for the public wastewater system over the last 3 years. These include: personnel, utilities, materials, and supplies, overhead and administrative costs across collections, treatment, and administration units of the Wwastewater Division.

Table 5-4 summarizes the actual cash operating expenses, excluding depreciation and debt service expenses, from FY 2022/21 to FY 2022/23 and Budget FY 2023/24. Over the 3-year period, the operating expenses increased by 6.8% from $2.4 million in FY 2020/21 to $2.5 million in FY 2022/23.

Operating expenses for FY 2021/22 showed a decrease in overall expenses when compared to FY 2020/21. The primary reason for the decrease was a credit received from the State of California retirement system to account for a higher than normal rate of return on system investments. The FY 2023/24 has total expense for the wastewater utility increasing to approximately $3.0 million. The treatment cost center represents approximately 59% while collections and administration divisions account for 17% and 24% of the total expenses, respectively.

Table 5-4. Operation and Maintenance Expenses, FY 2021–2023 Division FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24
Collections
Salaries and Benefits $305,812 $348,301 $331,918 $354,543 Services and Supplies $34,135 $19,991 $56,800 $100,500
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-6
Division FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24
Capital Outlay $130,120 $0 $4,050 $40,000
Subtotal $470,067 $368,292 $392,768 $495,043
Treatment
Salaries and Benefits $663,743 $295,716 $626,298 $685,125 Services and Supplies $667,382 $773,908 $878,500 $915,000 Capital Outlay $4,478 $29,431 $25,000 $179,500
Subtotal $1,335,603 $1,099,055 $1,529,798 $1,779,625
Administration
Salaries and Benefits $411,408 $445,132 $432,498 $472,787 Services and Supplies $187,769 $182,128 $213,330 $258,011 Capital Outlay $0 $0 $0 $0
Subtotal $599,177 $627,260 $645,828 $730,798
Total $2,404,847 $2,094,607 $2,568,394 $3,005,466

5.2 Existing Debt Service Expenses
Existing debt service costs are the annual principal and interest payments associated with outstanding bonds. In November 2017, the City issued an $8.74 million Series 2017 Wastewater Revenue Bond to refund a previously issued series 2006 bond. For FY 2023/24, the principal and interest payments are approximately $695,000.

5.3 Revenue Requirements
Like the water system, the cash basis method was used to determine the revenue requirements of the wastewater system. The is imperative to ascertain that the revenues generated by the City is adequate to cover all its cash needs, and other financial obligations for the period of the analysis. The components of the City’s revenue requirements include:
▪ O&M expenses
▪ Pay-as-you-go capital
▪ Debt service requirements
The total wastewater system O&M expenses include salaries, materials, supplies, chemicals, and other daily operating expenses. For the purposes of these financial projections, the O&M expenses were separated into the following divisions:
▪ Collections
▪ Treatment
▪ Administration
Table 5-5 presents the projected operating expenses for the utility for the analysis period. The City’s operating expenses are budgeted to be approximately $3.0 million in FY 2023/24. Over the analysis period, O&M expenses are estimated to increase to approximately $3.9 million by FY 2028/29, a cumulative increase of 27% from FY 2023/24 levels.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-7
Table 5-5. Projected Operating Expenses
Cost Center
FY
2023/24
FY
2024/25
FY
2025/26
FY
2026/27
FY
2027/28
FY
2028/29
Collections
Salaries and Benefits $354,543 $362,247 $383,703 $406,861 $431,879 $458,929 Services and Supplies $100,500 $103,575 $106,745 $110,014 $113,384 $116,858 Capital Outlay $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 Subtotal $495,043 $505,822 $530,448 $556,875 $585,263 $615,787 Treatment
Salaries and Benefits $685,125 $702,298 $744,924 $790,985 $840,800 $894,717 Services and Supplies $915,000 $954,350 $994,268 $1,035,936 $1,079,433 $1,124,843 Capital Outlay $179,500 $188,475 $196,014 $203,855 $212,009 $220,489 Subtotal $1,779,625 $1,845,123 $1,935,206 $2,030,776 $2,132,242 $2,240,049 Administration
Salaries and Benefits $472,787 $475,966 $501,063 $527,994 $556,924 $588,030 Services and Supplies $258,011 $268,439 $279,315 $290,658 $302,489 $314,831 Capital Outlay $0 $0 $0 $0 $0 $0
Subtotal $730,798 $744,405 $780,378 $818,652 $859,413 $902,861 Total $3,005,466 $3,095,350 $3,246,032 $3,406,303 $3,576,917 $3,758,697

