Agenda — Garden Grove City Council, November 28, 2023 (part 2 of 3)

CITY OF GARDEN GROVE
GGFEFM002 Warrant Register Payroll
Check Dates Nov 16, 2023
Report Generated on Nov 15, 2023 4:02:22 PM Page 16
Check Vendor # Vendor Name Issue Date Check Amount
00031560 E05010 GALVAN, EDGAR 11/16/2023 $983.26 00031561 E04754 GARCIA, ALICIA R 11/16/2023 $1,538.41 00031562 E04677 GIROUARD, CASEY G 11/16/2023 $1,645.53 00031563 E05156 GOMEZ HERNANDEZ, RICARDO 11/16/2023 $978.27 00031564 E04629 GOMEZ, DIANA 11/16/2023 $894.92 00031565 E03341 GONZALEZ, JORGE 11/16/2023 $1,291.36 00031566 E03400 GREENE, MICHAEL R 11/16/2023 $2,440.03 00031567 E03685 GUZMAN, JESSE 11/16/2023 $619.55 00031568 E04299 HANSEN, AARON R 11/16/2023 $2,039.54 00031569 E03523 HARO, GLORIA A 11/16/2023 $1,280.54 00031570 E03759 HERNANDEZ, HERMILO 11/16/2023 $0.00 00031571 E04622 HOFER, ALICIA M 11/16/2023 $2,041.54 00031572 E04347 HSIEH, NICOLAS C 11/16/2023 $3,666.62 00031573 E03588 HUYNH, HUY HOA 11/16/2023 $2,466.12 00031574 E04831 ILFELD, MATTHEW D 11/16/2023 $2,101.33 00031575 E01907 JACOT, ROSEMARIE 11/16/2023 $2,392.57 00031576 E04296 JOHNSON, ERIC W 11/16/2023 $2,050.29 00031577 E04979 JURADO, MICHAEL 11/16/2023 $1,595.89 00031578 E04470 KAYLOR, BRENT 11/16/2023 $3,119.97 00031579 E04728 KHALIL, MARK M 11/16/2023 $2,289.89 00031580 E03534 KIM, SAMUEL K 11/16/2023 $4,560.43 00031581 E05115 KOUTSOYANOPULOS, ALDOCHRIS V 11/16/2023 $1,437.80 00031582 E04382 KWIATKOWSKI, BRYAN D 11/16/2023 $2,142.61 00031583 E02852 LADNEY, MARK W 11/16/2023 $2,906.41 00031584 E04769 LAMAS, LEONEL A 11/16/2023 $1,385.39 00031585 E03813 LEWIS, SHAN L 11/16/2023 $3,181.13 00031586 E03301 LEYVA, RAUL 11/16/2023 $3,716.79 00031587 E05065 LOMELI, JONATHAN 11/16/2023 $1,553.62 00031588 E05155 LOPEZ, MOISES 11/16/2023 $1,026.80 00031589 E05006 MARQUEZ, STEVEN ADAM 11/16/2023 $1,592.60 00031590 E05364 MARU, NAVIN B 11/16/2023 $5,335.58 00031591 E04665 MEJIA, DIEGO A 11/16/2023 $2,166.98 00031592 E03493 MENDEZ, RIGOBERTO 11/16/2023 $2,251.07 00031593 E04998 MENDOZA, LAURA 11/16/2023 $1,078.81 00031594 E04724 MOORE, DOUGLAS A 11/16/2023 $2,849.16 Server Name: cognos.ggcity.org User Name: victoriac

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CITY OF GARDEN GROVE
GGFEFM002 Warrant Register Payroll
Check Dates Nov 16, 2023
Report Generated on Nov 15, 2023 4:02:22 PM Page 17
Check Vendor # Vendor Name Issue Date Check Amount
00031595 E04827 MORELAND, ANDREW J 11/16/2023 $1,612.61 00031596 E04222 MOSS, DANIEL C 11/16/2023 $1,753.64 00031597 E01243 MURRAY JR, WILLIAM E 11/16/2023 $6,983.24 00031598 E04634 NAVARRO, JUAN C 11/16/2023 $3,224.11 00031599 E04969 ORNELLAS, MICHAEL 11/16/2023 $1,072.96 00031600 E03378 ORTIZ, STEVEN T 11/16/2023 $3,113.21 00031601 E04999 ORTUNO, ANIBAL 11/16/2023 $2,073.44 00031602 E05114 PACE, FRANK D 11/16/2023 $923.73 00031603 E03754 PINKSTON, RICHARD L 11/16/2023 $2,641.86 00031604 E05112 POE, HEIDI L 11/16/2023 $2,983.23 00031605 E04567 POWELL, AUSTIN H 11/16/2023 $2,764.56 00031606 E03799 QUIROZ, ROLANDO 11/16/2023 $3,317.40 00031607 E05031 RAMIREZ, AACIN 11/16/2023 $2,089.18 00031608 E04572 REED, MELVIN P 11/16/2023 $2,064.02 00031609 E02058 REYES, DELFRADO C 11/16/2023 $1,356.41 00031610 E04295 ROBLES, RAFAEL 11/16/2023 $2,982.14 00031611 E04563 RODRIGUEZ, ADRIANNA M 11/16/2023 $1,328.75 00031612 E05141 RODRIGUEZ, JOY R 11/16/2023 $865.07 00031613 E05004 RUELAS, SERGIO 11/16/2023 $2,327.36 00031614 E04289 SALDIVAR, RICARDO 11/16/2023 $1,578.07 00031615 E04505 SANTOS, MICHAEL F 11/16/2023 $3,502.01 00031616 E05166 SEVELU, FAASEGA J 11/16/2023 $949.25 00031617 E04836 SOTO, WILLIAM A 11/16/2023 $2,627.12 00031618 E05089 STAIR, DEAN T 11/16/2023 $932.90 00031619 E05171 STRAMBEANU, ALEXANDRU E 11/16/2023 $654.82 00031620 E03091 SUDDUTH, STEPHEN D 11/16/2023 $3,058.90 00031621 E01625 TAPIA, LUIS A 11/16/2023 $3,115.51 00031622 E04756 TARIN, ALEXIS P 11/16/2023 $0.00 00031623 E03239 TAUANU U, STEVE J 11/16/2023 $0.00 00031624 E05154 TELLO, ALEJANDRO 11/16/2023 $744.46 00031625 E04773 THURMAN JR, EDWIN O 11/16/2023 $1,406.03 00031626 E08679 THURMAN, RODERICK 11/16/2023 $1,991.90 00031627 E04825 TRUJILLO, JOSEPH E 11/16/2023 $1,703.68 00031628 E02482 UPHUS, MARK P 11/16/2023 $4,691.22 00031629 E03681 VASQUEZ, JOSE A 11/16/2023 $2,851.51 Server Name: cognos.ggcity.org User Name: victoriac

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CITY OF GARDEN GROVE
GGFEFM002 Warrant Register Payroll
Check Dates Nov 16, 2023
Report Generated on Nov 15, 2023 4:02:22 PM Page 18
Check Vendor # Vendor Name Issue Date Check Amount
00031630 E05136 VASQUEZ, PEDRO 11/16/2023 $1,341.64 00031631 E05134 VEGA, ERIC J 11/16/2023 $918.01 00031632 E02942 VERA, EVARISTO 11/16/2023 $2,050.54 00031633 E03727 VERGARA NEAL, ANA G 11/16/2023 $3,198.79 00031634 E05093 VIRAMONTES, ALEXANDRA 11/16/2023 $2,892.91 00031635 E01580 VU, DAI C 11/16/2023 $4,744.70 00031636 E04362 VU, KHANG L 11/16/2023 $3,426.80 00031637 E04006 WILLIAMS, RICHARD L 11/16/2023 $3,115.71 00031638 E05023 YNIGUEZ, KARISSA N 11/16/2023 $2,630.83 00031639 E05169 ZAMORA, JOEL D 11/16/2023 $1,263.83 00031640 E03436 ZIEGLER, RICK S 11/16/2023 $523.58 00031641 E03917 ALLEN, CHRISTOPHER L 11/16/2023 $77.20 00031642 E04163 AMBRIZ GARCIA, EDWARD D 11/16/2023 $1,558.96 00031643 E04063 BERGER, JAN 11/16/2023 $2,677.99 00031644 E00651 BERMUDEZ, ROBERT P 11/16/2023 $3,618.65 00031645 E03495 BLAS, VICTOR T 11/16/2023 $3,368.02 00031646 E00070 CANNON, TIM P 11/16/2023 $4,380.93 00031647 E04365 DAN, CARINA M 11/16/2023 $2,685.62 00031648 E04440 DAVIS, RYAN H 11/16/2023 $1,630.85 00031649 E03145 DE LA ROSA, FRANK X 11/16/2023 $330.53 00031650 E03051 DIEMERT, RONALD W 11/16/2023 $2,969.84 00031651 E02718 ESCOBAR, CHRIS N 11/16/2023 $3,641.93 00031652 E03688 GLENN, JEREMY J 11/16/2023 $1,791.20 00031653 E01618 GOMEZ, JOSE 11/16/2023 $2,293.04 00031654 E02701 GONZALEZ, ALEJANDRO 11/16/2023 $3,639.08 00031655 E03763 GRIFFIN, LARRY 11/16/2023 $2,913.73 00031656 E04828 GUERRERO, MICHAEL V 11/16/2023 $1,917.13 00031657 E04018 HAENDIGES, ROBERT A 11/16/2023 $2,285.44 00031658 E03575 HART, RYAN S 11/16/2023 $3,349.73 00031659 E03399 HOWENSTEIN, FRANK D 11/16/2023 $2,640.47 00031660 E03406 HUY, EDWARD A 11/16/2023 $3,157.66 00031661 E03446 JIMENEZ, VIDAL 11/16/2023 $2,372.11 00031662 E04782 JIN, LIYAN 11/16/2023 $2,822.49 00031663 E03254 KIRZHNER, ALLEN G 11/16/2023 $3,823.79 00031664 E03988 LI, REBECCA PIK KWAN 11/16/2023 $4,231.84 Server Name: cognos.ggcity.org User Name: victoriac

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CITY OF GARDEN GROVE
GGFEFM002 Warrant Register Payroll
Check Dates Nov 16, 2023
Report Generated on Nov 15, 2023 4:02:22 PM Page 19
Check Vendor # Vendor Name Issue Date Check Amount
00031665 E02063 MA AE, DAVID 11/16/2023 $2,266.48 00031666 E03249 MANSON, RAQUEL K 11/16/2023 $3,049.21 00031667 E04837 MARTINEZ, ALFREDO 11/16/2023 $2,166.01 00031668 E02124 MEISLAHN, TYLER 11/16/2023 $2,171.43 00031669 E04403 MONTGOMERY, JESSE K 11/16/2023 $2,420.62 00031670 E03590 MOYA JR, STEVEN J 11/16/2023 $800.75 00031671 E03519 MURAD, BASIL G 11/16/2023 $3,469.59 00031672 E03144 NATLAND, KIRK L 11/16/2023 $1,666.30 00031673 E04291 NGUYEN, DUC TRUNG 11/16/2023 $2,349.22 00031674 E04904 NGUYEN, LISA 11/16/2023 $1,172.97 00031675 E03221 NICOLAE, CORNELIU 11/16/2023 $3,725.26 00031676 E04210 NUNES, BRANDON S 11/16/2023 $2,039.84 00031677 E03923 ORNELAS, ANDREW I 11/16/2023 $2,716.09 00031678 E03582 ORTEGA, DAVID A 11/16/2023 $2,897.23 00031679 E03578 PASILLAS, CELESTINO J 11/16/2023 $3,219.04 00031680 E03170 PEARSON, WILLIAM F 11/16/2023 $2,490.50 00031681 E05161 PIINUU, EVANDEMITRI 11/16/2023 $1,313.83 00031682 E04805 POLIDORI, JESSICA J 11/16/2023 $3,676.11 00031683 E02500 PORRAS, STEPHEN 11/16/2023 $4,113.42 00031684 E07590 RUITENSCHILD, LES A 11/16/2023 $3,465.18 00031685 E03926 RUIZ, JONATHAN 11/16/2023 $12,738.09 00031686 E05165 SANCHEZ, ALLEN J 11/16/2023 $850.17 00031687 E07690 SANTOS, ALEXIS 11/16/2023 $2,217.73 00031688 E07692 SARMIENTO, ADRIAN M 11/16/2023 $2,814.81 00031689 E04956 SON, TOMMY T 11/16/2023 $2,121.91 00031690 E04301 TALAMANTES JR, ALBERT 11/16/2023 $2,441.22 00031691 E04121 TRAN, MINH K 11/16/2023 $2,555.45 00031692 E08881 VALENZUELA, ALEJANDRO N 11/16/2023 $5,542.51 00031693 E01882 VIRAMONTES, JESSE 11/16/2023 $1,987.77 00031694 E04195 WOLLAND, RONALD J 11/16/2023 $1,919.51 00031695 E09940 YERGENSEN, VICTOR K 11/16/2023 $2,570.60 00031696 E09954 ZAVALA, JOHN 11/16/2023 $2,699.63 00031697 E05099 BECK, CRAIG A 11/16/2023 $3,459.92 00031698 E00740 BLODGETT, GREG 11/16/2023 $5,565.02 00031699 E01338 CARRENO, SHAUNA J 11/16/2023 $2,082.19 Server Name: cognos.ggcity.org User Name: victoriac

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CITY OF GARDEN GROVE
GGFEFM002 Warrant Register Payroll
Check Dates Nov 16, 2023
Report Generated on Nov 15, 2023 4:02:22 PM Page 20
Check Vendor # Vendor Name Issue Date Check Amount
00031700 E03808 CHENG, ALANA R 11/16/2023 $3,034.08 00031701 E03353 COVARRUBIAS, MONICA 11/16/2023 $3,803.59 00031702 E05102 FLORES CRUZ, LAURA 11/16/2023 $2,054.17 00031703 E03697 GUERRERO, PAUL 11/16/2023 $3,704.41 00031704 E04750 HO, VY D 11/16/2023 $1,978.42 00031705 E04968 HONG, SEUNGBUM 11/16/2023 $1,933.69 00031706 E02612 KLOESS, VILMA C 11/16/2023 $2,938.26 00031707 E01949 LE, IVY 11/16/2023 $2,014.87 00031708 E05092 LE, LINH D 11/16/2023 $2,261.39 00031709 E01280 LE, TAMMY 11/16/2023 $1,775.57 00031710 E03617 LEE, GRACE E 11/16/2023 $3,091.17 00031711 E05159 LUNA-REYNOSA, URSULA 11/16/2023 $6,555.36 00031712 E05180 MEDINA, MELANIE 11/16/2023 $1,337.53 00031713 E05828 MIDDENDORF, LINDA 11/16/2023 $3,716.05 00031714 E02895 MOURE, SVETLANA 11/16/2023 $2,650.73 00031715 E05181 NGUYEN, DAVID 11/16/2023 $1,525.67 00031716 E03255 NGUYEN, PHUONG VIEN T 11/16/2023 $2,324.29 00031717 E02560 NGUYEN, QUANG 11/16/2023 $2,844.47 00031718 E01286 NGUYEN, TINA T 11/16/2023 $2,431.82 00031719 E03541 PHI, THYANA T 11/16/2023 $3,027.09 00031720 E05106 ROMERO, ALEX 11/16/2023 $1,977.13 00031721 E04408 THRONE, TIMOTHY E 11/16/2023 $2,442.25 00031722 E02543 TO, TANYA L 11/16/2023 $1,765.32 00031723 E01971 TRAN, CUONG K 11/16/2023 $2,505.90 00031724 E02056 TRUONG, ELAINE 11/16/2023 $1,902.41 00031725 E02562 VO, THANH-NGUYEN 11/16/2023 $1,806.72 00031726 E05104 YANG, DANA DAEUN 11/16/2023 $2,257.29 EFT - Total $1,770,357.36
Overall - Total $1,778,658.85
Server Name: cognos.ggcity.org User Name: victoriac

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Agenda Item - 5.a.

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM
To: Lisa L. Kim From: William E. Murray
Dept.: City Manager Dept.: Public Works
Subject: Introduction and First
Reading of an Ordinance
Enacting Adjustments in
Water Rates and Charges and
Authorizing Future Automatic
Adjustments in Water Rates
to Account for Adopted
Increases or Decreases in
Wholesale Charges the City
Pays to Other Agencies for
Water
Date: 11/28/2023

OBJECTIVE
For City Council to hold a Public Hearing and introduce for first reading and adoption for the attached Ordinance authorizing adjustments in water rates and charges and authorizing future automatic adjustments in water rates to account for adopted increases or decreases in wholesale charges the City pays to other agencies for water, and making a minor clarification to the provision pertaining to meter failures.

BACKGROUND
In March 2023, the City Council approved the hiring of a consulting firm, FG Solutions, to develop a five-year water financial plan to study the Water Enterprise’s financial condition and make recommendations for maintaining the financial stability to the Water Enterprise Fund. The study and analysis shows that expenditures are projected to significantly exceed revenues. This will result in the City spending reserves to pay for capital replacement and improvement projects. Without the proposed adjustments in water rates and charges, available reserves will be depleted in one to two years.

The current financial condition has caused the Water Enterprise to postpone and delay needed capital replacements and improvement projects. Revenue increases are also necessary to ensure that the Water Enterprise meets and its bond covenants.

The study concludes that to properly maintain the system’s aging infrastructure, and enable the Water Enterprise Fund to reach financial stability, rate adjustments are necessary.

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The ordinance further makes a minor clarification to the provisions relating to meter failures.

DISCUSSION
Water Rate Adjustments

The Water Rate Study has identified the overall revenue needs for financing of the operations, capital improvements and debt obligations of the Water Enterprise through:

1. Evaluating existing policies and procedures affecting water rates.

2. Evaluating adequacy of projected revenues under existing rates to meet projected revenue requirements.

3. Developing a sound financial plan for covering a five-year study for ongoing operations, planned capital improvements and complying with federal and state mandates. Developing a suitable schedule of water rates that produce revenues adequate to meet financial needs and business principles adopted by the City Council.

The study concludes that additional funds are needed to meet the minimum financial, regulatory, operational, public health and safety, and moral obligations entrusted to the City by the community. Upon the last year of the five-year implementation period, the proposed rate adjustment will amend the bi-monthly service charge for 5/8 x 3/4 meters (typical residential meter size) from $33.85 to $43.68, the capital improvements charge from $7.00 to $9.20, and a usage charge of $3.26 to $4.27 per unit of water use up to a maximum use of 33 units. This would result in the water portion of the bill increasing from $112.57 to $146.81 for the average residential customer (22 units) on a bi-monthly bill over the course of five years. Private fire service rates will also be adjusted for all meter sizes from 1.5” to 10”. These proposed rates will replace the existing private fire service rates and are shown on the attached draft Ordinance.

As a result of the Water Rate Study, the City is proposing the adoption of automatic annual adjustments to the first three water rate components (1. Minimum charge based on meter size, 2. Capital improvement charge, and 3. Commodity charge) and the fire service rate over a five-year period. The City is also proposing to re-adopt the automatic adjustments to the commodity delivery charge for water usage to pass future increases or decreases in wholesale water charges to customers for a five-year period.

These water rate components would be adjusted after the next regularly scheduled meter reading, following the date on which the City’s ordinance establishing the rates becomes effective on January 11, 2024. Subsequent scheduled rate increases will become effective on January 1 of each year, commencing January 1, 2025, without further action by the City Council. However, a 30-day notice will be provided to each customer prior to each increase for the commodity charge. The proposed rates are contained in the attached draft Ordinance.

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The total fee charged is calculated based upon the funds required by the City to maintain and operate the City’s water system, repay bond indebtedness, and to comply with new and existing regulations imposed by state and federal agencies.

The basic procedure for increasing water rates is as follows:

a) A Public Hearing is held on the matter. Notice of Public Hearing on the water rate increase was given 45 days in advance of the Public Hearing to the record owners of each identified piece of real property within the Water Enterprise pursuant to Proposition 218;

b) Property owners within the Water Enterprise boundaries have the right to file a written protest against the increase; and

c) If more than a simple majority of the total number of property owners file protests against the water rate increase, then the increase may not be instituted (the total number of parcels is 37,600).

Clarification to Provision Regarding Charges After Meter Failures

If a meter is found to have operated improperly during any period, the City calculates the charge based on the average daily consumption for the property according to the the same season in the previous year when the meter was operating properly. The ordinance revises section 14.12.050 of the Code to state this policy clearly.

FINANCIAL IMPACT
The proposed authorization for future water rate adjustments will allow the Water Enterprise to continue to meet its financial obligations and to carry out its capital improvement and replacement programs.

RECOMMENDATION
It is recommended that the City Council:

Hold a Public Hearing to hear testimony and receive written protests from property owners regarding the proposed authorization for future adjustments to water rates and charges; and

In the absence of a majority protest, introduce and pass to second reading the attached Ordinance implementing future adjustments and making corresponding organizational and clarifying changes to Garden Grove Municipal Code Section

14.12.010 and 14.12.030.

By: Samuel Kim, P.E., Deputy Public Works Director/ Water Services Manager ATTACHMENTS:

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•
•
Description Upload Date Type File Name
Ordinance 11/15/2023 Ordinance GG_Water_Rate_Ordinance_-_Final.pdf Water Rate
Study Report 11/13/2023 Exhibit FINAL_Garden_Grove_Water_Rate_Study_Report_11132023.pdf

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ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GARDEN GROVE AMENDING SECTIONS 14.12.010, 14.12.030, AND 14.12.050 OF CHAPTER 14.12 OF TITLE 14 (“WATER”) OF THE MUNICIPAL CODE RELATING TO WATER RATES AND

CHARGES, AND METER FAILURES

City Attorney’s Summary

This Ordinance amends Sections 14.12.010, 14.12.030, and 14.12.050 of the Garden Grove Municipal Code to authorize, for a period of five (5) years, future adjustments in the Bi-Monthly Minimum Charge, Capital Improvement Charge, Commodity Delivery Charge, and Private Fire Service Charge of water rates and future automatic adjustments to reflect adopted increases or decreases in wholesale charges for water established by other public agencies from which the City purchases water. The Ordinance further makes a minor clarification to the provision pertaining to meter failures.