5.4 Debt Service
The system debt service requirements consist of the principal and interest payments on its outstanding debt. In addition, the covenants on the City’s outstanding debt requires the City to generate net revenues (gross revenues minus operating expenses) that are 1.25 times the annual debt service payments on its outstanding debt. Revenues in excess of the debt service and O&M costs can be used to pay for capital outlays. The Series 2017 Revenue Bonds have an annual debt service payment of approximately $695,094 in FY 2023/24 and remain relatively constant through FY 2028/29.

This analysis assumed new debt would be issued to pay for the wastewater treatment plant NPDES project.

The financial analysis assumes that the City will receive grants of $5.5 million and a state sponsored low interest loans to cover the costs associated with the CIP. The assumed bonds each have a term of 30 years, an interest rate of 1.72 percent. Figure 5-2 presents the projected annual debt service for existing and new debt over the analysis period. Annual debt service payments on existing and new debt are projected to increase from $695,000 in FY 2023/24 to approximately $2.0 million in FY 2028/29.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-8
Figure 5-2. Projected Annual Debt Service, Wastewater

5.5 Capital Improvements
The CIP for the City includes public wastewater system capital improvements that are needed to replace aging infrastructure and continue to meet forecast system demands. The utility plans to fund the wastewater system capital improvements from capital reserves and user rates. The City management will make necessary financial decisions to ensure capital reserves are sufficient to cover future capital expenditures. The largest planned expenditures for the water system during the analysis period are:
▪ National Pollutant Discharge Elimination System (NPDES) compliance project: $35.2 million ▪ Wastewater Lining Project: $3.0 million
▪ Sanitary Wastewater Collections System CCTV: $0.6 million ▪ Wastewater Grant Fund Projects: Hilltop Wastewater Main Project: $0.5 million ▪ Wastewater Lining Project: $1.0 million
Appendix A provides a list of projects included in the wastewater system CIP from FY 2023/24 through FY 2028/29. Total capital expenditures are estimated at $42.2 million (2023$). When the costs are adjusted for inflation, the total capital costs are approximately $48.5 million. Capital projects will be funded through a combination of reserves, rate revenue, debt financing, and grant funding.

5.6 Total System Revenue Requirements
Table 5-6 summarizes the revenue requirements for the analysis period. The total system rate revenue requirement is expected to range between $4.3 million in FY 2024/25 to $6.2 million through FY 2028/29. Rate increases will be necessary to pay for escalation in O&M expenses, new debt service requirements, cash funded capital outlays, and to provide sufficient working capital equal to approximately 6 months of operating expenses.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-9
Table 5-6. Projected Revenue Requirements
Projected Projected Projected Projected Projected
Item FY 2024/25 FY 2025/26 FY 2026/27 FY 2027/28 FY 2028/29 Revenue Requirements
O&M
Collection $505,822 $530,448 $556,875 $585,263 $615,787 Treatment $1,845,123 $1,935,206 $2,030,776 $2,132,242 $2,240,049 Administration $806,205 $844,032 $884,216 $926,944 $972,418 Other
Subtotal $3,157,150 $3,309,686 $3,471,867 $3,644,448 $3,828,254 Capital Costs
Existing Debt Service $688,094 $688,844 $688,594 $692,219 $689,719 New Debt Service $0 $322,000 $966,000 $1,288,000 $1,288,000 Transfer to Improvement
Fund
$3,192,306 $4,374,825 $4,205,925 $1,172,478 $1,190,574
Subtotal $3,880,400 $5,385,669 $5,860,518 $3,152,696 $3,168,293 Total Requirements $6,503,490 $7,037,550 $8,695,355 $9,332,385 $6,797,144 Less Non-rate revenue
Other revenue $51,000 $51,000 $51,000 $51,000 $51,000
Grant Revenue $0 $2,750,000 $2,750,000 $0 $0
Subtotal $51,000 $2,801,000 $2,801,000 $51,000 $51,000
Uses of (additions to) Fund
Balance
$2,243,490 -$75,223 -$79,979 -$85,109 -$90,644
Annual Requirements from
Rates
$4,743,060 $5,969,578 $6,611,364 $6,831,253 $7,036,190

5.7 Proposed Rates
As of the beginning of FY 2023/24, the City has an estimated combined $13.0 million in available operating and capital reserves, which includes approximately $1.5 million to cover 6 months of operating expenses. As discussed previously, this analysis assumes that the utility will use a combination of rate revenue and existing reserves to pay for the planned projects. It was also assumed the wastewater utility will received a grant from the SRF program of $5.5 million and also issue new debt to help pay for the NPDES wastewater treatment plant project. To have sufficient funds to pay for increases in operating expenses, repay the existing and new debt service, maintain appropriate debt service coverage requirements, and maintain the 6 months of operating expense in reserves, wastewater rate increases will be required.

For this analysis, rate increases are introduced every year beginning in FY 2024/25. Table 5-7 presents the projected annual rate increases needed to meet the utility’s revenue requirements. The rate increases presented would be applied to both fixed and consumption charges and would impact all customer classes. Appendix E presents the wastewater rate schedule for all customers for FY 2024/25 through FY 2028/29.

Table 5-7. Projected Annual Rate Increases
FY Annual Wastewater Increase
FY 2024/25 40.0%
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-10
FY Annual Wastewater Increase
FY 2025/26 25.0%
FY 2026/27 10.0%
FY 2027/28 3.0%
FY 2028/29 3.0%
Overall Increase[a] 104.2%
[a] Overall increase represents compounded increase over the analysis period.

5.8 Projected System Revenues
The revenue projections are made up of two major sources: rate revenues and non-rate revenues. In FY 2023/24, wastewater revenues were estimated at $2.3 million. Other revenues are projected to amount to approximately $51,000 in FY 2023/24 and remain at this level throughout the study period.

Projected system rate revenues under existing rates are expected to remain constant over the analysis period. Revenues and the number of accounts has been relatively constant from FY 2020/21 through FY 2022/23. It was assumed this trend would continue through the analysis period. Projected system rate revenues, including the rate increases presented herein, are projected to increase from $3.5 million in FY 2023/24 to nearly $7.1 million in FY 2028/29. Miscellaneous revenues are projected to average approximately $51,000 per year over the analysis period. Table 5-8 provides projected total system revenue with proposed rate adjustments.

Table 5-8. Projected Total System Revenue with Proposed Rate Adjustments FY
2023/24
FY
2024/25
FY
2025/26
FY
2026/27
FY
2027/28
FY
2028/29
Wastewater Revenue $3,450,000 $4,743,060 $5,969,578 $6,611,364 $6,831,253 $7,036,190 Misc. Revenues $46,000 $51,000 $51,000 $51,000 $51,000 $51,000 Total Revenue $3,496,000 $4,794,060 $6,020,578 $6,662,364 $6,882,253 $7,087,190 Operating and capital reserves will be drawn down to help pay for the planned capital projects and increased O&M expenses. City financial policies target a minimum of 6 months of operating expenses in operating reserves and an additional allowance of approximately $5.0 million in capital fund reserves.

Figure 5-3 presents the rate revenue requirements for the utility during the analysis period and projected revenues under existing and proposed rates. Rate revenue requirements consist of O&M expenses, administrative expenses, and debt service requirements. As Figure 5-3 illustrates, existing rate levels (green line) will not be sufficient to meet the projected revenue requirements and increases in rate revenues will be necessary to pay for projected costs.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-11
Figure 5-3. Revenue Requirements and Rate Revenues
Figure 5-4 presents the combined 6-month operating reserve and capital fund reserve from FY 2023/24 through FY 2028/29. The capital reserve fund is drawn down in FY 2023/24 to pay for budgeted capital improvements. The revenues generated by the system are sufficient to maintain the 6-month operating reserve balance.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-12
Figure 5-4. Ending Capital and Operating Reserve Balance Figure 5-5 presents the projected debt coverage for the wastewater utility. The analysis shows that, with the proposed rates, the utility is projected to exceed the debt coverage requirements on the current and new bonded debt of 125% in each year of the study period. The financial plan presented herein assumes new debt issues in FY 2025/26 and FY 2026/27 to help fund the wastewater treatment plant project.