THE CITY COUNCIL FINDS AND DECLARES AS FOLLOWS:

WHEREAS, FG Solutions prepared a Water Rate Study on behalf of the City, which evaluated the Water Enterprise’s financing needs, determined the estimated funds needed to adequately finance the operations, capital improvements and debt obligations for the Water Enterprise, reasonably allocated the Water Enterprise’s projected revenue requirements to the various customer classes in accordance with their respective service requirements, and recommended a suitable schedule of water rates that produce revenues adequate to meet the Water Enterprise’s financial needs in accordance with estimated reasonable customer costs of service;

WHEREAS, Government Code Section 53756 authorizes any agency providing water service to adopt a schedule of fees or charges for a period not to exceed five (5) years authorizing automatic adjustments that pass through increases or decreases in wholesale charges for water established by another public agency from which it purchases water;

WHEREAS, the City Council has determined, based on the findings and recommendations of City Staff and FG Solutions and the legislative findings herein, that, in order to adequately finance the operations, capital improvements and debt obligations for the Water Enterprise, (i) annual adjustments to the Bi-Monthly Minimum Charge, the Capital Improvement Charge, Commodity Delivery Charge, and Private Fire Service Charge, set forth in Subsections (A), (B), and (C) of Section 14.12.010 and in Section

14.12.030 over a five (5) year period as recommended by FG Solutions should be authorized, and (ii) Subsection (F) of Section 14.12.010 should be re-adopted for automatic adjustments to the Commodity Delivery Charge for water usage that pass through future increases in wholesale water charges for a five (5) year period;

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Garden Grove City Council
Ordinance No. _____

Page 2 ends

WHEREAS, the City Council has determined the following with regard to the rates and charges for water usage established by this Ordinance: (i) the fees and charges are not imposed as a condition of approval of a development project, as defined in California Government Code section 66001; (ii) the fees and charges are established upon a rational basis between the fees charged each customer and the service and facilities provided to each customer of the City’s Water Enterprise; (iii) the revenues derived from the fees and charges do not exceed the estimated reasonable cost to provide the capital facilities and water services for which they are levied; (iv) the revenues derived from the fees and charges shall not be used for any other purpose than that for which the fees and charges are imposed; (v) the fees and charges do not exceed the proportional cost of the water service attributable to each consumer; (vi) the fees and charges are imposed on water services which are immediately available to the consumer; (vii) the fees and charges are not levied for general governmental services; and (viii) the rates and charges are not discriminatory or excessive, are sufficient under Government Code section 54515, comply the provisions or covenants of any outstanding revenue bonds of the City payable from the revenues of the Water Enterprise, comply with the provisions of the Revenue Bond Law of 1941 (Government Code 54300-54700), and are in compliance with all other applicable law;

WHEREAS, the City Council has determined that the authorization of annual adjustments to the rates and charges for water usage provided for herein is appropriate and represents increases in the rates and charges needed to adequately finance the operations, capital improvements and debt obligations for the Water Enterprise for those years;

WHEREAS, in accordance with Proposition 218 and Government Code Section 53755, Notice of a Public Hearing to consider the proposed adjustments in water rates and charges and containing such information required to be included pursuant to California law (the Proposition 218 Notice) was mailed to all record owners of affected property to the addresses as they appear on the latest equalized assessment roll and to all City customers located on the affected parcels at the addresses to which the City customarily mails the billing statements;

WHEREAS, on November 28, 2023 , the City Council conducted the Public Hearing provided for in the Proposition 218 Notice, at which time the City Council heard all objections and protests to the proposed adjustments in water rates and charges;

WHEREAS, written protests against the proposed adjustments in water rates and charges were not presented by a majority of the property owners, as the total number of properties on which the rates are imposed as shown on the last equalized assessment roll of Orange County totaled 37,600 and the City received a total of ____ protests;

WHEREAS, pursuant to California Government Code section 66016 notice of the time and place of this hearing, including a general explanation of the matter to be considered and a statement that the data required by Government Code section 66016 is

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1111
Garden Grove City Council
Ordinance No. _____

Page 3 ends

available for public review at the City, was mailed to interested parties requesting notice at least fourteen (14) days prior to the hearing;

WHEREAS, pursuant to California Government Code section 66016 the City made available to the public the Water Rate Study and other data documenting the estimated costs required to provide services for which the proposed modified rates and charges will be levied and the revenue sources anticipated to provide the services;

WHEREAS, on November 28, 2023 , in accordance with applicable legal requirements, the City Council conducted a duly noticed Public Hearing to consider the proposed adjustments in water rates and charges set forth herein, at which Public Hearing all those who wished to speak for or against the proposed adjustments in water rates and charges were heard; and

WHEREAS, the adoption of this Ordinance and the establishment of such rates and charges is statutorily exempt under the California Environmental Quality Act (“CEQA”) pursuant to the provisions of Public Resource Code section 21080(b)(8) and Section 15378 and Section 15273 of the CEQA Guidelines because, (i) the increased rates and charges are for the purpose of meeting operational and maintenance expenses of the Water Enterprise, and (ii) the rates and charges constitute the creation of funding mechanism/other governmental fiscal activity which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GARDEN GROVE DOES HEREBY ORDAIN:

Section 1. Section 14.12.010 of Chapter 14.12 (Rates) of Title 14 (Water) of the Garden Grove Municipal Code is hereby amended in its entirety to read as follows:

14.12.010 – RATES AND CHARGES

The City of Garden Grove Water Division incurs ongoing operational costs, such as labor, commodities and contractual services in providing water service to the community. A water rate schedule is established to consist of a Bi-Monthly Minimum Charge and Commodity Delivery Charge to pay for the system operational and capital replacement costs. A Capital Improvements Charge is established to pay for future capital improvements needed to meet future demands on the system. Accordingly, the following rate structure is established for water usage:

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Garden Grove City Council
Ordinance No. _____

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A. BI-MONTHLY MINIMUM CHARGE. The Bi-Monthly Minimum Charge for metered service shall be:

BIMONTHLY MINIMUM CHARGES
Meter Size 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
5/8 x 3/4" $35.10 $38.23 $40.47 $42.84 $43.68
1" $54.54 $61.54 $65.77 $70.29 $72.39
1½" $87.28 $100.39 $107.95 $116.05 $120.24
2" $126.55 $147.01 $158.57 $170.96 $177.65
3" $231.29 $271.34 $293.55 $317.38 $330.77
4" $349.13 $411.20 $445.40 $482.10 $503.03
6" $676.44 $799.72 $867.20 $939.66 $981.52
8” $1,069.22 $1,265.94 $1,373.37 $1,488.73 $1,555.71
10” $1,592.92 $1,887.56 $2,048.26 $2,220.83 $2,321.29

B. COMMODITY DELIVERY CHARGE. Subject to adjustment pursuant to Subsections (E), the unit charge for metered services shall be:

BI-MONTHLY COMMODITY DELIVERY CHARGES
($ per hcf)
1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
Tier 1 $3.40 $3.53 $3.83 $4.14 $4.27
Tier 2 $5.29 $5.67 $5.84 $6.02 $6.10

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Garden Grove City Council
Ordinance No. _____

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UNITS OF WATER (1 UNIT = 100 CUBIC FT) (“hcf”)
INCLUDED IN TIER 1 PER BILLING PERIOD
METER SIZE MAXIMUM hcf, TIER 1
5/8 x 3/4 33
1 83
1 ½ 165
2 264
3 528
4 825
6 1,650
8 2,640
10 3,960

C. CAPITAL IMPROVEMENT CHARGE. The Bi-Monthly Capital Improvement Charge for services shall be:

BI-MONTHLY CAPITAL IMPROVEMENT CHARGE
Meter Size 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
5/8 x 3/4" $7.45 $7.92 $8.43 $8.97 $9.20
1" $18.62 $19.81 $21.08 $22.43 $22.99
1½" $37.24 $39.62 $42.16 $44.85 $45.98
2" $59.58 $63.39 $67.45 $71.77 $73.56
3" $119.16 $126.79 $134.90 $143.53 $147.12
4" $186.19 $198.10 $210.78 $224.27 $229.88
6" $372.37 $396.21 $421.56 $448.54 $459.76
8” $595.80 $633.93 $674.50 $717.67 $735.61
10” $893.70 $950.89 $1,011.75 $1,076.50 $1,103.41

D. AUTOMATIC PASS-THROUGH ADJUSTMENTS FOR PURCHASED WATER COSTS.

1. The Commodity Delivery Charge shall be automatically adjusted to reflect adopted increases or decreases in wholesale charges for water established by other public agencies from which the City of Garden Grove purchases water to the extent such increases or decreases are not reflected in the schedule of charges then in effect. Any such automatic adjustment shall be implemented through adjustment of the Commodity Delivery Charge. The

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Garden Grove City Council
Ordinance No. _____

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amount of any such automatic adjustment shall be calculated by the Finance Director, or his designee, and shall be presented to the City Council for review. Data documenting the amount of the increase or decrease in wholesale water costs and the basis for all adjustment calculations shall be made available to the public upon request.

2. The Finance Director shall cause notice of any automatic adjustment made pursuant to this subsection (D) to be given pursuant to subdivision (a) of Government Code Section 53755, as it may be amended from time to time, and/or other applicable law, not less than thirty (30) days before the effective date of the adjustment.

3. Unless readopted pursuant Government Code Section 53756, as it may be amended from time to time, and/or other applicable law, the authority to make automatic adjustments pursuant to this subsection (D) shall expire five (5) years from the effective date of the ordinance adopting or readopting this subsection (D).

E. DETERMINATION OF WATER SUPPLY. The percent of water to be pumped and the percentage to be purchased shall be established by the Public Works Director prior to May 1st of each year, based on the basin production percentage assigned to the City of Garden Grove by the Orange County Water District.

Section 2. Section 14.12.030 of Chapter 14.12 (Rates) of Title 14 (Water) of the Garden Grove Municipal Code is hereby amended in its entirety to read as follows:

14.12.030 – PRIVATE FIRE SERVICE

The bimonthly charge for private fire service protection shall be as follows:

BI-MONTHLY FIRE SERVICE RATE
Meter Size 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
1-1/2” $3.42 $3.84 $4.09 $4.35 $4.46
2” $7.28 $8.18 $8.70 $9.26 $9.49
3” $21.16 $23.77 $25.29 $26.91 $27.58
4” $45.09 $50.67 $53.91 $57.36 $58.79
6” $130.97 $147.17 $156.59 $166.61 $170.78
8” $279.09 $313.62 $333.69 $355.05 $363.93
10” $501.90 $564.01 $600.11 $638.52 $654.48

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Garden Grove City Council
Ordinance No. _____

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Section 3. Section 14.12.050 of Chapter 14.12 (Rates) of Title 14 (Water) of the Garden Grove Municipal Code is hereby amended in its entirety to read as follows:

14.12.050 - METER FAILURE

If a meter fails to operate properly during any period, the consumer shall be charged with an average daily consumption according to the season as shown by the meter when in use and registering accurately in the previous year.

Section 4. Severability. If any section, subsection, subdivision, sentence, clause, phrase, word or portion of this ordinance is, for any reason, held to be invalid by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have adopted this ordinance and each section, subsection, subdivision, sentence, clause, phrase, word or portion thereof, irrespective of the fact that any one or more sections, subsections, subdivisions, sentences, clauses, phrases, words or portions thereof be declared invalid.

Section 5. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after adoption.

The foregoing Ordinance was passed by the City Council of the City of Garden Grove on the 28th day of November 28, 2023.

ATTEST: MAYOR

CITY CLERK

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Report

Water Rate Study Report

City of Garden Grove
Public Works
Water Services Division

November 2023

Prepared by:

FG SOLUTIONS
697 Grand St #118
Brooklyn, NY 11211
www.fg-solutions.com

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The City of Garden Grove
G) fgSolutions

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697 Grand St #118
Brooklyn, NY 11211

Water Rate Study
Prepared for
City of Garden Grove
Public Works Department
Wat er Services Division
13802 Newhope St ., Garden Grove , CA 9 2843
November 13, 20 23

This report has been prepared for the use of the client for the specific purposes identified in the report. The conclusions, observations and recommendations contained herein attributed to FG Solutions, LLC constitute the opinions of FG Solutions, LLC. To the extent that statements, information, and opinions provided by the client or others have been used in the preparation of this report, FG Solutions, LLC has relied upon the same to be accurate, and for which no assurances are intended, and no representations or warranties are made. FG Solutions, LLC makes no certification and gives no assurances except as explicitly set forth in this report. © 2023 FG Solutions, LLC
All rights reserved.

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G) fgSolutions

ii
Garden Grove Water Rate Study Report 11132023
Table of Contents
Table of Contents
List of Tables
List of Figures
List of Abbreviations ............................................................................................................................... v Executive Summary ................................................................................................................................ 1

1. Background and Report Organization .......................................................................................... 1-1

1.1 Introduction ........................................................................................................................ 1-1

1.2 Existing Rates and Rate Structure ..................................................................................... 1-2

1.3 Water Rate Study Process ................................................................................................. 1-3

2. Revenue Requirement Analysis ................................................................................................... 2-1

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

2.2 Revenues ........................................................................................................................... 2-1

2.2.1 Key Assumptions .................................................................................................. 2-1

2.2.2 Non-Rate Revenues ............................................................................................. 2-1

2.2.3 Rate Revenues under Current Rates ................................................................... 2-1

2.2.4 Rate Revenues from Proposed Rate Increases ................................................... 2-2

2.3 Expenses ............................................................................................................................ 2-2

2.3.1 Key Assumptions .................................................................................................. 2-2

2.3.2 Capital Improvement Plan .................................................................................... 2-4

2.4 Operating Statement.......................................................................................................... 2-1

2.4.1 Fund 601 (Water Operations) .............................................................................. 2-1

2.4.2 Fund 602 (Water Capital)..................................................................................... 2-2

2.4.3 Fund 603 (Water Replacement) .......................................................................... 2-3

2.4.4 Financial Performance Indicators ........................................................................ 2-4

3. Rate Structure Development ....................................................................................................... 3-1

3.1 Cost-of-Service Analysis ..................................................................................................... 3-1

3.2 Proposed Rate Schedule ................................................................................................... 3-4

3.3 S
enior CARE Discount ........................................................................................................ 3-6

4. Example Bi-Monthly Water Bill Comparison ................................................................................. 4-1

4.1 Introduction ........................................................................................................................ 4-1

4.2 Example Bi-Monthly Bills .................................................................................................... 4-1

4.3 Comparison with Other Utilities ......................................................................................... 4-2

5. Ongoing Considerations ............................................................................................................... 5-1 Appendix A: Revenue Requirement ........................................................................................................ 1 Appendix B: Cost-of-Service Analysis ...................................................................................................... 1

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Water Rate Study – Garden Grove Water Services Division Table of Contents

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Garden Grove Water Rate Study Report 11132023
Appendix C: Rate Design ........................................................................................................................ 1

List of Tables
Table ES-1 Existing Bi-Monthly Minimum Charge and Bi-Monthly Capital Improvement Charge Table ES-2 Existing Commodity Delivery Charges
Table ES-3 Tier 1 Water Use Allowance
Table ES-4 Historical and Projected Revenues Under Existing Rates Table ES-5 Projected O&M Expenses
Table ES-6 Projected PFAS O&M Costs
Table ES-7 FY 23/24 - FY 27/28 Capital Improvement Plan Summary Table ES-8 Existing Debt Service
Table ES-9 Proposed Bi-Monthly Minimum Charge
Table ES-10 Proposed Bi-Monthly Capital Improvement Charge Table ES-11 Proposed Bi-Monthly Commodity Delivery Charges Table ES-12 Proposed Bi-Monthly Private Fire Service Charge Table 1-1 Existing Bi-Monthly Minimum Charge and Bi-Monthly Capital Improvement Charge Table 1-2 Existing Commodity Delivery Charges
Table 1-3 Tier 1 Water Use Allowance
Table 1-4 Existing Bi-Monthly Private Fire Service Rate Table 2-1 Historical and Projected Revenues Under Existing Rates Table 2-2 Projected O&M Expenses
Table 2-3 Projected Costs Paid to OCWD and MWD For Water Supply Table 2-4 Projected PFAS O&M Costs
Table 2-5 FY 23/24 - FY 27/28 Capital Improvement Plan Summary Table 2-6 Existing Debt Service
Table 2-7 Intercity Debt Service
Table 2-8 Sources of Funds, Fund 601
Table 2-9 Uses of Funds, Fund 601
Table 2-10 Sources of Funds, Fund 602
Table 2-11 Uses of Funds, Fund 602
Table 2-12 Sources of Funds, Fund 603
Table 2-13 Uses of Funds, Fund 603
Table 2-14 Financial Performance Indicators
Table 3-1 Water System Cost-of-Service Analysis - Functionalization of O&M Expenditures Table 3-2 Water System Cost-of-Service Analysis - Functionalization of Phase 1 CIP Table 3-3 Functionalization of Rate Revenue Requirement Table 3-4 Allocation of FY 23/24 Rate Revenue Requirement Table 3-5 Relationship Between Water Service Characteristics and Rate Structure Table 3-6 Proposed Bi-Monthly Minimum Charges
Table 3-7 Proposed Bi-Monthly Capital Improvement Charge Table 3-8 Proposed Commodity Delivery Charges
Table 3-9 Tier 1 Water Use Allowance
Table 3-10 Proposed Private Fire Service Rates
Table 4-1 Water Bill Comparisons: Average Single-Family Residence

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Table of Contents Water Rate Study – Garden Grove Water Services Division

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Garden Grove Water Rate Study Report 11132023
Table 4-2 Water Bill Comparisons: 50-Unit Apartment Building, 3" Meter Table 4-3 Water Bill Comparisons: Commercial Customer, 2" Meter

List of Figures
Figure 1-1 Overview of Methodology
Figure 4-1 Water Bill Comparison of local Utilities

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Water Rate Study – Garden Grove Water Services Division Table of Contents

ES-v
Garden Grove Water Rate Study Report 11132023
List of Abbreviations
AF Acre-Foot or Acre-Feet
AFY Acre-Feet per Year
AWWA American Water Works
Association
AWWA M1 Manual AWWA Ratemaking
Manual
CIMIS California Irrigation
Management Information
System
COSA Cost-of-Service Analysis
DSCR Debt Service Coverage
Ratio
GPM Gallons per Minute
cf cubic feet
hcf hundred cubic feet
CIP Capital Improvement Program
CPI Consumer Price Index
FG Solutions FG Solutions, LLC
FTE full-t ime equivalent
FY fiscal year (July 1–June 30)
hcf hundred cubic feet
kgal t housand gallon(s)
mgd m illion gallons per day
O&M operations and maintenance
HP Horsepower
MG Million Gallons
MGD Million Gallons per Day
MWD Metropolitan Water District
MWDOC Municipal Water District of
Orange County
OCWD Orange County Water
District
PFAS Per- and polyfluoroalkyl
substances
PUC Public Utilities Commission
RA Replenishment
Assessment
SWRCB State Water Resources
Control Board
T&D Transmission and
distribution

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ES-1
Garden Grove Water Rate Study Report 11132023
Executive Summary
The Garden Grove Public Works Department Water Services Division (“Division”) owns and operates the water system that provides water services throughout the city. The Division operates 17 total water production facilities, 13 wells, 5 pump stations, 8 reservoirs that hold approximately 53 million gallons of water, and 433 miles of pipe.

As part of its ongoing management of the water system, the Division has recognized the need to evaluate expenditures, revenues, and water rates to ensure that the Division can continue to provide safe and reliable service.

The Division is conducting a Water Rate Study that is intended to:
• Summarize the projected water revenue requirements for the five -year study period for fiscal years (FY) 23/24 thru FY 27/28.
• Show a proposed schedule of water rates effective for FY 23/24 through FY 27/28 for the Division’s consideration. These proposed rates include Bi-Monthly Minimum Charges, Commodity Delivery Charges, Capital Improvement Charges, and Private Fire Service rates. All rates shown, unless otherwise indicated, are charged on a bi-monthly basis.
• Outline potentially changing conditions with financial implications, such as water demand, water conservation, new PFAS facilities, and inflation and interest rates.

Historical and budgeted financial and operational data were provided by the Division and used by FG Solutions to develop the projected revenue requirement for the five-year study period. The revenue requirement analysis was an iterative process and draft versions were revised based on comments and input provided by Division staff and the Finance department. Next, the revenue requirement was compared with the revenues generated by the existing rates to generate additional revenues needed from rate increases. Key assumptions used in the Revenue Requirement analysis are summarized in Section 2. Additional assumptions are provided in the printout of the Revenue Requirement calculations that comprise Appendix A.

There are three appendices to this report. Appendix A contains the Revenue Requirement. Appendix B is the water system Cost-of-Service Analysis. Appendix C contains calculations associated with the Rate Design.

The Water Rate Study was initiated in March 2023. The Rate Study was discussed during one Council Briefing session and three Council Study Sessions held throughout 2023. A Public Workshop was held in September 2023. A key part of this Rate Study was establishing the funding required to address three focuses of the Division’s current work: PFAS treatment, new water conservation regulations adopted by the State of California, and ongoing capital improvement needs.

The current water rate structure has the following components, all charged on a bi-monthly basis; a) a Bi-Monthly Minimum Charge; b) a Capital Improvement Charge; and c) a Commodity Delivery Charge, per hundred cubic feet (hcf) consumed during the billing period, in a two-tier rate structure. Table ES-1 below shows the current Bi-Monthly Minimum Charge and the Capital Improvement Charge for each water meter size. All rates are current as of October 1, 2023.

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Executive Summary

ES-2
Garden Grove Water Rate Study Report 11132023
Table ES-1: Existing Bi-Monthly Minimum Charge and Capital Improvement Charge

The City purchases imported water from wholesale providers, Metropolitan Water District of Southern California (MWD) and Municipal Water District of Orange County (MWDOC). The City also pays a replenishment assessment fee to Orange County Water District (OCWD) for each acre-foot of local groundwater production. These wholesale providers and OCWD adopt new rates and fee adjustments on an annual basis. The City passes through changes in imported water rates and assessment fees. The Commodity Delivery Charge pays for the cost of purchasing water from MWD, in addition to the replenishment assessment fee to OCWD. Table ES-2 shows the existing Commodity Delivery Charges, per tier.

Table ES-2: Existing Commodity Delivery Charge, $/hcf

Tier 1 is based on the cost of locally produced groundwater. Tier 2 is based on the cost of locally produced ground water and imported water. Table ES-3 defines the amount of water in the first tier, for each meter connection size.

The amount of water included in Tier 1 is unchanged from current City Ordinance.

Table ES-3: Tier 1 Water Use Allowance

To provide for the continued operation of a utility on a sound financial basis, revenues must be sufficient to meet the cash requirements for operation and maintenance (O&M) expense, debt service requirements, debt service Bi-Monthly
Bi-Monthly Cap ital
Meter Size Minimum Improvement
(inches) Charge Charge
5/8 x 3/4" $33.85 $7.00
1" $50.48 $17.50
1-1/2" $78.20 $35.00
2" $111.45 $56.00
3" $200.15 $112.00
4" $299.92 $175.00
6" $577.08 $350.00
8" $909.67 $560.00
10" $1,353.12 $840.00
Commodity
Delivery
Tier Charge, $/hcf
Tier 1 $3.26
Tie
r 2 $4.80
Bi-Monthly Water
Meter Size Use Included in
(inches) Tier 1, hcf
5/8 x 3/4" 33
1" 83
1-1/2" 165
2" 264
3" 528
4" 825
6" 1,650
8" 2,640
10" 3,960

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ES-3
Garden Grove Water Rate Study Report 11132023
coverage requirements, reserves, and cash-funded capital expenditures not financed with debt. The sum of these cost components for a given year is referred to as a utility’s Revenue Requirement.

Table ES-4: Historical and Projected Revenues Under Existing Rates

Next, the revenue requirement was compared with the revenues generated by the existing rates to generate additional revenues needed from rate increases. The revenue requirement is met in the later years of the five-year study period as the proposed rates were developed to generate these reserve levels over time. The three aspects of revenue projections described in the sections below are non -rate revenues, rate revenues under the current rate schedule, and rate revenues from proposed rate increases.

Table ES-5: Projected O&M Expenses

FY 23/24 O&M expenses are primarily based on the Division’s FY 23/24 budget. In subsequent years, expenses are escalated for inflation. For the purposes of this rate study, FY 24/24 inflation is 4%. In subsequent years, General Inflation was assumed to be 2.5%, Salaries and Wages Escalation is assumed to be 2.5% (except 4% in FY 25/26), and the rate of escalation for any Capital Improvements is assumed to be 2.5%. All percentages are assumed to remain constant through the end of the planning period, FY 27/28.

Water production expenses are the single largest component of the Division’s expenditures. A key assumption is that 85% of future water supply is locally produced groundwater, with the remaining 15% future water supply coming from imported water.

Projected
Revenue FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Water Sales Revenues (Excludes Future Rate Increases and Future Pass Through Charge Adjustments) Bi-Monthly Minimum Charge (1) $8,344,136 $8,344,136 $8,344,136 $8,344,136 $8,344,136 Commodity Delivery Charge (1) 29,379,678 29,379,678 29,379,678 29,379,678 29,379,678 Private Fire Service (1) 494,910 494,910 494,910 494,910 494,910 Senior CARE Discount (2) (16,342) (16,342) (16,342) (16,342) (16,342) Write-offs (3) (55,214) (58,748) (62,508) (66,509) (68,171) Other Income
Transfer from General Fund for City Water Use (4) 636,691 691,891 736,172 783,287 822,810 Other Revenues (2) 97,032 97,032 97,032 97,032 97,032
Investment Income 151,683 161,121 131,892 127,726 107,807 Bi-Monthly Capital Improvement Charge (1) 2,320,206 2,320,206 2,320,206 2,320,206 2,320,206 Total $41,352,781 $41,413,885 $41,425,177 $41,464,126 $41,482,067 Projected (1)
O&M Cost Component FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Salaries & Fringe Costs (2) $7,803,861 $8,176,893 $8,503,969 $8,716,568 $8,934,483 Contractual Services 570,531 475,484 494,503 506,866 519,538 Commodities Other than Water Costs 567,215 555,215 577,424 591,859 606,656 Water Use Objectives Compliance Cost (3) 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Administrative Services Charge 1,402,200 1,444,200 1,501,968 1,539,517 1,578,005 Street Repair Costs 814,455 814,455 847,033 868,209 889,914 Miscellaneous O&M 25,283 25,283 26,294 26,952 27,625
Electricity 1,111,256 1,155,706 1,184,599 1,214,214 1,244,569 Natural Gas 289,311 300,884 308,406 316,116 324,019
OCWD Pumping (4) 47,208 47,208 49,096 50,324 51,582
Costs Paid to OCWD and MWD For Water Supply (5 15,343,794 15,343,794 15,343,794 15,343,794 15,343,794 PFAS O&M Costs (6) 2,872,745 4,677,169 5,554,594 11,165,129 11,444,257 OCWD Reimbursement of PFAS O&M Costs (6) (166,293) (986,920) (1,072,147) (1,389,694) (1,519,503) Total 32,681,566 34,029,371 35,319,533 40,949,853 41,444,938

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Executive Summary

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Garden Grove Water Rate Study Report 11132023
Since the first PFAS facilities came online in FY 21/22, the PFAS O&M expenses are a new expense to the Division.

The largest component of PFAS O&M is the Ion Exchange Resin changeout. The projected costs in Table 2-4 are based on annual resin changeouts at each PFAS facility. As the Division gains experience operating and maintaining PFAS facilities, they will be a ble to adjust resin change out schedules based on need. Table ES-6 also shows the partial reimbursement of PFAS O&M costs from OCWD. Please refer to Appendix A for more detailed calculations.

Table ES-6: Projected PFAS O&M Expenses

A key aspect of any rate study is defining the anticipated level of capital improvements over the planning period.

The Division provided its five-year Capital Improvement Plan from FY 23/24 through FY 27/28. Table ES-7 summarizes capital costs grouped in six categories. The Division projects spending $23.6 million dollars in water main upsizing and replacement. Another $17.8 M is projected for recurring replacements of service lines, fire hydrants, valves, meters, and water mains. The Division continues its ongoing reservoir rehabilitation projects and will complete its SCADA upgrades within the five-year rate study planning period. Section 2 of the report contains the detailed list of scheduled capital improvements.

Table ES-7. FY 23/24 - FY 27/28 Capital Improvement Plan Summary

Table ES-8 shows Existing Revenue Bond Debt Service for the rate study planning period. The 2015 Revenue and Refunding Bonds will be paid off in FY 23/24. Debt service payments on the 2020A Water Revenue Bonds will continue through the rate study planning period. The Division also has an outstanding Intercity Loan with the City’s General Fund. The outstanding balance, as of FY 23/24 is $9,851,256.

Table ES-8: Existing Revenue Bond Debt Service

Projected
PFAS O&M Cost Component FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Prefilters (Cartridges) $156,868 $163,143 $187,536 $396,582 $406,497 Ion Exchange Resin Changeout 2,276,780 3,846,731 4,393,444 9,526,203 9,764,359 Labor: Future Hires 0 177,600 171,995 176,295 180,702
Power 178,914 194,365 251,931 275,464 282,351
Analytical 4,800 5,616 9,594 13,112 13,440
Maintenance Cost 47,250 52,650 104,335 154,883 158,755
O&M Contingency 208,133 237,064 435,758 622,589 638,154 Total $2,872,745 $4,677,169 $5,554,594 $11,165,129 $11,444,257 Less Partial Reimbursement ($166,293) ($986,920) ($1,072,147) ($1,389,694) ($1,519,503) Total Through Rates $2,706,452 $3,690,249 $4,482,447 $9,775,435 $9,924,754 Cost (2023)
Category Project Description Dollars
Recurring Replacements Service Lines, Fire Hydrants, Meters, Valves, Mains, and Appurtances $17,807,227 Wells Well Condition Assessment & Rehabilitation 2,257,142 Reservoirs Reservoir Rehabilitation 7,630,000
Water Mains Water Main Upsizing and Replacement 23,638,487 SCADA SCADA Upgrades 7,411,136
Property Purchase Well 26 Property Purchase 1,643,000
Total $60,386,992
Projected Principal and Interest Payment (1)
Revenue Bond Debt Issuance FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Revenue and Refunding Bonds 2015 $939,300 $0 $0 $0 $0
Water Revenue Bonds Series 2020A 1,720,175 1,714,575 1,717,775 1,719,375 1,719,375 Total $2,659,475 $1,714,575 $1,717,775 $1,719,375 $1,719,375

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Garden Grove Water Rate Study Report 11132023
The proposed rate structure was developed collaboratively by the Consultant and the Division, with input from City Council that was obtained during the four study sessions that occurred in 2023. The proposed rate structure is based on the following goals:

1. Balance revenue stability of higher fixed charges with financial impacts to rate payers that occur when fixed charges are raised.

2. Collect 28% of revenues from fixed charges.

3. Maintain the two -tiered increasing block Commodity Delivery Charge structure. The first tier includes locally produced groundwater. The second tier includes both locally produced ground water and imported water.

4. Discontinue the Low-Water User discount.

5. Maintain the Senior CARE discount of $10 per billing period.

The rate structure is developed using a Cost -of-Service Analysis (COSA), completed in a consistent manner with industry standards. The Cost-of-Service analysis uses methodology from the American Water Works Association’s M1 Manual, Principles of Water Rates, Fees, and Charges (7th Edition).

The first step in a COSA is functionalization, where water system expenses are grouped according to the functions of a water system. Water functions include pumping, storage, transmission and distribution (T&D), customer, meter, and administration.

The next step is the Functionalization of the Capital Improvement Plan. Forty one percent of the CIP costs are related to transmission and distribution, 26% of these costs are related to storage.

The next step is the Functionalization of the Rate Revenue Requirement, for FY 23/24. Included in the rate revenue requirement are O&M expenditures, debt service payments, capital improvements and replacement expenditures.

In FY 23/24, these expenditures are partially offset by non-rate revenues and use of reserves.

The next step in a Cost-of-Service Analysis is allocation, where functionalized expenses are allocated to water system characteristics of average day demand, peak day demand, peak hour demand, and customer and water meter size.

In addition, source of supply costs are carried through the allocation step to be used in the rate tier calculations described in detail in Section 3 and Appendix C.

Table ES-9 shows the proposed Bi-Monthly Minimum Charges for each meter size. The table shows the current Bi- Monthly Minimum Charge, and the proposed rates through the end of the rate study planning period.

Table ES-9: Proposed Bi-Monthly Minimum Charges

The Bi-Monthly Capital Improvement Charge collects funds that are used to pay for planned capital improvements.

Table ES-10 shows the current and proposed Bi -Monthly Capital Improvement Charge for each meter connection size through the end of the rate study planning period.

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Executive Summary
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Garden Grove Water Rate Study Report 11132023
Table ES-10: Proposed Bi-Monthly Capital Improvement Charge T
able ES-11 below shows the current and proposed Bi-Monthly Commodity Delivery Charge. The proposed charges retain the existing two-tiered rate structure. The proposed Bi-Monthly Commodity Delivery Charges do not include future increases in water supply costs from MWD and OCWD. These future increases will be recovered through annual Commodity Delivery Charge pass-through adjustments.

Table ES-11: Proposed Bi-Monthly Commodity Delivery Charges Tab
le ES-12 below shows the proposed Private Fire Service rates. These rates recover costs associated with transmission, distribution and storage that are related to providing fire protection services to private fire service connections.

Table ES-12: Proposed Private Fire Service Rates
Meter Proposed Bi-Monthly Capital Improvement Charge
Size Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 5/8 x 3/4" $7.00 $7.45 $7.92 $8.43 $8.97 $9.20
1" $17.50 $18.62 $19.81 $21.08 $22.43 $22.99
1-1/2" $35.00 $37.24 $39.62 $42.16 $44.85 $45.98
2" $56.00 $59.58 $63.39 $67.45 $71.77 $73.56
3" $112.00 $119.16 $126.79 $134.90 $143.53 $147.12
4" $175.00 $186.19 $198.10 $210.78 $224.27 $229.88
6" $350.00 $372.37 $396.21 $421.56 $448.54 $459.76
8" $560.00 $595.80 $633.93 $674.50 $717.67 $735.61
10" $840.00 $893.70 $950.89 $1,011.75 $1,076.50 $1,103.41 Proposed Commodity Delivery Charges
Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Tier 1 $3.26 $3.40 $3.53 $3.83 $4.14 $4.27
Tier 2 $4.80 $5.29 $5.67 $5.84 $6.02 $6.10
Meter Proposed Private Fire Service Rates
Size Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1-1/2" $2.99 $3.42 $3.84 $4.09 $4.35 $4.46
2" $6.38 $7.28 $8.18 $8.70 $9.26 $9.49
3" $18.55 $21.16 $23.77 $25.29 $26.91 $27.58
4" $39.51 $45.09 $50.67 $53.91 $57.36 $58.79
6" $114.76 $130.97 $147.17 $156.59 $166.61 $170.78
8" $244.55 $279.09 $313.62 $333.69 $355.05 $363.93
10" $439.79 $501.90 $564.01 $600.11 $638.52 $654.48

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Section 1
Background and Report Organization

1.1 Introduction
The Garden Grove Public Works Department Water Services Division (“Division”) provides water services to approximately 34,8001 connections throughout the City of Garden Grove. The Division is governed by the 7-member Garden Grove City Council. The Division is part of the Public Works Department and is responsible for providing safe and reliable water to the City of Garden Grove. In addition, it is responsible for maintaining wells, reservoirs, and imported water connections. It also provides ongoing maintenance and repair to the water delivery system.

The Division operates 17 total water production facilities, 13 wells, 5 pump stations, 8 reservoirs that hold approximately 53 million gallons of water, and 433 miles of pipe. Within this water system, the Division has an ongoing operation and maintenance program to ensure the continued provision of water conveyance and delivery services.

The Division is conducting a Water Rate Study that is intended to:
• Summarize the projected water revenue requirements for the five -year study period for fiscal years (FY) 23/24 thru FY 27/28

1. • Show a proposed schedule of water rates effective for FY 23/24 through FY 27/28 for the Division’s consideration. These proposed rates include Bi-Monthly Minimum Charges, Commodity Delivery Charges, Capital Improvement Charges, and Private Fire Service rates . All rates shown, unless otherwise indicated, are charged on a bi-monthly basis.
• Outline potentially changing conditions with financial implications, such as water conservation regulations, water demand trends, PFAS, inflation rates, interest rates, and recommendations for ongoing monitoring of these items.

Key assumptions used in the Revenue Requirement analysis are summarized in Section 2. Additional assumptions are provided in the printout of the Revenue Requirement calculations that comprise Appendix A.

1Including residential connections, non-residential connections , and private fire service connections. 2 The Division’s fiscal year begins on July 1. FY 23/24 refers to the period between July 1, 2023 and June 30, 2024. .

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1.2 Existing Rates and Rate Structure
The current water rate structure has the following components, all charged on a bi-monthly basis; a) a Bi-Monthly Minimum Charge; b) a Capital Improvement Charge; and c) a C ommodity Delivery Charge, per hundred cubic feet (hcf) consumed during the billing period, in a two -tier rate structure. Table 1 -1 shows t he Bi-Monthly Minimum Charge and the Capital Improvement Charge for each water meter size. All rates are current as of October 1, 2023.

Table 1-1. Existing Bi-Monthly Minimum Charge and Capital Improvement Charge

The Division currently has two rate tiers. Table 1-2 shows the existing Commodity Delivery Charges, per tier.

Table 1-2. Existing Commodity Delivery Charges

Table 1-3 shows the Bi-Monthly Water Use that is included in Tier 1. For example, a residential customer with a 5/8’ x ¾” meter can use up to 33 hcf and be charged Tier 1 rates. Above 33 hcf, the customer would have to pay the Tier 2 rate.

Table 1-3. Bi-Monthly Water Use Included in Tier 1

Bi-Monthly
Bi-Monthly Cap ital
Meter Size Minimum Improvement
(inches) Charge Charge
5/8 x 3/4" $33.85 $7.00
1" $50.48 $17.50
1-1/2" $78.20 $35.00
2" $111.45 $56.00
3" $200.15 $112.00
4" $299.92 $175.00
6" $577.08 $350.00
8" $909.67 $560.00
10" $1,353.12 $840.00
Commodity
Delivery
Tier Charge, $/hcf
Tier 1 $3.26
Tie
r 2 $4.80
Bi-Monthly
Water Use
Meter Size Included in
(inches) Tier 1, hcf
5/8 x 3/4" 33
1" 83
1-1/2" 165
2" 264
3" 528
4" 825
6" 1,650
8" 2,640
10" 3,960

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The Division charges Private Fire Service customers a Bi-Monthly Private Fire Service Rate, based on the fire service connection meter size. Private Fire Services are customers with Fire Service connections that have a separate meter that is connected only to the customer’s fire sprinkler system. Table 1-4 shows these fees in detail.

Table 1-4. Existing Private Fire Service Rates

1.3 Water Rate Study Process
The Water Rate Study kicked off in March 2023. In order to communicate with City Council and the public, the Division and the consultant team attended one Council Briefing, three Study Sessions, plus one Public Workshop.

The first Council Briefing was held in May 2023. where an introduction to the water system was presented, as was an overview of the 2023 financial status of the utility ` .

A Study Session was held in June 2023 that focused on the accomplishments since the 2018 Water Rate Study, Capital Improvement Plan, and the preliminary revenue requirement analysis.

A Study Session was held in July 2023 where preliminary rate structures were presented to Council.

A Study Session was held in August 2023, where the proposed rate structures were presented to Council . The proposed rate structures incorporated Council feedback on the preliminary rate structures.

A Public Workshop was held in September 2023. The intent of this workshop was to have an open and transparent discussion with the public about the upcoming rate increase, and to assist customers in developing an understanding of what their water bill will be.

Figure 1-1 shows the overall approach and methodology used to complete the scope of services for this water rate study.

Bi-Monthly
Private Fire
Meter S
ize Service
(inches) Rate
1-1/2" $2.99
2" $6.38
3" $18.55
4" $39.51
6" $114.76
8" $244.55
10" $439.79

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Figure 1-1 Overview of Methodology
Data and Policies
Financial
Customer
Billing
Capital Facilities Plan
Fiscal Policy
Level of Service
Revenue
Requirement
Cost of Service
Analysis Rate Design
Council Study
Session: Percentage
of System-Wide
Increase OK? City Staff: Rate
Schedule OK to
Present to Council?
Revisions to
Revenue
Requirement
and Rate Design
Council Study Sessions:

Rate Schedule OK?
Adoption and
Implementation
NO
YES
YES
NO
YES
NO
NO
Prop 218
Notifications
Sent
Prop 218 Public
Hearing
Council Vote:

Adopt Rates?
YES
Staff Determine
Whether to
Evaluate Additional
Alternatives

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Section 2
Revenue Requirement Analysis

2.1 Introduction
To provide for the continued operation of a utility on a sound financial basis, revenues must be sufficient to meet the cash requirements for operation and maintenance (O&M) expense, debt service requirements, debt service coverage requirements, reserves, and cash-funded capital expenditures not financed with debt. The sum of these cost components for a given year is referred to as a utility’s Revenue Requirement.

Historical and budgeted financial and operational data were provided by the Division and used by FG Solutions to develop the projected revenue requirement for the five-year study period. The revenue requirement analysis was an iterative process and draft versions were revised based on comments and input provided by Division staff. Next, the revenue requirement was compared with the revenues generated by the existing rates to generate additional revenues needed from rate increases. The reserve requirement, described below, is met throughout the five-year projection period. Revenue projections are a critical part of the revenue requirement analysis. The three aspects of revenue projections described in the sections below are non -rate revenues, rate revenues under the current rate schedule, and rate revenues from proposed rate increases.

Key assumptions used in the Revenue Requirement analysis are listed below. Additional assumptions are provided in the printout of the Revenue Requirement calculations that comprise Appendix A.

2.2 Revenues

2.2.1 Key Assumptions
Revenue projections are a critical part of the revenue requirement analysis. The three aspects of revenue projections described in the sections below are non -rate revenues, rate revenues under the current rate schedule, and rate revenues from proposed rate increases.

FY 23/24 revenues are calculated based on FY 22/23 actual water use, number of customers in FY 22/23, and the existing rate structure.

Another key assumption is that no customer growth is projected through FY 27/28. For the purposes of these rate calculations, customer growth in the water service area is projected to be negligible.

2.2.2 Non-Rate Revenues
The key sources of water revenues other than rate revenues are predominantly late fees, with some non -rate revenues from interest income.

2.2.3 Rate Revenues under Current Rates
Rates that are currently effective are shown in Tabl es 1-1, 1 -2, and 1-3 . These rates were used to project the revenues shown in Table 2-1. Revenue estimates under current rates shown in Table 2-1 for FY 24/25 through FY 27/28 are projected to remain at FY 23/24 values. A portion of Late Fee revenues are used to fund the Senior CARE discount.

Table 2-1: Historical and Projected Revenues Under Existing Rates

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Not
es:

Projected water sales revenues under existing rates are projected to be flat through FY 27/28. The projected Commodity Delivery Charge revenue shown in Table 2 -1 does not include future Pass-Through Adjustments. Pass- Through Adjustments are considered by the City Council on an annual basis and will be calculated based on future changes in imported water costs that are not known at this time. For more detail, refer to Appendix A.

2.2.4 Rate Revenues from Proposed Rate Increases
Rate revenues resulting from proposed rate increases are shown later in this report.