Based on the proposed wastewater rate increases, Jacobs projects that the City will generate sufficient revenue to cover its projected expenses and to meet any bond coverage requirements for FY 2023/24 through FY 2028/29.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-13
Figure 5-5. Debt Service Coverage, Wastewater Utility
Appendix F provides projected sources and uses of funds for the utility for the analysis period.

5.9 Impact on Typical User Bills
Figure 5-6 shows the impact of the proposed FY 2024/25 to FY 2028/29 rates on the bills of typical residential users. Residential users that consume 6 CCF per month will see an increase in their monthly wastewater bills of approximately $40.00 over the 5-year study period.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-14
Figure 5-6. Typical Residential Wastewater Bill for 4,500 Gallons, Proposed Rates FY 2024/25 through FY 2028/29

5.10 Alternative Wastewater Rate Increase Scenario
Rate increases can be sculpted in several ways to achieve the goals of the utility. Instead of a large, one-time increase in Year 1 of the analysis, the increases could be phased in over a number of years to make the increases more levelized. Table 5-9 presents an alternative rate strategy that achieves the operating and capital reserve targets set by the utility. By the end of the analysis, the overall rate increase would be slightly higher when compared to the impacts of a one-time large increase in Year 1.

Table 5-9. Projected Annual Rate Increases, Scenario 1
FY Annual Water Increase
FY 2025 30.0%
FY 2026 30.0%
FY 2027 17.5%
FY 2028 3.0%
FY 2029 3.0%
Overall Increase[a] 110.7%
[a] Overall increase represents compounded increase over the analysis period.

Figure 5-7 presents the ending fund balance for the operating and capital fund under the alternative rate increase strategy. As mentioned previously, the alternative approach achieves the utility’s target fund balances for the operating and capital funds.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 5-15
Figure 5-7. Ending Capital and Operating Reserve Balance, Scenario 1 Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 6-16

6. Rates Comparison Across Communities
Figure 6-1 shows how the combined monthly water and wastewater bills for the City compare with other neighboring communities. Data was collected from publicly available information and are the current rates as of March 2024. The chart reveals that the current combined bills of the City are less than the average monthly bill for the surveyed communities. When the proposed first year rate increases are included, the City’s combined bill is still lower than most surveyed communities.

Figure 6-1. Comparison of the City’s Water and Wastewater Bills with Other Communities for 6 CCF of Water Consumed
Note: rates for each community are from March 2024
A customer who uses the minimum amount of water included in the water and wastewater base charge would experience an increase of their combined utility bill from $59.90 per month to $93.00 per month.

The combined water and wastewater monthly bill based on 6 ccf of water consumption was estimated through FY 2026-27 for the City and neighboring communities. Data beyond FY 2026-27 for the other surveyed communities was not always available. Some of the rate adjustments are considered proposed as they are from recent rate studies and it is unclear if the rates were adopted by each community. Based on available information of proposed future rate increases for other neighboring communities, other communities are also planning for future water and wastewater rate increases. By FY 2026-27, the City’s rates are projected to be one of the lowest of the communities surveyed.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. 6-17
Figure 6-2. Comparison of the City’s Water and Wastewater Bills with Other Communities for 6 CCF of Water Consumed, FY 2023-24 through FY 2026-27
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. A-2

7. Conclusions and Recommendations
Jacobs recommends that the City adjust its water and wastewater rates in each year from FY 2024/25 through FY 2028/29 to help ensure that sufficient revenues will be generated to meet current operating and capital needs, debt service requirements and other financial commitments, and to cover operating and capital reserve targets.