2.3 Expenses

2.3.1 Key Assumptions
FY 23/24 O&M expenses are primarily based on the Division’s FY 23/24 budget. In subsequent years, expenses are escalated for inflation. For the purposes of this rate study, the FY 24/25 inflation rate is 4% . In subsequent years, General Inflation was assumed to be 2.5%, Salaries and Wages Escalation is assumed to be 4% in FY 25/26 and 2.5% thereafter, and the rate of escalation for any Capital Improvements is assumed to be 2.5%.

Projected annual water production, a combination of both locally produced groundwater and imported water, is assumed to be 19,773 acre-feet (AF) per year, for the entire planning period. This number is based on FY 22/23 actual water demands. FY 22/23 weather was unusually wet, explaining the decrease in consumption.

Table 2-2 shows projected O&M expenses for the Study period. Additional detail is included in Appendix A, Table A-

5. Table 2-2: Projected O&M Expenses
Projected
Revenue FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Water Sales Revenues (Excludes Future Rate Increases and Future Pass Through Charge Adjustments) Bi-Monthly Minimum Charge (1) $8,344,136 $8,344,136 $8,344,136 $8,344,136 $8,344,136 Commodity Delivery Charge (1) 29,379,678 29,379,678 29,379,678 29,379,678 29,379,678 Private Fire Service (1) 494,910 494,910 494,910 494,910 494,910 Senior CARE Discount (2) (16,342) (16,342) (16,342) (16,342) (16,342) Write-offs (3) (55,214) (58,748) (62,508) (66,509) (68,171) Other Income
Transfer from General Fund for City Water Use (4) 636,691 691,891 736,172 783,287 822,810 Other Revenues (2) 97,032 97,032 97,032 97,032 97,032
Investment Income 151,683 161,121 131,892 127,726 107,807 Bi-Monthly Capital Improvement Charge (1) 2,320,206 2,320,206 2,320,206 2,320,206 2,320,206 Total $41,352,781 $41,413,885 $41,425,177 $41,464,126 $41,482,067 (1) Calculated based on the number of water system customers and projected water use, at the rates contained in Ordinance 2890.

Does not include revenues from proposed rate increases. (2) Source: City's FY 23/24 budget. In subsequent years, the Senior Care Discount is held constant at current amounts. (3) Source: City's FY 23/24 budget. In subsequent years, projected to increase at the overall rate of water sales revenue increases. (4) Calculated based on the City's current water use. In subsequent years, projected to increase at the overall rate of water sales revenue increases.
(5) FY 23/24 per the City's FY 23/24 budget. In subsequent years, based on 0.65% interest income on the City's Fund Balances at the end of the preceding Fiscal Year.

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Note
s:

For the 15% of water production that is imported water, the primary cost is the imported water charge from Metropolitan Water District (MWD). For the 85% of water that is locally produced, the primary expenses are energy costs for pumping water, and the Replenishment Assessment from the Orange County Water District (OCWD). More detail can be found in Appendix A.

Table 2-3: Projected Costs Paid to OCWD and MWD For Water Supply Notes:

The key points about PFAS are that O&M costs are increasing as new facilities come online. Since the first PFAS facilities came online in FY 21/22, the PFAS O&M expenses are new to the Division. The largest component of PFAS O&M is the Ion Exchange Resin changeout. The projected costs in Table 2 -4 are based on annual resin changeouts at each PFAS facility. As the Division gains experience operating and maintaining PFAS facilities, they will be able to Projected (1)
O&M Cost Component FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Salaries & Fringe Costs (2) $7,803,861 $8,176,893 $8,503,969 $8,716,568 $8,934,483 Contractual Services 570,531 475,484 494,503 506,866 519,538 Commodities Other than Water Costs 567,215 555,215 577,424 591,859 606,656 Water Use Objectives Compliance Cost (3) 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Administrative Services Charge 1,402,200 1,444,200 1,501,968 1,539,517 1,578,005 Street Repair Costs 814,455 814,455 847,033 868,209 889,914 Miscellaneous O&M 25,283 25,283 26,294 26,952 27,625
Electricity 1,111,256 1,155,706 1,184,599 1,214,214 1,244,569 Natural Gas 289,311 300,884 308,406 316,116 324,019
OCWD Pumping (4) 47,208 47,208 49,096 50,324 51,582
Costs Paid to OCWD and MWD For Water Supply (5 15,343,794 15,343,794 15,343,794 15,343,794 15,343,794 PFAS O&M Costs (6) 2,872,745 4,677,169 5,554,594 11,165,129 11,444,257 OCWD Reimbursement of PFAS O&M Costs (6) (166,293) (986,920) (1,072,147) (1,389,694) (1,519,503) Total 32,681,566 34,029,371 35,319,533 40,949,853 41,444,938 (1) FY 23/24 and FY 24/25 expenses are from the City's FY 23/24 Budget unless otherwise noted. Expenses in later years are projected to increase with inflation unless otherwise noted. (2) Salaries & Fringe costs increase at 4% in FY 24/25 and FY 25/26 per the terms of existing labor agreements. (3) Compliance cost provided by City staff. Costs will be spent on items that will reduce water use, including an increased emphasis on meter replacement and reducing water losses. (4) Expenses
(5) See Table 2-3 for more detail.
(6) See Table 2-4 for more detail.

Projected (1) (2) (3)
MWD and OCWD Cost Component FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 OCWD Replenishment Assessment 10,487,623 10,487,623 10,487,623 10,487,623 10,487,623 MWD Tier 1 Treated Water 3,585,842 3,585,842 3,585,842 3,585,842 3,585,842 MWD Readiness to Serve Charge 541,486 541,486 541,486 541,486 541,486 MWD Capacity Charge 207,834 207,834 207,834 207,834 207,834 MWD Connection Charge 492,275 492,275 492,275 492,275 492,275 MWD Choice Programs 28,734 28,734 28,734 28,734 28,734
Total 15,343,794 15,343,794 15,343,794 15,343,794 15,343,794 (1) Calculated based on FY 22/23 water demands and current FY 23/24 MWD and OCWD costs. Based on 85% of the City's water supply obtained from local groundwater production and 15% of the City's water supply purchased from MWD.
(2) Projected costs are not escalated for inflation. Instead, cost increases will be incorporated into the City's annual Commodity Delivery Charge Pass-Through Adjustment. (3) See Appendix A for more detailed calculations.

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adjust resin change out schedules based on need. Table 2 -4 also shows the partial reimbursement of PFAS O&M costs from OCWD. Please refer to Appendix A for more detailed calculations.

Table 2-4: Projected PFAS O&M Costs
Notes:
(1) See Appendix A for detailed calculations.

2.3.2 Capital Improvement Plan
A key aspect of any rate study is defining the anticipate d level of capital improvements over the planning period.

The Division provided its five-year Capital Improvement Plan from FY 23/24 through FY 27/28. Table 2-5 summarizes capital costs um grouped in six categories. The Division projects spending $23.6 million dollars in water main upsizing and replacement. Another $17.8 M is projected for recurring replacements of service lines, fire hydrants, valves, meters, and water mains. The Division continues its ongoing reservoir rehabilitation projects and will complete its SCADA upgrades within the five -year rate study planning period. Table 2 -6 shows the detailed list of scheduled capital improvements.

Table 2-5 FY 23/24 - FY 27/28 Capital Improvement Plan Summary Table 2-6 shows the Division’s detailed Capital Improvement Plan through the end of the rate study planning period.

This can also be found in the Appendix.

Projected (1)
PFAS O&M Cost Component FY 23/24 FY 24/25 FY 25/26 FY 26/27 F Y 27/28 Prefilters (Cartridges) $156,868 $163,143 $187,536 $396,582 $406,497 Ion Exchange Resin Changeout 2,276,780 3,846,731 4,393,444 9,526,203 9,764, 359 Labor: Future Hires 0 177,600 171,995 176,295 180,702
Power 178,914 194,365 251,931 275,464 282,351
Analytical 4,800 5,616 9,594 13,112 13,440
Maintenance Cost 47,250 52,650 104,335 154,883 158,755
O&M Contingency 208,133 237,064 435,758 622,589 638,154 Total $2,872,745 $4,677,169 $5,554,594 $11,165,129 $11,444, 257 Less Partial Reimbursement ($166,293) ($986,920) ($1,072,147) ($1,389,694) ( $1,519,503) Total Through Rates $2,706,452 $3,690,249 $4,482,447 $9,775,435 $9,924, 754 Cost (2023)
Category Project Description Dollars
Recurring Replacements Service Lines, Fire Hydrants, Meters, Valves, Mains, and Appurtances $17,807,227 Wells Well Condition Assessment & Rehabilitation 2,257,142 Reservoirs Reservoir Rehabilitation 7,630,000
Water Mains Water Main Upsizing and Replacement 23,638,487 SCADA SCADA Upgrades 7,411,136
Property Purchase Well 26 Property Purchase 1,643,000
Total $60, 386,992

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Table 2-6 Capital Improvement Plan
Capital Improvement Plan
Estimated Funding, FY 23/24 Dollars
Carry Budget
Project List Forward FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Total Fund 602 Water Capital Fund Projects
1) Magnolia Reservoirs and Booster Pump Station Project $0 $800,000 $0 $0 $0 $0 $800,000 2) SCADA Implementation Project 436,956 400,000 1,505,000 800,000 1,500,000 0 4,641,956 3) SCADA -FP2 Pressure Monitoring Improvements 0 419,180 0 0 0 0 419,180 4) SCADA - HP4-5 SCADA - Trask & Westhaven 0 1,450,000 0 0 0 0 650,000 5) SCADA - HP1-3 SCADA - Mag, Lampson, & WGG 0 0 900,000 0 0 0 900,000 6) Water Improvement Project Woodbury Rd and Taft St 0 0 1,200,000 0 0 0 1,200,000 7) Water Improvement Project - Orangewood and Yorkshire Ave (~7 3,956,942 0 0 0 0 0 3,956,942 8) Water Improvement Project - Chapman Ave and Dale St (~10,000 f 0 5,000,000 0 0 0 0 5,000,000 9) Well assessment (Well 16, 19, 25) 57,142 0 0 0 0 0 57,142 10) Well 19 Construction 0 2,200,000 0 0 0 0 2,200,000
11) Water Improvement Project - Woodbury Ave & Anabel Ave (~3, 0 2,097,545 0 0 0 0 1,680,000 12) Water Main Replacement (2 miles each year) 0 0 0 2,084,000 4,000,000 4,000,000 10,084,000 13) Design and Construction of Lampson and Trask Reservoirs Rehabi 0 830,000 3,000,000 3,000,000 0 0 6,830,000 14) Various Residential Streets Projects N of GG Blvd & E of Dale 0 1,200,000 0 0 0 0 1,200,000 15) Water Transmission Line Study 0 0 100,000 0 0 0 100,000 16) Well 26 Property Purchase 0 0 1,643,000 0 0 0 1,643,000 Subtotal $4,451,040 $14,396,725 $8,348,000 $5,884,000 $5,500,000 $4,000,000 $41,362,220 Fund 603 Water Replacement Fund Projects
Water Main Replacement (services, hydrants, meters, valves, etc.) $0 $3,807,227 $3,500,000 $3,500,000 $3,500,000 $3,500,000 $17,807,227 Total $4,451,040 $18,203,952 $11,848,000 $9,384,000 $9,000,000 $7,500,000 $59,169,447 Estimated Cost

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Table 2-7 shows Existing Revenue Bond Debt Service for the rate study planning period. The 2015 Revenue and Refunding Bonds will be paid off in FY 23/24. Debt service payments on the 2020A Water Revenue Bonds will continue through the rate study planning period.

Table 2-7: Existing Revenue Bond Debt Service

The Division also has an outstanding Intercity Loan with the City’s General Fund. This debt has been in existence since the mid-1990s. The outstanding balance, as of FY 23/24 is $9,851,256. The Intercity Loan recognizes the cost of street damages related to the provision of water services until the mid-1990s. Since the mid-1990s, the Division has paid an annual street damage charge to the General Fund. This annual street damage charge is included in the O&M expenses shown in Table 2-2 . Since t he last rate study, the Division has been making annual principal and interest payments. Table 2-8 shows the principal and interest payments for the planning period.

Table 2-8: Proposed Intercity Loan Debt Service

2.4 Operating Statement
Water utility revenues and expenses are tracked in three funds: 1) Fund 601 (Water Operations); 2) Fund 602 (Water Capital); and 3) Fund 603 (Water Replacement). This section shows the revenues and expenses in each fund.

2.4.1 Fund 601 (Water Operations)
Table 2-9 and Table 2-10 are the Operating Statement for the Water Fund 601. Table 2-9 shows the sources of funds in Water Fund 601, which includes rate revenues and other income, including non-rate revenues. The total sources of funds is the sum of the beginning year fund balance, plus rate revenues and other income. Lines 8 thru 12 show the projected percentage rate increases in overall water rate revenues in each fiscal year. Water rate revenue increases were determined to pay the Division’s expenses through FY 27/28, and meet the minimum reserve and debt service coverage ratio targets. Proposed rate increases would be effective on January 1 of each year.

Projected Principal and Interest Payment (1)
Revenue Bond Debt Issuance FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Revenue and Refunding Bonds 2015 $939,300 $0 $0 $0 $0
Water Revenue Bonds Series 2020A 1,720,175 1,714,575 1,717,775 1,719,375 1,719,375 Total $2,659,475 $1,714,575 $1,717,775 $1,719,375 $1,719,375 Projected Principal and Interest Payment (1)
Intercity Loan FY 23/24 FY 24/25 FY 25/ 26 FY 26/27 FY 27/28 Outstanding Principal Beginning Year $10,632,394 $9,851,256 $9,037,481 $8,189,708 $7,306,516 Principal Payment $781,139 $813,774 $847,773 $883, 192 $920,091 Interest Payment $421,358 $388,722 $354,723 $319, 304 $282,405 Outstanding Principal, End of Year $9,851,256 $9,037,481 $8,189,708 $7,306,516 $6,386,425

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Table 2-9: Sources of Funds, Fund 601

Table 2-10 shows Water Fund 601 Uses of Funds. This table shows the payment of O&M Expenditures from Fund 601, along with Debt Service and transfers to Fund 603, which will be discussed later in the report.

Table 2-10: Uses of Funds, Fund 601

2.4.2 Fund 602 (Water Capital)
Revenues in Fund 602, (Water Capital), are funded from the Capital Improvement Charge, and by unspent revenue bond proceeds from the Series 2020A Revenue Bonds. . Table 2-11 shows revenues for the Division’s Water Capital fund. CIP expenses are both funded and paid for within Fund 602.

Line SOURCES OF FUNDS Projected
No FUND 601 (WATER OPERATIONS) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 Beginning of Year Balance, Fund 601 $30,046,648 $23,183,148 $18,846,897 $17,795,639 $14,886,313 2 3 Water Sales Revenues
4 Water Sales Revenues under Existing Rates $38,147,168 $38,143,634 $38,139,874 $38,135,874 $38,134,211 5 Additional Revenues From Rate Increases
6 Percent Months
7 Fiscal Year Increase of Revenue
8 FY 23/24 6.40% 4 $815,333 $2,445,998 $2,445,998 $2,445,998 $2,445,998 9 FY 24/25 6.40% 4 867,514 2,602,542 2,602,542 2,602,542 10 FY 25/26 6.40% 4 923,035 2,769,105 2,769,105
11 FY 26/27 6.40% 4 982,109 2,946,328
12 FY 27/28 2.50% 4 408,189
13 Total Additional Revenues From Rate Increases $815,333 $3,313,512 $5,971,575 $8,799,754 $11,172,162 14 15 Total Water Sales Revenues $38,962,501 $41,457,146 $44,111,449 $46,935,628 $49,306,373 16 17 Other Income $885,407 $950,045 $965,097 $1,008,046 $1,027,649 18 Total Revenues $39,847,908 $42,407,191 $45,076,546 $47,943,674 $50,334,023 19 Total Sources of Funds $69,894,556 $65,590,340 $63,923,444 $65,739,313 $65,220,336 Line USES OF FUNDS Projected
No FUND 601 (WATER OPERATIONS FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/ 28 1 O&M Expenditures $32,681,566 $34,029,371 $35,319,533 $40,949,853 $41,444,938 2 Revenue Bond Debt Service 1,202,496 1,202,496 1,202,496 1,202,496 1,202,496 3 Intercity Loan Debt Service 2,659,475 1,714,575 1,717,775 1,719,375 1,719,375 4 Capital Equipment 314,000 157,000 157,000 157, 000 157,000 5 Transfer to Fund 602 6,000,000 6,000,000 4,000,000 3,000,000 2,000,000 6 Transfer to Fund 603 3,853,870 3,640,000 3,731,000 3,824,275 3,919,882 7 Total Uses of Funds $46,711,408 $46,743,442 $46,127,805 $50,853,000 $50,443,691 8 9 End of Year Balance, Fund 601 $23,183,148 $18,846,897 $17,795,639 $14,886,313 $14,776,645

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Table 2-11: Sources of Funds, Fund 602

Table 2 -11, l ines 8-12, Revenues from Rate Increases are shown as percentage increases over current Capital Improvement Charge revenues. Table 2-12 shows the expenditures from Fund 602. The expenditures are capital improvements.

Table 2-12: Uses of Funds, Fund 602

Table 2-12, Line 1, Capital Improvements, is shown as a five-year capital cost estimate of $44,291,469 over the five- year planning period.

2.4.3 Fund 603 (Water Replacement)
Table 2-13, Sources of Funds, Fund 603, (Water Replacement), pays for replacements, such as pipes, meters, valves, and hydrants. Fund 603 is funded by transfers from Fund 601, (Water Operations).

Table 2-13: Sources of Funds, Fund 603

Table 2-14, Uses of Funds, Fund 603 (Water Replacement), shows that Replacement Expenditures are projected to begin at $3,807,227 in FY 23/24, and increase gradually to $3,919,882 in FY 27/28.

Line SOURCES OF FUNDS Projected
No FUND 602 (WATER CAPITAL) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 Beginning of Year Balance, Fund 602 $4,341,667 $663,606 $503,051 $913,439 $758,292 2 2 Capital Improvement Charge Revenues
3 Revenues Under Existing Rates $2,320,206 $2,320,206 $2,320,206 $2,320,206 $2,320,206 4 Additional Capital Improvement Charge Revenues
5 6 Months
7 Fiscal Year % Increase of Revenue
8 FY 23/24 6.40% 4 $49,498 $148,493 $148,493 $148,493 $148,493 9 FY 24/25 6.40% 4 0 52,666 157,997 157,997 157,997
10 FY 25/26 6.40% 4 0 0 56,036 168,109 168,109
11 FY 26/27 6.40% 4 0 0 0 59,623 178,868
12 FY 27/28 2.50% 4 0 0 0 0 24,781
13 Total Additional Revenues $49,498 $201,159 $306,490 $534,222 $678,248 14 15 Total Capital Improvement Charge Revenues $2,369,704 $2,521,365 $2,626,696 $2,854,428 $2,998,454 16 Remaining 2020A Revenue Bond Proceeds 6,800,000
17 Transfer From Fund 601 6,000,000 6,000,000 4,000,000 3,000,000 2,000,000 18 Total Sources of Funds, 602 $19,511,371 $9,184,971 $7,185,783 $6,767,867 $5,756,746 Line USES OF FUNDS Projected
No FUND 602 (WATER CAPITAL) FY 23/24 FY 24/25 FY 25/ 26 FY 26/27 FY 27/28 1 Capital Improvements $18,847,765 $8,681,920 $6,272,344 $6,009,575 $4,479,865 2 Total Use of Funds $18,847,765 $8,681,920 $6,272,344 $6,009,575 $4,479,865 3 4 Ending Year Fund Balance, Fund 602 $663,606 $503,051 $913,439 $758, 292 $1,276,881 Line SOURCES OF FUNDS Projected
No FUND 603 (WATER REPLACEMENT) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 Beginning of Year Balance, Fund 603 $894,498 $941,141 $941,141 $941,141 $941,141 2 3 Transfer From Fund 601 3,853,870 3,640,000 3,731,000 3,824,275 3,919,882 4 Total Sources of Funds, Fund 603 $4,748,368 $4,581,141 $4,672,141 $4,765,416 $4,861,023

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Table 2-14: Uses of Funds, Fund 603

2.4.4 Financial Performance Indicators
The Financial Performance Indicators used to evaluate water utility revenues are: 1) End of Year Reserve Balance; 2) Debt Service Coverage Ratio. Table 2-15 shows these Financial Performance Indicators for each year in the five-year planning period.

The Division’s reserve policy is that reserves must exceed the sum of:

1. Two months of O&M expenses

2. $500,000 for contingencies

3. 5% of the net plant value
Table 2-15 shows that this policy is met in each of the five years in the planning period. Table 2 -15 also shows the Debt Service Coverage Ratio (DSCR) calculation. A DSCR of at least 1.75 is maintained throughout the five -year planning period. This DSCR exceeds the requirement of the City’s Revenue Bond Ordinances and was used to improve the financial position of the utility. The DSCR criteria of 1.75 was used to position the City with the financial markets in anticipation of future debt issuances.

Table 2-15: Financial Performance Indicators

Line USES OF FUNDS Projected
No FUND 603 (WATER REPLACEMENT) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 Replacement Expenditures $3,807,227 $3,640,000 $3,731,000 $3,824,275 $3,919,882 2 Total Use of Funds $3,807,227 $3,640,000 $3,731,000 $3,824,275 $3,919,882 3 4 Ending Year Fund Balance, Fund 603 $941,141 $941,141 $941,141 $941,141 $941,141 Line Projected
No FINANCIAL PERFORMANCE INDICATORS FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 End of Year (EOY) Reserve Balance
2 Criteria: Total combined fund 601,602,603 Reserves Exceeds Minimum Reserve Balance 3 Combined EOY 601,602,603 Fund Balance $24,787,896 $20,291,090 $19,650,220 $16,585,747 $16,994,667 4 5 Minimum Reserve Balance
6 2 months O&M Expenses $5,647,344 $5,871,978 $6,087,005 $7,025,392 $7,107,906 7 Plus $500,000 for Contingencies 500,000 500,000 500,000 500,000 500,000 8 Plus 5% of Net Plant 8,596,201 8,820,908 8,922,414 9,004,721 9,012,027 9 Subtotal $14,743,545 $15,192,885 $15,509,419 $16,530,112 $16,619,933 10 Exceeds Target? Yes Yes Yes Yes Yes
11 12 Debt Service Coverage Ratio
13 Criteria: Debt Service Coverage Ratio > 1.75
14 Gross Revenue $42,217,612 $44,928,556 $47,759,278 $50,798,102 $53,332,477 15 Less O&M Expenses ($32,681,566) ($34,029,371) ($35,319,533) ($40,949,853) ($41,444,938) 16 Revenue Available for Debt Service $9,536,045 $10,899,185 $12,439,745 $9,848,249 $11,887,539 17 18 Revenue Bond Debt Service $2,659,475 $1,714,575 $1,717,775 $1,719,375 $1,719,375 19 Debt Service Coverage Ratio 3.59 6.36 7.24 5.73 6.91 20 Exceeds Target? No No No No No

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Line 15 shows O&M expenses subtracted from gross revenues. For purposes of de bt service coverage calculation, our calculations do not include intercity loan interest and intercity loan principal.

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Section 3
Rate Structure Development
This section outlines the proposed water rate structure. The rate structure is developed using a Cost- of-Service Analysis, completed consistently with industry standards. This Cost-of-Service Analysis uses methodology from the American Water Works Association’s M1 Manual, Principles of Water Rates, Fees, and Charges (7th Edition).

3.1 Cost-of-Service Analysis
The first step in a Cost-of-Service analysis is functionalization, where water system expenses are grouped according to the functions of a water system. Water functions include pumping, storage, transmission and distribution (T&D), customer, meter, and administration. Table 3-1 shows the functionalization of the Division’s O&M expenses for FY 23/24. Additional detail is available in Appendix B.

Some of the key aspects of the functionalization calculations are:

1. Labor costs were functionalized based on a review, with division staff, of the job responsibilities of Water Division employees.

2. All source of supply expenses are included in Table 3-1 in the Rate Tier Calculations.

3. All PFAS expenses are included in the rate tier calculations.

Table 3-1: Water System Cost-of-Service Analysis, FY 23/24 - Functionalization of O & M Expenditures

Notes:

Table 3-2 shows the Functionalization of the Capital Improvement Plan. Forty one percent of the CIP costs are related to transmission and distribution, 26% of these costs are related to storage.

FY 23/24 Rate Tier Fire
Total Pumping Storage T&D Customer Meter Admin Calculations Protection Salaries, Wages, and Benefits (1) $7,803,861 $1,005,546 $752,867 $3,735,573 $819,514 $43,743 $251,673 $1,172,243 $22,708 Water Use Objectives Compliance 2,000,000 0 0 0 0 0 0 2,000,000 0 Administrative Services Charge (1) 1,402,200 0 0 0 0 0 1,402,200 0 0 Street Repair Costs (1) 814,455 0 0 407,228 407,228 0 0 0 0 Water Costs (1) 19,498,021 0 0 0 0 0 0 19,498,021 0
Other O&M (1) (2) 1,163,029 136,173 99,532 511,004 97,767 14,434 207,608 89,017 7,494 Total (1) (3) $32,681,566 $1,141,719 $852,399 $4,653,805 $1,324,509 $58,177 $1,861,481 $22,759,281 $30,202 (1) See Appendix B for more detail.
(2) Includes contractual services, commodities, registration fees, tuition and training, membership fees, and books/publications. (3) Small discrepancies in total functionalized costs are due to rounding in the cost-of-service analysis.

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Table 3-2: Water System Cost-of-Service Analysis - Functionalization of the Capital Improvement Plan

Table 3-3 shows the Functionalization of the Rate Revenue Requirement, for FY 23/24. Included in the rate revenue requirement are O&M expenditures, debt service payments, capital improvements and replacement expenditures.

In FY 23/24, these expenditures are partially offset by non-rate revenues and use of reserves.

Project
Projected
Cost Pumping Storage T&D Customer Meter Admin
Rate Tier
Calculations
Fire
Protection
Magnolia Reservoirs and Booster
Pump Station Project (2)
$800,000 40% 60%
SCADA Implementation Project
(3)
4,641,956 50% 50%
SCADA -FP2 Pressure Monitoring
Improvements
419,180 50% 50%
SCADA - HP4-5 SCADA - Trask &
Westhaven
1,450,000 50% 50%
SCADA - HP1-3 SCADA - Mag,
Lampson, & WGG
900,000 50% 50%
Water Improvement Project
Woodbury Rd and Taft St (4)
1,200,000 80% 6% 6% 8%
Water Improvement Project -
Orangewood and Yorkshire Ave
(~7,400 ft) (4)
3,956,942 76% 9% 9% 6%
Water Improvement Project -
Chapman Ave and Dale St
(~10,000 ft) (4)
5,000,000 76% 9% 9% 0% 0% 6%
Well assessment (Well 16, 19, 57,142 100%
Well 19 Construction 2,200,000 100%
Water Improvement Project -
Woodbury Ave & Anabel Ave
(~3,500 ft)
2,097,545 100%
Water Main Replacement (2
miles each year) (4)
10,084,000 76% 9% 9% 6%
Design and Construction of
Lampson and Trask Reservoirs
Rehabilitation
6,830,000 100%
Various Residential Streets
Projects N of GG Blvd & E of Dale
(5)
1,200,000 50% 50%
Water Transmission Line Study 100,000 100%
Well 26 Property Purchase 1,643,000 100%
Total $42,579,765 $4,082,710 $11,015,568 $17,628,661 $2,385,685 $2,385,685 $0 $3,843,000 $1,238,457 As Percent 100% 10% 26% 41% 6% 6% 0% 9% 3%
Notes:
(1) Functionalization percentages developed by FG Solutions based on project descriptions provided the City and conversations with City staff. See Appendix B for more detail.
(2) Source: City staff, 7/6/23 email.
(3) SCADA facilitates communcation between pumps and reservoirs, and are functionalized accordingly. (4) per City staff, 7/5/23 email. Percentage allocation to customers, meters, and hydrants is based on the estimated costs of these items. Service lines and meters portion of this project is divided between customer and meters. (5) This project is entirely the replacement of service lines and meters, per City staff 7/5/23.

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Table 3-3: Functionalization of Rate Revenue Requirement

In addition, source of supply costs are carried through the allocation step to be used in the rate tier calculations described later in this section. Table 3-4 shows the Allocation of FY 23/24 Rate Revenue Requirement.

Table 3-4: Allocation of FY 23/24 Rate Revenue Requirement

Some of the key aspects of the allocation calculations are:

1. Pumping and storage costs are allocated to base (also referred to as average day) demand and maximum day demand. This is because pumping and reservoirs are sized to meet peak day demands, and they also are in use every day on a 24/7 basis.

2. A portion of storage costs are attributed to providing fire protection, based on an assessment of the amount of reservoir storage that is needed for fire protection, as described in the City’s 2008 Water Master Plan.

FY 23/24 Rate Tier Fire
Total Pumping Storage T&D Customer Meter Admin Calculations Protection O&M Expenses (2) $32,681,566 $1,141,719 $852,399 $4,653,805 $1,324,509 $58,177 $1,861,481 $22,759,281 $30,202 Debt Service (3) 3,861,971 297,153 687,676 1,626,047 735,569 134,321 1,680 260,505 119,019 Capital Equipment (4) 314,000 0 0 314,000 0 0 0 0 0
Capital Improvements (5) 18,847,765 1,807,195 4,875,998 7,803,257 1,056,014 1,056,014 0 1,701,089 548,198 Water Main Replacement (6) 3,807,227 0 0 2,893,493 342,650 342,650 0 0 228,434 Plus Revenue Adjustments (Wri 55,214 0 0 0 0 0 55,214 0 0 Less Other Revenues 0 0 0 0 0 0 0 0 0
Other Revenues (97,032) 0 0 0 0 0 (97,032) 0 0
Investment Income (151,683) 0 0 0 0 0 (151,683) 0 0
Remaining 2020A Bond Proce (6,800,000) (652,010) (1,759,189) (2,815,302) (380,995) (380,995) 0 (613,728) (197,782) Capital Improvement Charge (2,369,704) (227,216) (613,053) (981,093) (132,771) (132,771) 0 (213,876) (68,924) Less Change in Fund Balance (7) (10,494,918) (1,006,293) (2,715,080) (4,345,053) (588,016) (588,016) 0 (947,210) (305,251) Total Rate Revenue Requiremen $39,654,407 $1,360,548 $1,328,751 $9,149,154 $2,356,960 $489,380 $1,669,660 $22,946,061 $353,896 Notes:
(1) See Appendix B for more detail. All discrepancies in total functionalized costs are due to rounding in the cost-of-service analysis.
(2) See Table 3-1.
(3) Debt service consists of Revenue Bond Debt and an Intercity Loan. Revenue Bond debt is functionalized per the City's net plant assets. Intercity loan debt is for past street repairs, and is functionalized 50% to transmission and distribution and 50% to customers.
(4) Capital equipment expenses are associated with the Division's Water Distrubtion Section. (5) See Table 3-2.
(6) Water Main Replacement Projects are functionalized based on the functionalization of similar projects in the Capital Improvement Program.
(7) Functionalized according to the Capital Improvement Plan (Table 3-2) because remaining revenue bond proceeds, Capital Improvement Charge revenues, and use of Fund Balance is all used to pay for capital improvements.

Private Publi c and
FY 23/24 Rate Tier Fire P rivate Fire
Projection Base Max D ay Max Hour Customer Meter Calculations Protection Protection Water System Function
Pumping $1,360,548 $1,046,575 $313,973 $0 $0 $0 $0 $0 $0 Storage 1,328,751 1,109,632 170,983 0 0 0 0 0 48,136
T&D 9,149,154 3,151,375 945,413 1,575,688 0 0 0 0 3,476,679 Customer 2,356,960 0 0 0 2,356,960 0 0 0 0
Meter 489,380 0 0 0 0 489,380 0 0 0
Administration 1,669,660 589,271 158, 806 174,940 261,680 54,333 0 39,291 391,340 Rate Tier Calculations 22,946,061 0 0 0 0 0 22,946,061 0 0 Fire Protection 353,896 0 0 0 0 0 0 353,896 0
Reallocate Public FP 0 0 0 0 1,856,414 1,856,414 0 (393,187) (3,319,641) Total $39,654,410 $5,896,853 $1,589,175 $1,750,628 $4,475,054 $2,400,127 $22,946,061 $0 $596,514 Percent of Total 100% 15% 4% 4% 11% 6% 58% 0% 2%
Extra Capacity Customer

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3. Transmission and distribution system expenses are allocated to base , maximum day, and maximum hour demands because sizing of pipes also considers maximum hour demands. A portion of transmission and distribution expenses is also allocated to fire protection, recognizing that pipes are sized to provide fire flows.

4. Water supply costs are carried through to the rate tier calculations. In the Commodity Delivery Charge calculations described below, the charges for each rate tier are based on water supply costs.

5. Administrative expenses are allocated based on a weighted average of all other expenses.

6. Fire protection expenses, and the reallocation of public fire protection expenses, are discussed in further detail in Appendix C of this report.

Table 3 -5 defines terms and clarifies the relationship between Water Service Characteristics and how costs are recovered in the proposed rate structure. The terms base, max-day, and max-hour demand are used in the industry standard publication, AWWA M1 Manual, Principals of Water Rates, Fees, and Charges, 7 th Edition. Fixed charges refer to the Bi-Monthly Minimum Charge and the Capital Improvement Charge.

Table 3-5: Relationship Between Water Service Characteristics and Rate Structure

3.2 Proposed Rate Schedule
The proposed rate structure was developed collaboratively by the Consultant and the Division, with input from City Council that was obtained during the four study sessions that occurred in 20 23. Table 3-6 shows the proposed Bi- Monthly Minimum charge for each meter size.

The proposed rate structure is based on the following goals:

1. Balance revenue stability of higher fixed charges with financial impacts to rate payers that occur when fixed charges are raised.

2. Collect 28% of revenues from fixed charges.

3. Maintain the two- tiered increasing block Commodity Delivery Charge structure. The first tier includes locally produced groundwater. The second tier includes both locally produced ground water and imported water.

4. Discontinue the Low-Water User discount.

5. Maintain the Senior CARE discount of $10 per billing period.

Water Service Characteristics
Base Demand Mostly Through Commodity Charges, Partially Through Fixed Charges Max Day and Max Hour Commodity Delivery Charges
Customer and Meter Fixed Charges
Rate Tier Calculations Commodity Delivery Charges
Private Fire Protection Fire Service Costs
How Costs are Recovered in Rate Structure

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Table 3-6: Proposed Bi-Monthly Minimum Charges

Table 3-7 shows the current and proposed Bi-Monthly Capital Improvement Charge for each meter connection size.

The Capital Improvement Charge is increased to provide additional funds to complete the CIP. However, even at the proposed FY 27/28 charges, the Capital Improvement Charge does not fully fund the CIP; a portion of the other water rate revenues will also provide the needed revenue. This is evidenced by the continued transfers from Fund 601 (Water Operations) to Fund 603 (Water Replacement), and by the use of revenue bond proceeds in Fund 602 (Water Capital) (see Tables 2-10 and 2-11).

Table 3-7: Proposed Bi-Monthly Capital Improvement Charge

Table 3-8 shows the proposed Commodity Delivery Charges. The proposed charges retain the existing two -tiered rate structure. The proposed Commodity Delivery Charges do not include future increases in water supply costs from MWD and OCWD. These future increases will be recovered through annual Commodity Delivery Charge pass-through adjustments.

Table 3-8: Proposed Commodity Delivery Charges

Tier 1 is based on the cost of locally produced groundwater. Tier 2 is based on the cost of locally produced ground water and imported water. Additional detail on rate tier calculations is included in Appendix C. Table 3 -9 defines the amount of water in the first tier, for each meter connection size. The amount of water included in Tier 1 is unchanged from current City Ordinance. The proposed rate structure is intended to be consistent with the requirements of Proposition 218.

Meter Proposed Bi-Monthly Minimum Charges
Size Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 5/8 x 3/4" $33.85 $35.10 $38.23 $40.47 $42. 84 $43.68
1" $50.48 $54.54 $61.54 $65.77 $70. 29 $72.39
1-1/2" $78.20 $87.28 $100.39 $107.95 $116. 05 $120.24
2" $111.45 $126.55 $147.01 $158.57 $170. 96 $177.65
3" $200.15 $231.29 $271.34 $293.55 $317. 38 $330.77
4" $299.92 $349.13 $411.20 $445.40 $482. 10 $503.03
6" $577.08 $676.44 $799.72 $867.20 $939. 66 $981.52
8" $909.67 $1,069.22 $1,265.94 $1,373.37 $1,488.73 $1,555.71 10" $1,353.12 $1,592.92 $1,887.56 $2,048.26 $2,220.83 $2,321.29 Meter Proposed Bi-Monthly Capital Improvement Charge
Size Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 5/8 x 3/4" $7.00 $7.45 $7.92 $8.43 $8.97 $9.20
1" $17.50 $18.62 $19.81 $21.08 $22.43 $22.99
1-1/2" $35.00 $37.24 $39.62 $42.16 $44.85 $45.98
2" $56.00 $59.58 $63.39 $67.45 $71.77 $73.56
3" $112.00 $119.16 $126.79 $134.90 $143.53 $147.12
4" $175.00 $186.19 $198.10 $210.78 $224.27 $229.88
6" $350.00 $372.37 $396.21 $421.56 $448.54 $459.76
8" $560.00 $595.80 $633.93 $674.50 $717.67 $735.61
10" $840.00 $893.70 $950.89 $1,011.75 $1,076.50 $1,103.41 Proposed Commodity Delivery Charges
Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Tier 1 $3.26 $3.40 $3.53 $3.83 $4.14 $4.27
Tier 2 $4.80 $5.29 $5.67 $5.84 $6.02 $6.10

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Table 3-9: Tier 1 Water Use Allowance

Table 3-10 shows the proposed Private Fire Service rates. These rates recover costs associated with transmission, distribution and storage that are related to providing fire protection services to private fire service connections.

Table 3-10: Proposed Private Fire Service Rates

3.3 Senior CARE Discount
The Division currently has a Low-Water User Discount in place. Currently, customers that use 3 hcf or less per month, or 6 hcf or less per billing period, only pay the minimum charge. They do not pay the Commodity Charge or the Capital Improvement Fee. The Low-Water User Discount program will be discontinued upon the effective date of the revised rate ordinance, if adopted by Council.

The Division has a Low-Income/Senior Discount, now called the Senior CARE Discount, intended to partially mitigate the financial impacts of the higher fixed charges. This proposed discount program has the following eligibility criteria:

1. Resident must live at the billing address.

2. The water bill must be in the resident’s name.

3. The resident must be 65 years of age or older.

4. The resident must be enrolled in Southern California Edison’s CARE program.

The Senior CARE Discount is $10 per billing period. Th is program is funded using non-rate revenues, such as late fees. The FY 22/23 budget has $170,000 in the budget for the Senior CARE Discount.

Bi-Monthly
Water Use
Meter Size Included in
(inches) Tier 1, hcf
5/8 x 3/4" 33
1" 83
1-1/2" 165
2" 264
3" 528
4" 825
6" 1,650
8" 2,640
10" 3,960
Meter Proposed Private Fire Service Rates
Size Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 1-1/2" $2.99 $3.42 $3.84 $4.09 $4.35 $4.46
2" $6.38 $7.28 $8.18 $8.70 $9.26 $9.49
3" $18.55 $21.16 $23.77 $25.29 $26.91 $27.58
4" $39.51 $45.09 $50.67 $53.91 $57.36 $58.79
6" $114.76 $130.97 $147.17 $156.59 $166.61 $170.78
8" $244.55 $279.09 $313.62 $333.69 $355.05 $363.93
10" $439.79 $501.90 $564.01 $600.11 $638.52 $654.48

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Section 4
Example Bi-Monthly Water Bill
Comparison

4.1 Introduction
In this Section, example Bi-Monthly Water Bills are shown for the typical single-family household consuming 11 hcf per month, or 22 hcf per billing period. Bi-monthly water bills are also shown for an example 50- unit multi-family property using 18 hcf per unit per billing period, and an example commercial connection with a 2” meter, consuming 500 hcf per bi-monthly billing period.

A Bi-Monthly water bill includes a Bi-Monthly minimum charge, a Capital Improvement Charge, plus a Commodity Delivery Charge. All example bills are shown using the proposed rate schedules in Section 3. Table 3-6, Proposed Bi- Monthly Minimum Charges, Table 3-7 Proposed Bi-Monthly Capital Improvement Charge, and Table 3-8, Proposed Commodity Delivery Charges. Table 3-9 Define Amount of Water in First Tier is also used to show the number of hcf to be included in the first tier, per bi-monthly billing period.

4.2 Example Bi-Monthly Bills
Table 4-1 shows the proposed Bi-Monthly bill that includes the Bi-Monthly Minimum Charge, Capital improvement Charge, and C ommodity Delivery Charges, for a typical 5/8”x 3/4” meter connection. These example bills do not include future Commodity Delivery Charge pass-through adjustments.

Table 4-1. Proposed Rate Structure for a Typical 5/8”x 3/4“ Meter

Table 4-2 shows an example water bill for a 50-unit multi-family building with a 3” meter, using 18 hcf per unit per bi-monthly billing period.

Table 4-2. Example Water Bill for a 3“ Meter, 18 hcf Bi-Monthly use per unit, 50 Unit Multi-Family

Single-Family Residence, 22 hcf Bi-Monthly Water Use
Proposed Bi-Monthly Water Bill
Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Bi-Monthly Minimum Charge $33.85 $35.10 $38.23 $40.47 $42.84 $43.68 Commodity Delivery Charge $71.72 $74.80 $77.66 $84.26 $91.08 $93.94 Capital Improvement Charge $7.00 $7.45 $7.92 $8.43 $8.97 $9.20 Total $112.57 $117.34 $123.81 $133.16 $142.89 $146.81
% Increase 4.2% 5.5% 7.5% 7.3% 2.7%
Multi-Family 50 Units, 3" Meter, 18 hcf Bi-Monthly Water Use Proposed Bi-Monthly Water Bill
Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Bi-Monthly Minimum Charge $200 $231 $271 $294 $317 $331 Commodity Delivery Charge $3,507 $3,763 $3,973 $4,195 $4,425 $4,524 Capital Improvement Charge $112 $119 $127 $135 $144 $147 Total $3,819 $4,114 $4,371 $4,623 $4,886 $5,002
% Increase 7.7% 6.3% 5.8% 5.7% 2.4%

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Section 4 Water Rate Study – Garden Grove Water Services Division

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Garden Grove Water Rate Study Report 11132023
Table 4-3 shows an example water bill for a commercial customer with a 2” meter, consuming 500 hcf per bi-monthly billing period.

Table 4-3: Water Bill Comparisons: Commercial Customer, 2" Meter, 500 hcf Bi-Monthly Water Use

4.3 Comparison with Other Utilities
To be included in the next draft
Figure 4-1 shows a comparison of bi-monthly water bills for Garden Grove and six other local utilities. The utilities used in the comparison are Golden State Water Company in west Orange County, City of Westminster, Fountain Valley, City of Orange, Anaheim, and Santa Ana.

This graph shows the bi-monthly water bill for a single-family residence with a 5/8” x 3/4” water meter, at monthly consumption ranging from 0 to 6 0 hcf/billing period. This graph shows that Garden Grove’s water rates are in the middle of the pack, compared with these six other utilities.

Figure 4-1 shows proposed water bills effective in January 2024, including the proposed 1/1/24 Garden Grove rate structure. Proposed water bills beyond 2024 are not shown in Figure 4-1 . This is because it can be misleading to compare future rates with other utilities current rates. Additional information regarding the other utilities’ rates is found in the paragraphs below Figure 4-1.