With the proposed rate adjustments presented herein, the City’s water and wastewater rates should generate sufficient revenues, under the forecast assumptions, to meet the water and wastewater systems’ needs through FY 2028/29. The mentioned rates include the assumption that the City will issue new debt to fund the wastewater treatment plant upgrade and will receive a grant of $5.5 million. All other projected CIP will be funded through available capital reserves and rate revenues.

In addition, Jacobs recommends:
▪ Review the financial plan regularly to confirm actual revenues and expenditures are tracking with the projections developed in this analysis. The City should review the financial plan annually and adjust the rates as needed to reflect current conditions and assumptions. The projected rate increases presented herein are based on the best available data and assumptions developed by the utility and Jacobs as of March 2024.
▪ The City should consider conducting a water and wastewater rate study after completion of the water system plan.
▪ Update the CIP for the water and wastewater utility. This process would include developing a list of priority projects, updating cost estimates, and creating a schedule of implementation. ▪ Consider implementing an inflationary adjustment for service fees and other charges to keep up with the rising costs of labor and materials when they have not gone through a more detailed review. The annual inflationary adjustment would follow a national, statewide, or local price index such as the CPI for all items for the State of California.
▪ Actively pursue other sources of funds to pay for the planned capital expenditures. While the grant process is very competitive, Jacobs recommends the City apply for grants through various state and federal agencies, as well as grants offered by other organizations. The utility may be able to secure a grant or principal forgiveness loan if the service area meets eligibility criteria. ▪ After adoption of the rate study, the City should proceed with notifying impacted property owners of the proposed rate increases. The notification mailer will begin the minimum 45 day protest period and will set the date for the Proposition 218 hearing.
▪ The City should proceed with adopting the proposed rates after completion of the Proposition 218 hearing and balloting process. The City should adopt the proposed rates if the rate increase is not opposed by a majority of property owners through the Proposition 218 balloting process.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. A-2

8. References
American Water Works Association. 2016. M1 Principles of Water Rates, Fees, and Charges, Seventh Edition. ISBN: 9781625761910. December 15.

City of Arcata. Water and Wastewater Rates.
https://www.cityofarcata.org/DocumentCenter/View/13271/2023-2024-Service-Agreement-- InstructionsCity of Eureka, CA. 2023 Water and Wastewater Rate and Connection Fee Study, Draft. November 2022.

City of Frio Dell. Water and Wastewater Rates.
https://www.cityofriodell.ca.gov/sites/g/files/vyhlif8526/f/uploads/water_and_wastewater_rates_effecti ve_july_1_2023_updated_6.23.23.pdf
Humbolt Community Service District. Water and Wastewater Rates. https://humboldtcsd.org/sites/default/files/2023-24%20Master%20Charge%20Schedule-09-12-2023- .pdf
McKinleyville Community Service District. Water and Wastewater Rates. https://mckinleyvillecsd.ca.gov/files/8c86edaa6/Wastewater+rates+effective+January+2023.pdf State of California, Department of Industrial Relations. California Consumer Price Index (1955-2023).

Available at http://www.dir.ca.gov/OPRL.

State of California, Real Estate Service Division. DGS California Construction Cost Index CCCI (2011-2024). https://www.dgs.ca.gov/RESD/Resources/Page-Content/Real-Estate-Services-Division-Resources-ListFolder/DGS-California-Construction-Cost-Index-CCCI.

Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. A-1
Appendix A. Water System Capital Improvement Plan
Project 2023 Cost
Year of
Construction
Budget FY
2023-24
Projected FY
2024-25
Projected FY
2025-26
Projected
FY 2026-27
Projected
FY 2027-28
Projected
FY 2028-29
Vancil Reservoir Site Rehabilitation Project $200,000 2024 $206,000 Corrosion Control Facility Piping & Well Replacement
Project
$300,000 2024 $309,000
Water Tank Recoating Project $600,000 2024 $618,000
Downtown Water Line Replacement Project-Design $160,000 2024 $164,800 Downtown Water Line Replacement ProjectConstruction$1,800,000 2025 $1,909,620 Drake Hill Road Water Main Replacement-Design $100,000 2025 $106,090 Drake Hill Road Water Main ReplacementConstruction$850,000 2026 $928,818 Lower Barney Drainage and Culvert Repair $100,000 2024 $103,000 Corrosion Control Facility Electrical Project $200,000 2026 $218,545 Kenmar & Drake Hill Pump Station Stationary GenSets $50,000 2024 $51,500 Water System Master Plan $150,000 2024 $154,500
Meadow Lane Main Replacement with C900 $220,000 2026 $240,400 12th St Water Main Project-Design $80,000 2026 $87,418
12th St Water Main Project-Construction $800,000 2027 $900,407 Carson Woods Road Water Line Replacement-Design $80,000 2027 $90,041 Carson Woods Road Water Line ReplacementConstruction$750,000 2028 $869,456 Kenmar & Drake Hill Pump Station Stationary GenSets $150,000 2024 $154,500 Waterline Replacement $1,000,000 2029 $1,194,052
Replace loader (share with wastewater) $125,000 2027 $140,689 Replace vaccon (share with wastewater) $275,000 2029 $328,364 Replace service truck (share with wastewater) $40,000 Annual $41,200 $42,436 $43,709 $45,020 $46,371 $47,762 Total $1,802,500 $2,058,146 $1,518,891 $1,176,157 $915,827 $1,570,179 Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. A-1
Appendix B. Projected Water Rates
Base Monthly Service Charge
Current
Rate
FY 2024-
25 FY 2025-
26 FY 2026-
27 FY 2027-
28 FY 2028-
29 Inside City - Meter Size
5/8" by 3/4" $23.04 $36.86 $38.71 $40.64 $41.86 $43.12
1" $44.07 $70.51 $74.04 $77.74 $80.07 $82.47
1 1/2" $87.21 $139.54 $146.51 $153.84 $158.45 $163.21
2" $147.61 $236.18 $247.98 $260.38 $268.20 $276.24
3" $320.16 $512.26 $537.87 $564.76 $581.71 $599.16
4" $561.73 $898.77 $943.71 $990.89 $1,020.62 $1,051.24
6" $1,251.95 $2,003.12 $2,103.28 $2,208.44 $2,274.69 $2,342.93 Volume charge over 300 cf
($/ccf) $1.90 $3.04 $3.19 $3.35 $3.45 $3.56
Volume charge for consumption exceeding 300 ft3in the winter; in summer months (May to October), consumption charge applied for usage exceeding 500 ft3.