The six neighboring utilities all periodically review and update their water rate schedules. Specifics regarding each of the utilities are:
• Anaheim. Water service is provided by the Anaheim Public Utilities. Anaheim’s published rate schedules contain rates that were adopted in 2019 with rate increases approved for each year through 2023. The City’s website does not contain adopted rate increases beyond 2023. • Fountain Valley. Water service is provided by the City of Fountain Valley. In 2018, the City adopted a five- year schedule of rates with rate increases effective through 2022. The current water rates have been effective since July 1, 2022.
• Orange. Water service is provided by the City of Orange. In 2023, the City completed a Water Rate Study and adopted a five-year schedule of rates through 2027. The rates effective 1/1/24 are shown in Figure 4-

1. Additional 4 percent annual revenue increases through 2027 are incorporated into the adopted rate schedule.
• Santa Ana. Water service is provided by the City of Santa Ana. In 2019, the City of Santa Ana adopted a five-year schedule of rates with rate increases through 7/1/23. • Stanton. Water service is provided by Golden State Water, and water rates are regulated by the California Public Utilities Commission (PUC). In 2023, the PUC approved the current rates. In 2023, Golden State Water submitted a General Rate Case for proposed rates effective in 2025, 2026, and 2027. • Westminster. Water service is provided by the City of Westminster. In 2021, the City adopted a five-year schedule of rates that contains rate increases through 2025. The rates effective 1/1/24 are shown in Figure 4-1. On 1/1/25, water rates will increase approximately 6 percent.

Based on the dates of the rate structure adoption from the surrounding utilities, many of the neighboring utilities likely have not yet fully incorporated the costs of PFAS treatment into their rates. The Cities of Anaheim, Orange, Example Commercial, 2" Meter, 500 hcf Bi-Monthly Water Use Proposed Bi-Monthly Water Bill
Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028
Bi-Monthly Minimum Charge $111 $127 $147 $159 $171 $178 Commodity Delivery Charge $1,630 $1,700 $1,765 $1,915 $2, 070 $2,135 Capital Improvement Charge $56 $60 $63 $67 $72 $74
Total $1,797 $1,886 $1,975 $2,141 $2, 313 $2,386
% Increase 4.9% 4.7% 8.4% 8.0% 3. 2%

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Water Rate Study – Garden Grove Water Services Division Section 4

4-3
Garden Grove Water Rate Study Report 11132023
Santa Ana, and Westminster have a pass-through adjustment procedure similar to Garden Grove’s Commodity Delivery Charge Pass-Through Adjustment.

Figure 4-1: Water Bill Comparison of Local Utilities

$0
$50
$100
$150
$200
$250
$300
$350
0 10 20 30 40 50 60
Westminster Orange Garden Grove Anaheim
Santa Ana Fountain Valley Stanton
Bi-Monthly Water Bill
Bi-Monthly Water Use, ccf
Single-Family Avg: 22

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5-1
Garden Grove Water Rate Study Report 11132023
Section 5
Ongoing Considerations
This Rate Study and the projected rate schedule shown in Section 3 cover a Rate Study planning period through FY 27/28. There are a number of factors that will change over the next few years that have financial implications. The extent to which these factors change will influence the financial condition of the water system and the Division’s next review of water rates.

The Department should continue to monitor its financial status on an ongoing basis, and should continue to monitor the following:
• Water consumption patterns. Financial projections are based on an overall water demand of 19, 773 acre- feet per year. Changes in water demand patterns will affect revenues and the overall financial condition of the utility. If water demands differ from 19,773 acre-feet per year, the Division will need to make appropriate adjustments to capital project scheduling, debt issuance, and/or rates. • Customer growth. This Rate Study assumes no customer growth through FY 2 7/28. Customer growth increases the size of the customer base and customer growth would result in higher rate revenues. • Changes in regional water supply availability and pricing. The proposed Commodity Delivery Charges do not incorporate future increases in the cost of purchased water and increases in OCWD’s Replenishment Assessment associated with locally produced groundwater. The Division will need to monitor these costs and continue to adjust the Commodity Delivery Charge Pass Through Adjustment on an annual basis. • Capital project cost certainty. The Capital Improvement Plan contains estimates of future project costs. The actual costs will not be known until the projects are designed, bid, and built. • PFAS O&M. As the Division gains experience with operating the PFAS treatment facilities, it will be better able to project ion exchange resin changeout schedules. The actual ion exchange resin changeout schedules may result in PFAS O&M costs that differ from what is projected in this rate study. • Inflation rates. The projected rates are based on a 2.5 percent annual inflation rate for most items, and a 4.0 percent annual inflation rate for salaries and wages. Deviations in inflation rates from these values will have financial implications.
• Senior CARE Program participation. The Division will need to monitor the participation rate and make appropriate adjustments (if needed) to the amount of the discount and/or the funding source.

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Water Rate Study – Garden Grove Water Services Division

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Garden Grove Water Rate Study Report 11132023
Section 6

Appendix A: Revenue Requirement

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FINAL
City of Garden Grove Water Services Department
2023 Water Rate Study
OCTOBER 2023
Appendix A - Revenue Requirement
Table A-1 General Assumptions and Parameters
Table A-2 Metered Water Production, Water Consumption and Connection Data Table A-3 Adopted Water Rates per Ordinance 2890
Table A-4 Projected Water Costs Using FY 23/24 OCWD and MWD Costs Table A-5 Projected Increases in Water Costs to be Recovered from Future Pass-Through Adjustments Table A-6 Projected O&M Expenditures, Excluding Water Production Costs and Water Use Objectives Compliance Costs Table A-7 Existing and Future Debt Service
Table A-8 Water Utility Operating Statement
Table A-9 Revenue Calculations
Table A-10 Capital Improvement Plan
Appendix B - Cost of Service
Table B-1 Water System Cost-of-Service Analysis, FY 23/24 - Functionalization Factors Table B-2 Not Used
Table B-3 Water System Cost-of-Service Analysis - Functionalization of Phase 1 CIP Table B-4 Water System Cost-of-Service Analysis, FY 17/18 - Functionalization of Debt Service Payments Table B-5 Water System Cost-of-Service Analysis, FY 23/24 - Functionalization of O & M Expenses Net of PFAS O&M, City Admin, an d Street Damages Table B-6 Water System Cost-of-Service Analysis, FY 23/24 - Functionalization of Rate Revenue Requirement Table B-7 Water Cost-of-Service Analysis - Allocation Factors Table B-8 Water Cost-of-Service Analysis - Allocation of Rate Revenue Requirement Table B-9 Water Cost-of-Service Analysis - Re-Allocate Public Fire Protection Costs Table B-10 Identification of Costs to be Included in Rate Tier Calculations Table B-11 Supporting Calculations for Cost-of-Service Analysis Appendix C - Rate Design
Table C-1 Rate Design Calculations
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FINAL
Assumptions
Table A-1
City of Garden Grove Water Services Department
2023 Water Rate Study

General Assumptions and Parameters
General Assumptions and Parameters
1 Round -1
2 3
4 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Notes 5 General Inflation 4.0% 0.0% 4.0% 2.5% 2.5% 2.5% 1
6 Salaries and Wages Escalation 4.0% 0.0% 4.0% 4.0% 2.5% 2.5% 1, 2 7 CIP Escalation 5.0% 0.0% 4.0% 2.5% 2.5% 2.5% 1
8 Interest Income Percentage 0.65% 0.65% 0.65% 0.65% 0.5% 3 9 10 Notes:
11 (1) Federal OMB inflation projecti ons developed March 2023 project approximately 4% inflation in 2024, and 12 subsequent reductions to approximately 2.5%.
13 (2) The City has MOUs in place with all labor groups through FY 25/26 that have an approximate average annual 4% increase in salary 14 and benefits costs. So urce: City staff, 10/25/22. 15 (3) Based on the interest income in the City's FY 22/23 budget ($151,683) divided by the projected 6/30/23 combined 16 601, 602, and 603 Fund Balance of approximately $40M, plus 0.25% to acknowledge increased interest rates since the FY 22/23 budget was prepared. 17 18
19 Water Supply in Acre-feet, per Fiscal Year Use in 2022 Revenue Requirement Update 20 FY 23/24 19,773 Projected supply. Base d on actual Calendar Year 2022 data. 21 FY 24/25 and subsequent years 19,773 Projected s upply. Based on actual Calendar Year 2022 data. 22 23
24 Intercity Loan Repayment
25 Repayment Period (Years) 15
26 27
28 Debt Issuance Terms
29 Revenue Bond
30 Annual Interest Rate (%) 5.0%
31 Repayment Period (Years) 30
32 Capitalized Bond Reserve (% of Proceeds) 8.75%
33 Cost of Issuance (%) 2.0%
Line
No
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
1 Historical Metered Consumption by Fiscal Year
2 3 Metered Consumption,
4 FY million hc
f
5 FY 2010/11 10.1
6 FY 2011/12 10.2
7 FY 2012/13 10.6
8 FY 2013/14 10.8
9 FY 2014/15 9.8
10 FY 2015/16 8.8
11 FY 2016/17 8.9
12 FY 2017/18 9.5
13 FY 2018/19 9.0
14 FY 2019/20 8.8
15 FY 2020/21 9.2
16 FY 2021/22 9.0
17 FY 2022/23 8.0
18 19
Calendar Year 2022 and 2023 (YTD) Metered Consumption
20 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
21 2022 638,134 630,867 733,436 741,714 792,211 789,374 833,033 826,200 763,598 819,056 633,123 595,543 22 2023 578,764 509,035 578,541 609,587 668,150 615,863 23 24
25 26
27 28
29 30
31 32
33 34
35 36
37 38
39 40
41 0
2 4
6 8
10 12
Metered Consumption, million hcf
WetDrought
0 100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Metered Consumption, hcf/month
2022 2023
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
42 43
44 Water Consumption Data by Customer Class, Calendar Year 2022 45 46 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 2022 47 Category January February March April May June July August September October November December Total 48 Agriculture 37 61 78 100 103 117 127 134 124 72 70 37 1,060 49 Car wash 1,184 1,193 1,363 1,456 1,616 1,981 2,409 2,244 1,884 1,394 1,126 967 18,817 50 Church 1,721 1,615 2,093 2,288 2,603 2,803 2,696 2,496 2,385 2,207 1,682 1,491 26,080 51 Commercial 83,164 80,772 91,197 89,180 93,322 90, 048 94,488 94,222 91,926 191,447 84,302 83,523 1,167,591 52 Duplex 4,236 3,849 4,239 4,163 4,323 4,418 4,662 4,724 4,384 4,358 3,947 3,953 51,256 53 Hospital 4,037 3,994 4,621 4,613 4,934 4,841 5,142 4,978 4,760 4,671 4,291 4,030 54,912 54 Hotel/Motel 19,996 19,748 22,555 22,544 24,651 24,712 25,746 24,603 24,372 24,068 22,449 20,972 276,416 55 Industrial 17,966 16,350 18,425 18,205 18,858 18,785 20,772 20,940 19,922 18,332 17,016 14,817 220,388 56 Landscape 16,219 19,750 24,902 26,350 29,630 30,418 31,385 30,655 27,285 23,793 18,524 14,268 293,179 57 Laundromat 2,857 2,541 2,766 2,668 2,739 2,491 2,436 2,417 2,377 2,481 2,619 2,765 31,157 58 Multi-unit 149,788 142,280 159,010 152,772 160,433 155, 907 163,619 162,625 155,785 153,772 143,690 142,363 1,842,044 59 Private school 968 1,141 1,350 1,452 1,788 2,021 2,202 2,281 1,958 1,564 1,076 757 18,558 60 Public school 17,742 34,878 47,602 59,273 65, 832 68,485 76,297 76,028 60,683 44,484 29,427 13,692 594,423 61 Public school other 785 1,024 1,536 2,150 2,432 2,613 2,684 2,533 2,043 1,521 1,027 511 20,859 62 Sewer/Septic 336 309 385 400 421 420 439 466 447 407 340 319 4,689 63 Single family home 316,617 300,919 350,816 353,649 378,208 379,433 397,933 394,754 363,403 344,923 301,814 291,114 4,173,583 64 Townhome 481 443 498 464 456 465 484 474 471 473 434 463 5,606 65 Total 638,134 630,867 733,436 741,727 792,349 789,958 833,521 826,574 764,209 796,870 633,834 596,042 8,777,521 66 67
68 Water Consumption Data by Customer Class, Calendar Year 2023 69 70 2023 2023 2023 2023 2023 2023
71 January February March April May June
7 2 A g r i c u l t u r e 2 7 2 73 25 97 93 6
73 Car wash 874 798 968 1,140 1,298 974
74 Church 1,333 1,056 1,208 1,397 1,601 1,459
75 Commercial 82,656 75,223 85,637 85,662 90,848 75,454 76 Duplex 3,823 3,401 3,731 3,688 4,020 3,193
77 Hospital 4,099 3,937 4,425 4,024 4,332 4,168
78 Hotel/Motel 21,442 18,346 21,136 21,583 23,278 24,913 79 Industrial 15,066 13,685 15,414 15,607 16,125 10,950 80 Landscape 11,901 9,650 11,349 14,956 18,475 16,748
81 Laundromat 2,861 2,551 2,824 2,663 2,761 2,303
82 Multi-unit 141,704 124,452 141,454 141,146 148,608 132,381 83 Private school 675 622 714 893 1,119 3,265
84 Public school 13,454 10,414 12,449 26,186 28,934 44,029 85 Public school other 529 454 558 1,075 1,140 1,633
86 Sewer/Septic 291 261 295 302 345 300
87 Single family home 277,557 243,741 275,868 288,734 324,701 293,652 88 Townhome 472 417 479 472 486 405
89 Total 578,764 509,035 578,541 609,587 668,150 615,863 90 11132023 Garden Grove Water Rate Study Model
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
91 92 Tier 1 and Tier 2 Consumption, FY 22/23
93 94 Amount % of Total
95 Tier 1 Revenue $18,879,901
96 Tier 1 Unit Cost $3.26
97 Tier 1 Consumption 5,791,381 73.54%
98 99 Tier 2 Revenue 9,999,982
100 Tier 2 Unit Cost 5
101 Tier 2 Consumption 2,083,330 26.46%
102
103 Total Consumption 7,874,710 100.00%
104
105 Total consumption is calculated based on revenues divided by the rate. 106 The revenue shown is for the entire FY 22/23.
107 The rate shown is effective 1/1/23, reflecting a pass through adjustment effective 1/1/23. 108 The rate applicable for the first half of FY 22/23 is not used in this calculation. 109 The calculation methodology will result in a lo wer consumption than actually occurred, but the 110 ratio of Tier 1` to Tier 2 consumption should be reasonable. 111
112
113
July-Feb consumption as % of 12-Month Total (FY 22/23)
114 Use of this data in the model: data is used for revenue projections when rate increases occur in the middle of a fiscal year . 115
116 Unadjusted for
117 Conservation, cc
f
118 Jul-Feb total 5,538,849
119 Fiscal Year total 8,010,990
120 Jul-Feb as % of FY 69.14%
121
122
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
123 Projected Metered Water Consumption: FY 23/24 - FY 27/28 = FY 22/23 124
125 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 126 Unadjusted for Conservation 8,010, 990 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 127 Conservation Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 128 Adjusted for Conservation 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 129
130 % July-Feb 69.14% 69.14% 69.14% 69.14% 69.14% 69.14% 131 % Mar-June 30.86% 30.86% 30.86% 30.86% 30.86% 30.86% 132
133 % Tier 1 73.54% 73.54% 73.54% 73.54% 73.54% 73.54%
134 % Tier 2 26.46% 26.46% 26.46% 26.46% 26.46% 26.46%
135
136 July-Feb cc
f
137 Tier 1 4,073,457 4,073,457 4,073,457 4,073,457 4,073,457 4,073,457 138 Tier 2 1,465,342 1,465,342 1,465,342 1,465,342 1,465,342 1,465,342 139 Mar-June cc
f
140 Tier 1 1,818,150 1,818,150 1,818,150 1,818,150 1,818,150 1,818,150 141 Tier 2 654,042 654,042 654,042 654,042 654,042 654,042 142 Total 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 143
144
145
FY 22/23 Number of Water System Connections
146
147 FY 22/23 Connections Billed by Meter Size (1) Number of Water Connections (FY 22/23 148 All Accounts Fire Service (Excludes Fire Service Connections) 149 Connection No. of Meter No. of Connections
150 Meter size Count Size (in) Connections Size (in) Excluding City City Total 151 None 4 None 0 None 4
152 5/8"x3/4" 28,529 5/8"x3/4" 0 5/8"x3/4" 28,529
153 1" 3,826 1" 0 1" 3,826
154 1 1/2" 867 1 1/2" 3 1 1/2" 864
155 2" 755 2" 26 2" 729
156 3" 60 3" 3 3" 57
157 4" 239 4" 114 4" 125
158 6" 318 6" 262 6" 56
159 8" 179 8" 177 8" 2
160 10" 10 10" 10 10" 0
161 Total 34,787 Total 595 Total 34,192
162
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
163
164
165 Customer Class None 5/8"x3/4" 1" 1 1/2" 2" 3" 4" 6" 8" 10" 166 Agriculture 1
167 Car Wash 2 7
1 6 8 C h u r c h 81 21 51 2 1 1
169 Commercial 519 493 290 280 13 12 4
170 Duplex 173 74 3
171 Fire service 3 26 3 114 262 177 10
1 7 2 H o s p i t a l 11 423
1 7 3 H o t e l / M o t e l 21816 1 0
174 Industrial 65 83 86 5 0362
175 Landscape 23 96 94 146 6
176 Laundromat 1 350 11
177 Multi-unit 62 813 4 149 25 39 26
178 Private school 1 4 5 2
179 Public school 196 4 65
180 Public school-FS 4 2 192
181 Public school other 4
1 8 2 S e w e r / S e p t i c 3 5311
183 Single family home 4 27,622 2,185 17 4 1
184 Townhome 20 59 4
185 Totals 4 28,529 3,826 867 755 60 239 318 179 10
186
187 (1) Source: City staff 3/27/2023
188
189
FY 22/23 Connections Billed By Meter Size
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
213 Historical Water Production, Acre Feet per Year
214
215 FY 19/20 21,979
216 FY 20/21 23,164
217 FY 21/22 22,105
218 Nov 21 - Oct 22 21,385
219 CY 22 21,385
220 FY 22/23 19,773
221
222
223
Actual Water Production, Calendar Year 2022
224 2022
225 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total 226 Local Groundwater
227 Non-PFAS wells (16, 20, 22, 25, 26,
2 971 752 723 446 283 981 643 673 943 381 555 805 8,158 228 Well 21 324 326 363 350 346 276 339 328 341 316 314 344 3,969 2 2 9 L a m p s o n ( W e l l s 2 3 , 2 8 , 3 1 ) 1 9 4 1 5 2 1 7 4 1 4 2 1 2 1 2 0 7 1 6 2 7 10000 1 , 2 2 3 2 3 0 W e l l 3 0 0 00108 6 8 3 0 4 3 0 5 1 2 9 5 2 8 4 1 , 0 4 0 2 3 1 W e l l 1 9 0 000000000000
2 3 2 W e l l 2 9 0 01 1 100000000 1 2
233 Subtotal, Local Groundwater 1,490 1,230 1,261 951 750 1,472 1,212 1,377 1,314 749 1,164 1,434 14,403 234
235 Imported Water 19 295 530 761 1,233 515 859 713 637 1,028 368 24 6,982 236
237 Total Water Production 1,509 1,525 1,791 1,712 1,983 1,987 2,070 2,090 1,951 1,778 1,531 1,458 21,385 238
239 % of Water Production
240 Local Groundwater 99% 81% 70% 56% 38% 74% 59% 66% 67% 42% 76% 98% 67% 241 Purchased 1% 19% 30% 44% 62% 26% 41% 34% 33% 58% 24% 2% 33% 242 Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 243 Source: City, 4Q 2022
244
245
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
246 "Baseline" Water Production, FY 22/23, Prior to Conservation Adjustment 247 Use of this data in the model: this data is used to project water purchase, water production, and PFAs treatment expense pro jections. 248 Key assumptions:
249 1. July 2022 - June 2023 = Actual Production Data. (Source: City staff, 8/10/23) 250 2. Adjusted FY 22/23 Production = Actual FY 22/23 Prouction 251 3. Local Groundwater production adjusted to that annual total % Local Groundwater = 85%. (Source: City staff, 5/4/23) 252 4. Jan-Jun imported water = 0, to approximately match FY 22/23 actual. 253 Adjusted FY 22/23 Production so BPP = 85%
254 Actual 2022 Actual Actual (1) Prior to Conservation Adjustment 255 Jul Aug Sep Oct Nov Dec Jan-Jun23 FY 22/23 Jul-Dec Jan-Jun Total 256 Local Groundwater
257 Non-PFAS (16, 20, 22, 25, 26, 27) 643 673 943 381 555 805 5,210 9,211 4,367 5,214 9,594 258 Well 21 339 328 341 316 314 344 1,772 3,755 2,164 1,774 3,911 2 5 9 L a m p s o n ( W e l l s 2 3 , 2 8 , 3 1 ) 1 6 2 7 10000 2 3 2 5 7 2 5 5 2 3 2 6 8 260 Well 30 68 304 30 51 295 284 1,237 2,269 1,126 1,238 2,363 2 6 1 W e l l 1 9 0 0000000 000
2 6 2 W e l l 2 9 0 00000 6 4 5 6 4 5 0 6 4 6 6 7 2
263 Subtotal, Local Groundwater 1,212 1,377 1,314 749 1,164 1,434 8,887 16,136 7,912 8,895 16,807 264
265 Imported Water 859 713 637 1,028 368 24 8 3,637 2,966 0 2,966 266
267 Total Water Production 2,070 2,090 1,951 1,778 1,531 1,458 8,895 19,773 10,878 8,895 19,773 268
269 % of Water Production
270 Local Groundwater 59% 66% 67% 42% 76% 98% 99.9% 81.6% 73% 100% 85% 271 Purchased 41% 34% 33% 58% 24% 2% 0.1% 18.4% 27% 0% 15% 272 Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 273
274
275
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
276 Projected Water Production by Source
277 FY 23/24 FY 24/25
278 2023 2024 Total 2024 2025 Total
279 Jul - Dec Jan - Jun FY 23/24 Jul - Dec Jan - Jun FY 24/25 280 Conservation Adjustment 0% 0% 0% 0% 0% 0%
281
282 Local Groundwater (1) (2) (3)
283 Non-PFAS wells 1,948 2,931 4,879 1,948 2,400 4,348
284 Well 21 1,637 1,637 3,273 1,637 1,637 3,273
285 Lampson (Wells 23, 28, 31) 1,831 1,831 3,662 1,831 1,831 3,662 286 Well 30 1,110 1,110 2,219 1,110 1,110 2,219
287 Well 19 0 0 0 0 532 532
288 Well 29 1,387 1,387 2,774 1,387 1,387 2,774
289 Subtotal, Local Groundwater 7,912 8,895 16,807 7,912 8,895 16,807 290
291 Imported Water 2,966 0 2,966 2,966 0 2,966
292
293 Total Water Production 10,878 8,895 19,773 10,878 8,895 19,773 294
295 % of Water Production
296 Local Groundwater 73% 100% 85% 73% 100% 85%
297 Purchased 27% 0% 15% 27% 0% 15%
298 Total 100% 100% 100% 100% 100% 100%
299
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Water Production, Water Consumption, and Connection Data Table A-2
City of Garden Grove Water Services Department
2023 Water Rate Study
300 FY 25/26 FY 26/27 (2) FY 27/28 (2)
301 2025 2026 Total 2026 2027 Total 2027 2028 Total
302 Jul - Dec Jan - Jun FY 25/26 Jul - Dec Jan - Jun FY 26/27 Jul - Dec Jan - Jun FY 27/28 303 Conservation Adjustment 0% 0% 0% 0% 0% 0% 0% 0% 0%
304
305 Local Groundwater (1) (2) (3)
306 Non-PFAS wells (16) 1,052 0 1,052 0 0 0 0 0 0
307 Well 21 1,637 1,637 3,273 1,470 1,467 2,938 1,470 1,467 2,938 308 Lampson (Wells 23, 28, 31) 1,831 1,831 3,662 1,553 1,553 3,107 1,553 1,553 3,107 309 Well 30 1,110 1,110 2,219 943 943 1,886 943 943 1,886 310 Well 19 555 555 1,110 444 444 888 444 444 888
311 Well 29 1,387 1,387 2,774 1,276 1,276 2,552 1,276 1,276 2,552 312 Well 22 0 610 610 610 610 1,221 610 610 1,221
313 Well 26 0 555 555 555 555 1,110 555 555 1,110
314 Well 27 0 610 610 610 610 1,221 610 610 1,221
315 Well 16 (no PFAs treatment) 0 0 0 0 0 0 0 0 0
316 Well 20 0 666 666 666 666 1,331 666 666 1,331
317 Well 25 0 277 277 277 277 555 277 277 555
318 Subtotal, Local Groundwater 7,570 9,237 16,807 8,405 8,402 16,807 8,405 8,402 16,807 319
320 Imported Water 2,966 0 2,966 2,966 0 2,966 2,966 0 2,966 321
322 Total Water Production 10,878 8,895 19,773 10,878 8,895 19,773 10,878 8,895 19,773 323
324 % of Water Production
325 Local Groundwater 70% 104% 85% 77% 94% 85% 77% 94% 85% 326 Purchased 27% 0% 15% 27% 0% 15% 27% 0% 15%
327 Total 97% 104% 100% 105% 94% 100% 105% 94% 100%
Notes:
(1) Source: City staff, 5/30/23. City data projects 18,177 AFY, based on a BPP of 85% and CY 2022 production of 21,385 AFY.