Outside City Limits (1.5 times Inside City Rate)
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. C-1
Appendix C. Projected Sources and Uses of Funds, Water
Budget Projected Projected Projected Projected Projected Item FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 Sources of Funds
Beginning Balance $2,500,000 $1,039,667 $1,101,918 $1,154,233 $1,208,892 $1,267,018 Water Service Charges $2,340,000 $3,642,912 $3,922,355 $4,118,473 $4,245,853 $4,373,229 Other Charges $58,000 $58,000 $58,000 $58,000 $58,000 $58,000 Interest Revenue $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Total Sources of Funds $4,918,000 $4,760,579 $5,102,273 $5,350,706 $5,532,745 $5,718,247 Uses of Funds
Transmission & Distribution $704,482 $726,010 $761,291 $798,472 $838,148 $880,529 Pumping, Treatment & Storage $720,987 $752,432 $789,191 $826,660 $866,346 $908,409 Administration $682,744 $756,002 $790,045 $826,232 $864,738 $905,756 Existing Debt Service $395,900 $399,275 $397,025 $399,150 $395,650 $396,525 New Debt Service $0 $0 $0 $0 $0 $0
Capital Contribution $706,321 $1,024,942 $1,210,486 $1,291,299 $1,300,845 $1,298,138 Bond Issuance $0 $0 $0 $0 $0 $0
Debt Service Other Fee
Ending Fund Balance $0 $0 $0 $0 $0 $0
Operating contingency $1,039,667 $1,101,918 $1,154,233 $1,208,892 $1,267,018 $1,328,890 New Debt Service Reserve $0 $0 $0 $0 $0 $0
Total Uses of Funds $4,918,000 $4,760,579 $5,102,273 $5,350,706 $5,532,745 $5,718,247 Capital Improvement Fund
Beginning Balance $4,500,000 $4,221,720 $3,188,516 $2,880,112 $2,995,254 $3,380,273 Debt Proceeds $0 $0 $0 $0 $0 $0
Grant Funding $150,000 $0
Transfer from Water Operating Fund $1,374,220 $1,024,942 $1,210,486 $1,291,299 $1,300,845 $1,298,138 Subtotal $6,024,220 $5,246,662 $4,399,002 $4,171,411 $4,296,099 $4,678,411 CIP $1,802,500 $2,058,146 $1,518,891 $1,176,157 $915,827 $1,570,179 Transfer to Bond Reserve Fund $0 $0 $0 $0 $0 $0
Subtotal $1,802,500 $2,058,146 $2,058,146 $1,518,891 $1,176,157 $915,827 Ending Balance $4,221,720 $3,188,516 $2,880,112 $2,995,254 $3,380,273 $3,108,232 Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. C-2
Appendix D. Wastewater System Capital Improvement Plan
Budget Projected Projected Projected Projected Projected Project 2023 Cost
Year of
Construction FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 NPDES Compliance Project $2,000,000 2024 $2,100,000
NPDES Compliance Project - Construction $16,600,000 2026 $18,672,742 NPDES Compliance Project - Construction $16,600,000 2027 $19,419,652 Wastewater System Model & Master Plan $165,000 2024 $173,250 Wastewater Lining Project - Design $100,000 2024 $105,000 Wastewater Lining Project - Construction $1,500,000 2025 $1,653,750 Wastewater Lining Project - Design $100,000 2025 $110,250 Wastewater Lining Project - Construction $1,500,000 2026 $1,687,296 East Downtown Wastewater Replacement
Project (consider combine w/ downtown
wtr) $550,000 2026
$618,675
Treatment Plant PLC, VPN, and Hardware
Upgrades - Design $50,000 2027
$58,493
Treatment Plant PLC, VPN, and Hardware
Upgrades -Construction $350,000 2028
$425,829
P Street Wastewater Replacement Project $150,000 2024 $157,500 Sanitary Wastewater Collections System
CCTV $600,000 2024
$630,000
Wastewater Grant Fund Projects: Hilltop
Wastewater Main Project - Design $50,000 2027
$58,493
Wastewater Grant Fund Projects: Hilltop
Wastewater Main Project -Construction $450,000 2028
$547,494
Wastewater Lining Project $1,000,000 2029 $1,265,319
Replace loader (share with water) $125,000 2027 $146,232 Replace vaccon (share with water) $275,000 2029 $347,963 Replace service truck (share with water) $40,000 Annual $42,000 $44,100 $44,995 $46,794 $48,666 $50,613 Total $42,205,000 $3,207,750 $1,808,100 $21,023,708 $19,729,665 $1,021,988 $1,663,895 Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. C-3
Appendix E. Projected Wastewater Rates
Monthly Base Charge Current Rate FY2024-25 FY2025-26 FY2026-27 FY2027-28 FY2028-29 Residential (includes first 500 cf) $38.75 $54.25 $67.81 $74.59 $76.83 $79.14 Light Commercial (includes first 500 cf;
strength factor <200 mg/l) $38.02 $53.23 $66.54 $73.19 $75.38 $77.65 Medium Commercial (includes first 500 cf;
strength factor bewteen 200-500 mg/l) $49.02 $68.63 $85.79 $94.36 $97.19 $100.11 Heavy Commercial (includes first 500 cf;
strength factor >500 mg/l) $96.69 $135.37 $169.21 $186.13 $191.71 $197.46 Industrial (includes first 2590 cf) $767.56 $1,074.58 $1,343.23 $1,477.55 $1,521.88 $1,567.54 Palmer Creek CSD (includes first 2590 cf) $168.02 $235.23 $294.04 $323.44 $333.14 $343.14 Volume Rate
Residential (includes first 500 cf) $8.61 $12.05 $15.07 $16.57 $17.07 $17.58 Light Commercial (includes first 500 cf;
strength factor <200 mg/l) $8.45 $11.83 $14.79 $16.27 $16.75 $17.26 Medium Commercial (includes first 500 cf;
strength factor bewteen 200-500 mg/l) $10.89 $15.25 $19.06 $20.96 $21.59 $22.24 Heavy Commercial (includes first 500 cf;
strength factor >500 mg/l) $21.49 $30.09 $37.61 $41.37 $42.61 $43.89 Industrial (includes first 2590 cf) $29.64 $41.50 $51.87 $57.06 $58.77 $60.53 Palmer Creek CSD (includes first 2590 cf) $6.49 $9.09 $11.36 $12.49 $12.87 $13.25 Special Agreements
Residential, Commercial, and Industrial
BOD ($/lb) $1.36 $1.90 $2.38 $2.62 $2.70 $2.78
TSS/ ($/lb) $1.25 $1.75 $2.19 $2.41 $2.48 $2.55
Volume ($/ccf) $5.19 $7.27 $9.08 $9.99 $10.29 $10.60
Palmer Creek CSD
BOD ($/lb) $1.23 $1.72 $2.15 $2.37 $2.44 $2.51
TSS/ ($/lb) $1.13 $1.58 $1.98 $2.18 $2.24 $2.31
Volume ($/ccf) $3.91 $5.47 $6.84 $7.53 $7.75 $7.99
Water and Wastewater User Rate Study
Jacobs Engineering Group Inc. C-4
Appendix F. Projected Sources and Uses of Funds, Wastewater Budget Projected Projected Projected Projected Projected Item FY 2023-24 FY 2024-25 FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 Sources of Funds
Beginning Balance $4,000,000 $3,800,440 $1,556,951 $1,632,174 $1,712,153 $1,797,262 Service Charges $3,450,000 $4,743,060 $5,969,578 $6,611,364 $6,831,253 $7,036,190 Other Revenue $26,000 $26,000 $26,000 $26,000 $26,000 $26,000 Interest Revenue $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 Grant Revenue $0 $0 $2,750,000 $2,750,000 $0 $0
Total Sources of Funds $7,501,000 $8,594,500 $10,327,529 $11,044,538 $8,594,406 $8,884,452 Uses of Funds
Collection $495,043 $505,822 $530,448 $556,875 $585,263 $615,787 Treatment $1,779,625 $1,845,123 $1,935,206 $2,030,776 $2,132,242 $2,240,049 Administration $730,798 $806,205 $844,032 $884,216 $926,944 $972,418 Existing Debt Service $695,094 $688,094 $688,844 $688,594 $692,219 $689,719 New Debt Service $0 $0 $322,000 $966,000 $1,288,000 $1,288,000 Capital Contribution $0 $3,192,306 $4,374,825 $4,205,925 $1,172,478 $1,190,574 Ending Fund Balance $2,318,293 $0 $0 $0 $0 $0
Operating contingency $1,482,148 $1,556,951 $1,632,174 $1,712,153 $1,797,262 $1,887,906 Debt Service Reserve $0 $0 $0 $0 $0 $0
Total Uses of Funds $7,501,000 $8,594,500 $10,327,529 $11,044,538 $8,594,406 $8,884,452 Capital Improvement Fund
Beginning Balance $9,000,000 $5,792,250 $7,176,456 $5,527,573 $5,003,832 $5,154,322 Debt Proceeds $0 $0 $15,000,000 $15,000,000 $0 $0
Transfer from Wastewater Fund $0 $3,192,306 $4,374,825 $4,205,925 $1,172,478 $1,190,574 Subtotal $9,000,000 $8,984,556 $26,551,281 $24,733,497 $6,176,310 $6,344,895 CIP $3,207,750 $1,808,100 $21,023,708 $19,729,665 $1,021,988 $1,663,895 Bond Issuance Cost $0 $0 $0 $0 $0 $0
Transfer to Bond Reserve Fund $0 $0 $0 $0 $0 $0
Subtotal $3,207,750 $1,808,100 $21,023,708 $19,729,665 $1,021,988 $1,663,895 Ending Balance $5,792,250 $7,176,456 $5,527,573 $5,003,832 $5,154,322 $4,681,001