In August 2023, City staff provided direction that the Rate Study should be based on FY 22/23 production of 19,773 AF. The projected production from each source was reduced proportionally from the City's 5/30/23 data to match the lower production observed in FY 22/23.

In some years, non-PFAS well production adjusted to make half-year totals match FY 22/23 production data from groundwater and imported water. (2) FY 26/27 and FY 27/28: 3 AF subtracted from Well 21 production to make resulting groundwater production = projected production with 85% BPP. 11132023 Garden Grove Water Rate Study Model
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Adopted RatesTable A-3
City of Garden Grove Water Services Department
2023 Water Rate Study
Adopted Water Rates per Ordinance 2890
Table A-3A
Adopted Bi-Monthly Minimum Charge
Meter Size Per Ordinance 2890 Without Any Subsequent Increases Line (inches) 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 1 5/8 x 3/4" $33.85 $33.85 $33.85 $33.85 $33.85 $33.85
2 1" $50.48 $50.48 $50.48 $50.48 $50.48 $50.48
3 1-1/2" $78.20 $78.20 $78.20 $78.20 $78.20 $78.20
4 2" $111.45 $111.45 $111.45 $111.45 $111.45 $111.45
5 3" $200.15 $200.15 $200.15 $200.15 $200.15 $200.15
6 4" $299.92 $299.92 $299.92 $299.92 $299.92 $299.92
7 6" $577.08 $577.08 $577.08 $577.08 $577.08 $577.08
8 8" $909.67 $909.67 $909.67 $909.67 $909.67 $909.67
9 10" $1,353.12 $1,353.12 $1,353.12 $1,353.12 $1,353.12 $1,353.12 Table A-3B
Adopted Bi-Monthly Capital Improvement Charge
Meter Size Per Ordinance 2890 Without Any Subsequent Increases (inches) 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
10 5/8 x 3/4" $7.00 $7.00 $7.00 $7.00 $7.00 $7.00
11 1" $17.50 $17.50 $17.50 $17.50 $17.50 $17.50
12 1-1/2" $35.00 $35.00 $35.00 $35.00 $35.00 $35.00
13 2" $56.00 $56.00 $56.00 $56.00 $56.00 $56.00
14 3" $112.00 $112.00 $112.00 $112.00 $112.00 $112.00
15 4" $175.00 $175.00 $175.00 $175.00 $175.00 $175.00
16 6" $350.00 $350.00 $350.00 $350.00 $350.00 $350.00
17 8" $560.00 $560.00 $560.00 $560.00 $560.00 $560.00
18 10" $840.00 $840.00 $840.00 $840.00 $840.00 $840.00
Table A-3C
Adopted Commodity Delivery Charge, $/hcf (5)
Per Ordinance 2890 Without Any Subsequent Increases
1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
19 Tier 1 $2.86 $2.86 $2.86 $2.86 $2.86 $2.86
20 Tier 2 $4.40 $4.40 $4.40 $4.40 $4.40 $4.40

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Adopted RatesTable A-3
City of Garden Grove Water Services Department
2023 Water Rate Study
Adopted Water Rates per Ordinance 2890
Table A-3D
Adopted and Pass-Through Charges
Per Ordinance 2890 Without Any Subsequent Increases
1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
21 All Tiers $0.40 $0.40 $0.40 $0.40 $0.40 $0.40
Table A-3E
Units of Water Included in Tier 1 per Bi-Monthly Billing Period Meter Size Max hcf
(inches) Tier 1
22 5/8 x 3/4" 33
23 1" 83
24 1-1/2" 165
25 2" 264
26 3" 528
27 4" 825
28 6" 1,650
29 8" 2,640
30 10" 3,960
Table A-3F
Adopted 1/1/2019 Fire Service Rates
Meter Size Per Ordinance 2890 Without Any Subsequent Increases (inches) 1/1/23 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28
31 1 1/2" $2.99 $2.99 $2.99 $2.99 $2.99 $2.99
32 2" $6.38 $6.38 $6.38 $6.38 $6.38 $6.38
33 3" $18.55 $18.55 $18.55 $18.55 $18.55 $18.55
34 4" $39.51 $39.51 $39.51 $39.51 $39.51 $39.51
35 6" $114.76 $114.76 $114.76 $114.76 $114.76 $114.76
36 8" $244.55 $244.55 $244.55 $244.55 $244.55 $244.55
37 10" $439.79 $439.79 $439.79 $439.79 $439.79 $439.79
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs Summary of Projected Annual Costs
Estimated Estimated Estimated Estimated Estimated
Component of Water Costs FY 20/21 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Note 1 PFAS O&M Cost $2,872,745 $4,677,169 $5,554,594 $11,165,129 $11,444,257 2 Garden Grove Pumping Costs $1,111,256 $1,155,706 $1,184,599 $1,214,214 $1,244,569 3 Natural Gas $289,311 $300,884 $308,406 $316,116 $324,019 4 WOCWB Shared Water Transmission Lines $47,208 $47,208 $49,096 $50,324 $51,582 5 OCWD Replenishment Assessment $10, 487,623 $10,487,623 $10,487,623 $10,487,623 $10,487,623 1 6 MWD Tier 1 Treated Water Rate $3,585,842 $3,585,842 $3,585,842 $3,585,842 $3,585,842 1 7 MWD Readiness to Serve Charge $541,486 $541,486 $541,486 $541,486 $541,486 1 8 MWD Capacity Charge $207,834 $207,834 $207,834 $207,834 $207,834 1 9 MWD Connection Charge $492,275 $492,275 $492,275 $492,275 $492,275 1 10 MWDOC Choice Programs $28,734 $28,734 $28,734 $28,734 $28,734 1 11 OCWD Reimbursement (166,293) ($986,920) ($1,072,147) ($1,389,694) ($1,519,503) 2 12 Total $19,498,021 $20,537,840 $21,368,342 $26,699,882 $26,888,717 13 14 Projected Supply, Acre-Feet 19,773 19,773 19,773 19,773 19,773 15 16 Note:
17 (1) FY 23/24 OCWD, MWD, and MWDOC costs used in this table. Increases in subsequent years will be recovered from future pass-through adjustments. 18 (2) FY 23/24 from City staff, 6/13/23.
19 20
21 Key Assumptions
22 Projected Water Supply Groundwater Imported Total
23 Projected FY 23/24, unadjusted 16,807 2,966 19,773 Note 1 24 Conservation adjustment 0.00% 0.00% 0.00% N/A
25 Projected FY 23/24, adjusted 16,807 2,966 19,773 acre-feet 26 Compare with Calendar Year 2022 21,385 acre-feet
27 Compare with Actual FY 21/22 22,105 acre-feet
28 Compare with actual FY 20/21 23,164 acre-feet
29 Compare with actual FY 19/20 21,979 acre-feet
30 Compare with Projected in 2018 Rate Study 23,000 (3,227) -0.14030242 31 Notes:
32 (1) Projected total FY 23/24 total production = actual FY 22/23 production, adjusted for 85% BPP. See Table A2. 33 34 PFAS Treatment Facilities Startup Dates
35 Well 21 start up date: December 1, 2021
36 Well 30 start up date: July 26, 2022
37 Well 29 start up date: 4/15/23. No IX change out in first year of operation. 38 Lampson (Wells 23, 28, 31) start up date: 7/1/23. No IX change out in first year of operation. 39 Well 19 projected start up date: 2025 (1/1/25 for this analysis, per City well production projections received 5/30/23). No IX change out in first year of operation. 40 Start up dates for treatment facilities for proposed MCL: 2026 (1/1/26 for this analysis). No IX change out in first year of operation. 41 Source of start up dates: City staff 5/30/23, embedded in well production projections. 42 11132023 Garden Grove Water Rate Study Model
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 43 City's Pumping Costs and Other PFAS O&M Costs
44 Pumping costs, excluding PFAS: Unit cost, $/AF from FY 22/23 year to date through March 2023 45 Increased power cost for each well site when PFAS treatment is operational $15.00 Source: derived from efficiency test on Well 19 (source: City staff 5/12/22) 46 Ion Exchange Pre-Filters $225,000 per year, covers four initial PFAS facilities. FY 23/24 Dollars. 47 Ion Exchange resin changeouts and carbon change out costs, per City, 5/30/23. Based on annual resin and carbon changeouts. 48 Limited operating experience shows that ion exchange resin changeout may be less frequent than annually, and costs in this an alysis are overstated. 49 50 OCWD Replenishment Assessment (RA) Costs Note not Updated 2023 51 OLD Source of FY 22/23 RA: April 20, 2022 Orange County Water District Budget Overview (page 2), received 9/28/22 from City staff. 52 53 MWD Costs Note not updated 2023
54 Imported Water Charges per MWD's adopted rates and MWD's 10-Year Financial Forecast. 55 Source of FY 22/23 Readiness to Serve Charge: MWDOC Resolution 2126, Exhibit A. 56 Capacity Charge Source: FY 21/22 from City 5/24 (via MWDOC draft 4/6/21). 57 Connection Charge Source: MWDOC Invoice, dated 7/7/22, received from City staff on 10/17/22. The Connection Charge equals t he number of connections times 58 59
60 Detailed Cost Calculations FY 21/22 and FY 22/23
61 FY 21/22 Actual FY 22/23 Projected, Based on Actual AF Data 62 Actual Costs, FY 21/22 Jul-Dec 21 Jan-Jun 22 Entire FY Jul-Dec 22 Jan-Jun 23 Entire FY Notes 63 OCWD Replenishment Assessment
64 Unit Cost, $/AF $507.00 $558.00 1
65 Groundwater Production, AF 16,809 16,807
66 Total Replenishment Assessment $8,522,023 $9,378,355 67 68 MWD Tier 1 Treated Water Rate, $/AF
69 MWD Tier 1 Treated Water Rate, $/AF $1,104.00 $1,143.00 $1,143.00 $1,209.00 2 70 Imported Water, AF 1,943 3,354 3,629 8 3
71 Total Imported Water Cost $2,145, 080 $3,833,288 $5,978,368 $4,147,503 $9,703 $4,157,206 72 73 Other MWD Charges
74 MWD Readiness to Serve Charge $433,229 $499,167 4
75 MWD Capacity Charge $236,147 $202,765 5
76 MWD Connection Charge $443,118 $468,834 6, 7
77 Number of Connections 34,086 34,097 6, 7
78 Cost per Connection $13 $13.75 6, 7
79 80 MWDOC Choice Programs $16,041 $28,734 8
81 82 Pumping Costs, $/year $1,123,399 $1,168,261 9
83 Pumping Costs, $/AF $66.83 $69.51 9
84 Natural Gas Costs, $/year $174,368 $181,343 10
85 86 PFAS O&M Costs $111,166 11
87 11132023 Garden Grove Water Rate Study Model
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 88 Notes:
89 (1) FY 22/23 Source: April 20, 2022 Orange County Water District Budget Overview (page 2), received 9/28/22 from City staff. 90 (2) Imported Water Charges per MWD's adopted rates and MWD's 10-Year Financial Forecast. The MWD Ten-Year Financial Forecast is contained in the MWD 2022/23 and 2023/24 Biennial Budget, page 221. 91 (3) Placeholders. Groundwater production volumes from Jul-Dec and Jan-Jun to be reviewed and modified during Rate Study. 92 (4) FY 22/23 Source: MWDOC Resolution 2126, Exhibit A. 93 (5) FY 22/23 Source: CY 2023 cost per 4/20/22 MWDOC Ordinance 2126, Exhibit B. 94 (6) The Connection Charge equals the number of connections times the MWDOC Retail Meter Charge. FY 22/23 Source of Retail Met er Charge: MWDOC Invoice, dated 7/7/22, received from City staff on 10/17/22. 95 (7) Number of connections for FY 22/23 is from City staff, 10/17/22. 96 (8) MWD Choice Programs include Water Use Efficiency and School Education programs. FY 22/23 cost per MWDOC Resolution 2126, Exhibit C. 97 (9) FY 21/22 $/year per City's financial records. FY 21/22 $/AF calculated by dividing pumping costs by groundwater productio n. FY 22/23 $/AF calculated 98 by increasing FY 21/22 $/AF cost by inflation rate. FY 22/23 $/year calculated by multiplying FY 22/23 $/AF cost by projected groundwater production 99 (10) FY 21/22 $/year per City's financial records. FY 22/23 $/year = FY 21/22 $/year escalated for inflation 100 (11) FY 21/22 Source: City staff via email, 9/28/22. FY 22/23 calculation is shown below. 101
102
FY 22/23 YTD Electricity and Natural Gas Unit Costs
103 FY 22/23 YTD
104 YTD (Jul - Mar) Electricity Costs $738,972
105 YTD (Jul - Mar) Groundwater Production in AF 11,177 106 Electricity Unit Costs in Dollars/AF $66.12
107
108 YTD (Jul - Mar) Natural Gas Costs $192,389
109 YTD (Jul - Mar) Groundwater Production in AF 11,177 110 Natural Gas Unit Costs in Dollars/AF $17.21
111
112
113
FY 23/24 PFAS O&M Cost and Reimbursement Calculation
114
115 Well 21 Well 29 Well 30 Lampson Total Notes
116 Startup Date 12/1/2021 4/12/2023 7/26/2022 7/1/2023 117 Months Operating FY 23/24 12 12 12 12
118
119 Prefilters (Cartridges) $28,957 $33,311 $22,207 $72,393 $156,868 1 120 IX Change Out $742,600 $1,004,880 $529,300 $2,276,780 1 121 Labor 2
122 Power $49,097 $41,608 $33,286 $54,923 $178,914 3
123 Analytical (monthly sample) $1,200 $1,200 $1,200 $1,200 $4,800 1 124 Maintenance Cost
(x% of equipment Cost) $6,750 $13,500 $20,250 $6,750 $47,250 1 125 O&M Contingency (%of sub total) $39,628 $56,300 $67,245 $44,960 $208,133 1 126 Total $868,232 $1,150,799 $673,489 $180,226 $2,872,745 127
128 Production Volume, AF 3,273 2,774 2,219 3,662 11,928 4 129 O&M Cost, $/AF $240.85
130 50% of O&M Cost, $/AF $120.42
131 Maximum Unit Cost Eligible for Reimbursement, $/AF $82.74 5 132 Reimbursable Amount, $, Payable in FY 24/25 $986,920 11132023 Garden Grove Water Rate Study Model
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 133 FY 24/25 PFAS O&M Cost and Reimbursement Calculation 134
135 Well 21 Well 29 Well 30 Lampson Well 19 Total Notes 136 Startup Date 12/1/2021 4/12/2023 7/26/2022 7/1/2023 1/1/2025 137 Months Operating FY 24/25 12 12 12 12 6
138
139 Prefilters (Cartridges) $30,115 $34,643 $23,095 $75,289 $163,143 1 140 IX Change Out $772,304 $1,045,075 $550,472 $1,478,880 $3,846,731 1 141 Labor $177,600 2
142 Power $51,061 $43,272 $34,618 $57,119 $8,294 $194,365 3 143 Analytical (monthly sample) $1,248 $1,248 $1,248 $1,248 $624 $5,616 1 144 Maintenance Cost
(x% of equipment Cost) $7,020 $14,040 $21,060 $7,020 $3,510 $52,650 1 145 O&M Contingency (%of sub total) $41,213 $58,552 $69,935 $46,758 $20,606 $237,064 1 146 Total $525,550 $589,695 $344,560 $857,820 $342,153 $4,677,169 147
148 Production Volume, AF 3,273 2,774 2,219 3,662 532 12,459 4 149 O&M Cost, $/AF $375
150 50% of O&M Cost, $/AF $188
151 Maximum Unit Cost Eligible for Reimbursement, $/AF $86.05 5 152 Reimbursable Amount, $, Payable in FY 25/26 $1,072,147 153
154
155
FY 25/26 PFAS O&M Cost and Reimbursement Calculation
156
157 Well 21 Well 29 Well 30 Lampson Well 19 Well 22 Well 26 Well 27 Well 20 Well 25 Total Notes 158 Startup Date 12/1/2021 4/12/2023 7/26/2022 7/1/2023 1/1/2025 1/1/2026 1/1/2026 1/1/2026 1/1/2026 1/1/2026 159 Months Operating FY 25/26 12 12 12 12 1 2 66666
160
161 Prefilters (Cartridges) $30,868 $35,509 $23,673 $77,171 $20,315 $187,536 1 162 IX Change Out $791,612 $1,071,202 $564,234 $1,515,852 $450,545 $4,393,444 1 163 Labor $171,995 2
164 Power $52,338 $44,354 $35,483 $58,547 $17,742 $9,758 $8,871 $9,758 $10,645 $4,435 $251,931 3 165 Analytical (monthly sample) $1,279 $1,279 $1,279 $1,279 $1,279 $640 $640 $640 $640 $640 $9,594 1 166 Maintenance Cost
(x% of equipment Cost) $7,196 $14,391 $21,587 $7,196 $7,196 $10,793 $10,793 $7,196 $14,391 $3,598 $104,335 1 167 O&M Contingency (%of sub total) $42,243 $60, 016 $71,683 $47,927 $42,243 $35,842 $35,842 $30,008 $48,833 $21,121 $435,758 1 168 Total $925,535 $1,226,752 $717,939 $1,707,972 $539, 319 $57,032 $56,145 $47,601 $74,509 $29,794 $5,554,594 169
170 Production Volume, AF 3,273 2,774 2,219 3,662 1,110 610 555 610 666 277 15,756 4 171 O&M Cost, $/AF $353
172 50% of O&M Cost, $/AF $176
173 Maximum Unit Cost Eligible for Reimbursement, $/AF $88.20 5 174 Reimbursable Amount, $, Payable in FY 26/27 $1,389,694 175
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 176 FY 26/27 PFAS O&M Cost and Reimbursement Calculation 177
178 Well 21 Well 29 Well 30 Lampson Well 19 Well 22 Well 26 Well 27 Well 20 Well 25 Total Notes 179 Startup Date 12/1/2021 4/12/2023 7/26/2022 7/1/2023 1/1/2025 1/1/2026 1/1/2026 1/1/2026 1/1/2026 1/1/2026 180 Months Operating FY 26/27 12 12 12 12 12 12 12 12 12 12 181
182 Prefilters (Cartridges) $31,640 $36,397 $24,265 $79,100 $20,823 $36,397 $36,397 $31,640 $79,100 $20,823 $396,582 1 183 IX Change Out $811,402 $1,097,982 $578,340 $1,553,748 $461,809 $1,097,982 $1,097,982 $811,402 $1,553,748 $461,809 $9,526,203 1 1 8 4 L a b o r $ 0$ 0$ 0$ 0 $176,295 2
185 Power $48,146 $41,827 $30,915 $50,919 $14,548 $20,004 $18,185 $20,004 $21,823 $9,093 $275,464 3 186 Analytical (monthly sample) $1,311 $1,311 $1,311 $1,311 $1,311 $1,311 $1,311 $1,311 $1,311 $1,311 $13,112 1 187 Maintenance Cost
(x% of equipment Cost) $7,375 $14,751 $22,126 $7,375 $7,375 $22,126 $22,126 $14,751 $29,502 $7,375 $154,883 1 188 O&M Contingency (%of sub total) $43,299 $61, 516 $73,475 $49,126 $43,299 $73,475 $73,475 $61,516 $100,109 $43,299 $622,589 1 189 Total $943,173 $1,253,784 $730,432 $1,741,580 $549,165 $1,251,296 $1,249,477 $940,624 $1,785,592 $543,710 $11,165,129 190
191 Production Volume, AF 2,938 2,552 1,886 3,107 888 1,221 1,110 1,221 1,331 555 16,807 4 192 O&M Cost, $/AF $664
193 50% of O&M Cost, $/AF $332
194 Maximum Unit Cost Eligible for Reimbursement, $/AF $90.41 5 195 Reimbursable Amount, $, Payable in FY 27/28 $1,519,503 196
197
198
FY 27/28 PFAS O&M Cost and Reimbursement Calculation
199
200 Well 21 Well 29 Well 30 Lampson Well 19 Well 22 Well 26 Well 27 Well 20 Well 25 Total Notes 201 Startup Date 12/1/2021 4/12/2023 7/26/2022 7/1/2023 1/1/2025 1/1/2026 1/1/2026 1/1/2026 1/1/2026 1/1/2026 202 Months Operating FY 27/28 12 12 12 12 12 12 12 12 12 12 203
204 Prefilters (Cartridges) $32,431 $37,307 $24,871 $81,078 $21,343 $37,307 $37,307 $32,431 $81,078 $21,343 $406,497 1 205 IX Change Out $831,687 $1,125,432 $592,798 $1,592,592 $473,354 $1,125,432 $1,125,432 $831,687 $1,592,592 $473,354 $9,764,359 1 206 Labor $180,702 2
207 Power $49,350 $42,872 $31,688 $52,192 $14,912 $20,504 $18,640 $20,504 $22,368 $9,320 $282,351 3 208 Analytical (monthly sample) $1,344 $1,344 $1,344 $1,344 $1,344 $1,344 $1,344 $1,344 $1,344 $1,344 $13,440 1 209 Maintenance Cost
(x% of equipment Cost) $7,560 $15,120 $22,679 $7,560 $7,560 $22,679 $22,679 $15,120 $30,239 $7,560 $158,755 1 210 O&M Contingency (%of sub total) $44,381 $63, 054 $75,312 $50,354 $44,381 $75,312 $75,312 $63,054 $102,611 $44,381 $638,154 1 211 Total $966,753 $1,285,128 $748,693 $1,785,119 $562,894 $1,282,578 $1,280,714 $964,140 $1,830,232 $557,302 $11,444,257 212
213 Production Volume, AF 2,938 2,552 1,886 3,107 888 1,221 1,110 1,221 1,331 555 16,807 4 214 O&M Cost, $/AF $681
215 50% of O&M Cost, $/AF $340
216 Maximum Unit Cost Eligible for Reimbursement, $/AF $92.67 5 217 Reimbursable Amount, $, Payable in FY 28/29 $1,557,491 218
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FINAL
Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 219 Notes:
220 (1) Source: FY 22/23 per City staff, 5/30/2023, with follow-up clarification of carbon changeout, ion exchange resin changeout, and pre-filter replacement scheduling provided on 6/13/23. 221 Subsequent years: costs increased for inflation.
222 (2) Labor costs for FTEs existing as of 6/1/23 are embedded in City's budget. Value shown in this row is:
223 Sr. Production Operator hired 1/1/25, with ongoing costs starting FY 24/25 and one-time costs in FY 24/25 (source: City staf f, 6/13/23 and 6/15/23) 224 (3) Based on unit cost of $15/acre-foot (in FY 23/24 dollars) of water from PFAS treatment fac ilities. 225 (4) See Table A-2 for more detail.
226 (5) Based on maximum reimbursable cost of $79.52 per acre-foot in FY 22/23 dollars. 227
228
229
Detailed Cost Calculations FY 23/24 through FY 27/28
230
231 FY 23/24 FY 24/25
232 Projected Water Production, acre-feet Jul-Dec 23 Jan-Jun 24 Total Jul-Dec 24 Jan-Jun 25 Total Notes 233 % of Water Production
234 Local Groundwater
235 Non-PFAS Wells 24.62% 32.96% 24.62% 26.98% 1
236 PFAS Wells 75.38% 67.04% 75.38% 73.02% 1
237 Subtotal, Local Groundwater 73% 100% 70% 104% 1
238
239 Purchased 27% 0% 27% 0% 1
240 Total 100% 100% 97% 104%
241
242 Water Production, acre-feet
243 Local Groundwater
244 Non-PFAS wells 1,948 2,931 4,879 1,948 2,400 4,348 1 245 PFAS Wells 5,964 5,964 11,928 5,964 6,495 12,459 1
246 Subtotal, Local Groundwater 7,912 8,895 16,807 7,912 8,895 16,807 247
248 Imported Water 2,966 0 2,966 2,966 0 2,966 1
249
250 Total Water Production 10,878 8,895 19,773 10,878 8,895 19,773 1 251
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 252 FY 23/24 FY 24/25
253 Unit Costs Jul-Dec 23 Jan-Jun 24 Entire FY Jul-Dec 24 Jan-Jun 25 Entire FY 254 Pumping Costs, (electricity) $/AF $/acre-foot $66.12 $66.12 $68.76 $68.76 2 255 Natural Gas Costs, $/AF $/acre-foot $17.21 $17.21 $17.90 $17.90 2 256 OCWD Replenishment Assessment, $/AF $/acre-foot $624.00 $624.00 3 257 MWD Tier 1 Treated Water Rate, $/AF $/acre-foot $1,209 $1,256 $1,209 $1,256 4 258 MWD Readiness to Serve Charge $/year $264,139 $277,346 $264,139 $277,346 4 259 MWD Capacity Charge $/year $101,383 $106,452 $101,383 $106,452 4 260 MWD Connection Charge $/connection $14.44 $14.44 4
261
262 FY 23/24 FY 24/25
263 Projected Water Costs Jul-Dec 23 Jan-Jun 24 Total Jul-Dec 24 Jan-Jun 25 Total 264 PFAS O&M, Current MCL $2,872,745 $4,677,169
265 Pumping Costs $523,113 $588,143 $1,111,256 $544,038 $611,669 $1,155,706 266 Natural Gas $136,190 $153,121 $289,311 $141,638 $159,246 $300,884 267 WOCWB Shared Water Transmission Lines $47,208 $47,208 268 OCWD Replenishment Assessment $10,487,623 $10,487,623 269 MWD Tier 1 Treated Water Rate $3,585,842 $0 $3,585,842 $3,585,842 $0 $3,585,842 270 MWD Readiness to Serve Charge $264,139 $277,346 $541,486 $264,139 $277,346 $541,486 271 MWD Capacity Charge $101,383 $106,452 $207,834 $101,383 $106,452 $207,834 272 MWD Connection Charge $492,275 $492,275 5
273 MWDOC Choice Programs $28,734 $28,734 4
274 OCWD Reimbursed PFAS Cost Share (Costs Incurred Previous Year) ($166,293) ($986,920) 2 275 Total Projected Water Costs $19,498,021 $20,537,840 276
277
278 FY 25/26 FY 26/27 FY 27/28
279 Projected Water Production, acre-feet Jul-Dec 25 Jan-Jun 26 Total Jul-Dec 26 Jan-Jun 27 Total Jul-Dec 27 Jan-Jun 28 Total Notes 280 % of Water Production
281 Local Groundwater
282 Non-PFAS Wells 13.89% 0.00% 0.00% 0.00% 0.00% 0.00% 1 283 PFAS Wells 86.11% 100.00% 100.00% 100.00% 100.00% 100.00% 1 284 Subtotal, Local Groundwater 70% 104% 77% 94% 77% 94% 1 285
286 Purchased 27% 0% 27% 0% 27% 0% 1
287 Total 97% 104% 105% 94% 105% 94%
288
289 Water Production, acre-feet
290 Local Groundwater
291 Non-PFAS wells 1,052 0 1,052 0 0 0 0 0 0 1
292 PFAS Wells 6,519 9,237 15,756 8,405 8,402 16,807 8,405 8,402 16,807 1 293 Subtotal, Local Groundwater 7,570 9,237 16,807 8,405 8,402 16,807 8,405 8,402 16,807 294
295 Imported Water 2,966 0 2,966 2,966 0 2,966 2,966 0 2,966 1 296
297 Total Water Production 10,878 8,895 19,773 10,878 8,895 19,773 10,878 8,895 19,773 1 298
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Projected Water Costs
Table A-4
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Water Costs Using FY 23/24 OCWD and MWD Costs 299 FY 25/26 FY 26/27 FY 27/28
300 Unit Costs Jul-Dec 25 Jan-Jun 26 Entire FY Jul-Dec 26 Jan-Jun 27 Entire FY Jul-Dec 27 Jan-Jun 28 Total 301 Pumping Costs, (electricity) $/AF $/acre-foot $70.48 $70.48 $72.24 $72.24 $74.05 $74.05 2 302 Natural Gas Costs, $/AF $/acre-foot $18.35 $18.35 $18.81 $18.81 $19.28 $19.28 2 303 OCWD Replenishment Assessment, $/AF $/acre-foot $624.00 $624.00 $624.00 3 304 MWD Tier 1 Treated Water Rate, $/AF $/acre-foot $1,209 $1,256 $1,209 $1,256 $1,209 $1,256 4 305 MWD Readiness to Serve Charge $/year $264,139 $277,346 $264,139 $277,346 $264,139 $277,346 4 306 MWD Capacity Charge $/year $101,383 $106,452 $101,383 $106,452 $101,383 $106,452 4 307 MWD Connection Charge $/connection $14.44 $14.44 $14.44 4 308
309 FY 25/26 FY 26/27 FY 27/28
310 Projected Water Costs Jul-Dec 25 Jan-Jun 26 Total Jul-Dec 26 Jan-Jun 27 Total Jul-Dec 27 Jan-Jun 28 Total 311 PFAS O&M, Current MCL $5,554,594 $11,165,129 $11,444,257 312 Pumping Costs $533,558 $651,042 $1,184,599 $607,207 $607,007 $1,214,214 $622,387 $622,182 $1,244,569 313 Natural Gas $138,910 $169,496 $308,406 $158,084 $158,032 $316,116 $162,036 $161,983 $324,019 314 WOCWB Shared Water Transmission Lines $49,096 $50,324 $51,582 315 OCWD Replenishment Assessment $10,487,623 $10,487,623 $10,487,623 316 MWD Tier 1 Treated Water Rate $3,585,842 $0 $3,585,842 $3,585,842 $0 $3,585,842 $3,585,842 $0 $3,585,842 317 MWD Readiness to Serve Charge $264,139 $277,346 $541,486 $264,139 $277,346 $541,486 $264,139 $277,346 $541,486 318 MWD Capacity Charge $101,383 $106,452 $207,834 $101,383 $106,452 $207,834 $101,383 $106,452 $207,834 319 MWD Connection Charge $492,275 $492,275 $492,275 5
320 MWDOC Choice Programs $28,734 $28,734 $28,734 4
321 OCWD Reimbursed PFAS Cost Share (Costs Incurred Previous Year) ($1,072,147) ($1,389,694) ($1,519,503) 2 322 Total Projected Water Costs $21,368,342 $26,699,882 $26,888,717 Notes:
(1) See Table A-2 for more detail.
(2) See above for electricity and natural gas unit cost calculation based on actual energy costs from July 2022 through March 2023. (3) Per OCWD staff via email from City staff, 3/31/23.
(4) Source: MWD Ten-Year Financial Forecast, contained in the MWD 2022/23 and 2023/24 Biennial Budget, page 221; also MWD presentation from April 22, slide 4. 7% increase in 2025, 6% increase in 2026, 6% increase in 2027 and 2028. (5) City's most recent data reported to MWD for MWD Connection Charge calculations uses 34,097 connections. This value is assumed constant through FY 27/28 11132023 Garden Grove Water Rate Study Model
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Projected Water Costs
Table A-5
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Increases in Water Costs to be Recovered from Future Pass-Through Adjustments Summary of Projected Annual Costs
Estimated Estimated Estimated Estimated Estimated
Component of Water Costs FY 20/21 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 Using FY 23/24 Costs
2 OCWD Replenishment Assessment $10,487,623 $10,487,623 $10,487,623 $10,487,623 $10,487,623 3 MWD Tier 1 Treated Water Rate $3,585,842 $3,585,842 $3,585,842 $3,585,842 $3,585,842 4 MWD Readiness to Serve Charge $541,486 $541,486 $541,486 $541,486 $541,486 5 MWD Capacity Charge $207,834 $207,834 $207,834 $207,834 $207,834 6 MWD Connection Charge $492,275 $492,275 $492,275 $492,275 $492,275 7 MWDOC Choice Programs $28,734 $28,734 $28,734 $28,734 $28,734 8 Total $15,343,794 $15,343,794 $15,343,794 $15,343,794 $15,343,794 9 10 Using Projected Future Costs
11 OCWD Replenishment Assessment $10,487,623 $11,176,713 $11,748,154 $12,319,595 $12,924,650 12 MWD Tier 1 Treated Water Rate $3,585,842 $3,725,242 $4,009,973 $4,282,841 $4,549,778 13 MWD Readiness to Serve Charge $541,486 $574,107 $611,327 $648,007 $686,887 14 MWD Capacity Charge $207,834 $220,355 $234,641 $248,719 $263,642 15 MWD Connection Charge $492,275 $526,735 $558,339 $591,839 $627,349 16 MWDOC Choice Programs $28,734 $29,883 $30,630 $31,396 $32,181 17 Total $15,343,794 $16,253,035 $17,193,065 $18,122,398 $19,084,488 18 19 Costs Recovered from Future Pass-Through Adjustments 20 OCWD Replenishment Assessment $0 $689,091 $1,260,532 $1,831,973 $2,437,028 21 MWD Tier 1 Treated Water Rate $0 $139,400 $424,132 $697,000 $963,936 22 MWD Readiness to Serve Charge $0 $32,621 $69,841 $106,521 $145,401 23 MWD Capacity Charge $0 $12,521 $26,807 $40,885 $55,808 24 MWD Connection Charge $0 $34,459 $66,063 $99,564 $135,074 25 MWDOC Choice Programs $0 $1,149 $1,896 $2,662 $3,447 26 Total $0 $909,241 $1,849,271 $2,778,604 $3,740,694
27 28 Projected Pass-Thru Adjustment, $/cc
f
29 Projected Metered Sales, ccf/year 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 30 31 Projected Pass-Thru Adjustment FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 32 Increase in Each FY, $/ccf $0.11 $0.12 $0.12 $0.12
33 Cumulative Pass-Thru, $/ccf $0.00 $0.11 $0.23 $0.35 $0.47 34 35
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Projected Water Costs
Table A-5
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Increases in Water Costs to be Recovered from Future Pass-Through Adjustments 36 Detailed Cost Calculations FY 23/24 through FY 27/28 37 FY 23/24 FY 24/25
38 Projected Water Production, acre-feet Jul-Dec 23 Jan-Jun 24 Total Jul-Dec 24 Jan-Jun 25 Total Notes 39 % of Water Production
40 Local Groundwater
41 Non-PFAS Wells 24.62% 32.96% 24.62% 26.98% 1
42 PFAS Wells 75.38% 67.04% 75.38% 73.02% 1
43 Subtotal, Local Groundwater 73% 100% 70% 104% 1
44 45 Purchased 27% 0% 27% 0% 1
46 Total 100% 100% 97% 104%
47 48 Water Production, acre-feet
49 Local Groundwater
50 Non-PFAS wells 1,948 2,931 4,879 1,948 2,400 4,348 1 51 PFAS Wells 5,964 5,964 11,928 5,964 6,495 12,459 1
52 Subtotal, Local Groundwater 7,912 8,895 16,807 7,912 8,895 16,807 53 54 Imported Water 2,966 0 2,966 2,966 0 2,966 1
55 56 Total Water Production 10,878 8,895 19,773 10,878 8,895 19,773 1 57 58 FY 23/24 FY 24/25
59 Unit Costs Jul-Dec 23 Jan-Jun 24 Entire FY Jul-Dec 24 Jan-Jun 25 Entire FY 60 OCWD Replenishment Assessment, $/AF $/acre-foot $624.00 $665.00 2 61 MWD Tier 1 Treated Water Rate, $/AF $/acre-foot $1,209 $1,256 $1,256 $1,352 3 62 MWD Readiness to Serve Charge $/year $264,139 $277,346 $277,346 $296,761 3 63 MWD Capacity Charge $/year $101,383 $106,452 $106,452 $113,903 3 64 MWD Connection Charge $/connection $14.44 $15.45 3
65 66 FY 23/24 FY 24/25
67 Projected Water Costs Jul-Dec 23 Jan-Jun 24 Total Jul-Dec 24 Jan-Jun 25 Total 68 OCWD Replenishment Assessment $10,487,623 $11,176,713 69 MWD Tier 1 Treated Water Rate $3,585,842 $0 $3,585,842 $3,725,242 $0 $3,725,242 70 MWD Readiness to Serve Charge $264,139 $277,346 $541,486 $277,346 $296,761 $574,107 71 MWD Capacity Charge $101,383 $106,452 $207,834 $106,452 $113,903 $220,355 72 MWD Connection Charge $492,275 $526,735 4
73 MWDOC Choice Programs $28,734 $29,883 3
74 Total Projected Water Costs $15,343,794 $16,253,035
75 11132023 Garden Grove Water Rate Study Model
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Projected Water Costs
Table A-5
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Increases in Water Costs to be Recovered from Future Pass-Through Adjustments 76 FY 25/26 FY 26/27 FY 27/28
77 Projected Water Production, acre-feet Jul-Dec 25 Jan-Jun 26 Total Jul-Dec 26 Jan-Jun 27 Total Jul-Dec 27 Jan-Jun 28 Total Notes 78 % of Water Production
79 Local Groundwater
80 Non-PFAS Wells 13.89% 0.00% 0.00% 0.00% 0.00% 0.00% 1 81 PFAS Wells 86.11% 100.00% 100.00% 100.00% 100.00% 100.00% 1 82 Subtotal, Local Groundwater 70% 104% 77% 94% 77% 94% 1 83 84 Purchased 27% 0% 27% 0% 27% 0% 1
85 Total 97% 104% 105% 94% 105% 94%
86 87 Water Production, acre-feet
88 Local Groundwater
8 9 N o n - P F A S w e l l s 1 , 0 5 20 1 , 0 5 2000000 1 90 PFAS Wells 6,519 9,237 15,756 8,405 8,402 16,807 8,405 8,402 16,807 1 91 Subtotal, Local Groundwater 7,570 9,237 16,807 8,405 8,402 16,807 8,405 8,402 16,807 92 93 Imported Water 2,966 0 2,966 2,966 0 2,966 2,966 0 2,966 1 94 95 Total Water Production 10,878 8,895 19,773 10,878 8,895 19,773 10,878 8,895 19,773 1 96 11132023 Garden Grove Water Rate Study Model
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Projected Water Costs
Table A-5
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected Increases in Water Costs to be Recovered from Future Pass-Through Adjustments 97 FY 25/26 FY 26/27 FY 27/28
98 Unit Costs Jul-Dec 25 Jan-Jun 26 Entire FY Jul-Dec 26 Jan-Jun 27 Entire FY Jul-Dec 27 Jan-Jun 28 Total 99 OCWD Replenishment Assessment, $/AF $/acre-foot $699.00 $733.00 $769.00 2 100 MWD Tier 1 Treated Water Rate, $/AF $/acre-foot $1,352 $1,444 $1,444 $1,534 $1,534 $1,626 3 101 MWD Readiness to Serve Charge $/year $296,761 $314,566 $314,566 $333,440 $333,440 $353,447 3 102 MWD Capacity Charge $/year $113,903 $120,737 $120,737 $127,982 $127,982 $135,661 3 103 MWD Connection Charge $/connection $16.38 $17.36 $18.40 3 104
105 FY 25/26 FY 26/27 FY 27/28
106 Projected Water Costs Jul-Dec 25 Jan-Jun 26 Total Jul -Dec 26 Jan-Jun 27 Total Jul-Dec 27 Jan-Jun 28 Total 107 OCWD Replenishment Assessment $11,748,154 $12,319,595 $12,924,650 108 MWD Tier 1 Treated Water Rate $4,009,973 $0 $4,009,973 $4,282,841 $0 $4,282,841 $4,549,778 $0 $4,549,778 109 MWD Readiness to Serve Charge $296,761 $314,566 $611,327 $314,566 $333,440 $648,007 $333,440 $353,447 $686,887 110 MWD Capacity Charge $113,903 $120,737 $234,641 $120,737 $127,982 $248,719 $127,982 $135,661 $263,642 111 MWD Connection Charge $558,339 $591,839 $627,349 4
112 MWDOC Choice Programs $30,630 $31,396 $32,181 3
113 Total Projected Water Costs $17,193,065 $18,122,398 $19,084,488 Notes:
(1) See Table A-2 for more detail.
(2) Per OCWD staff via email from City staff, 3/31/23.
(3) Source: MWD Ten-Year Financial Forecast, contained in the MWD 2022/23 and 2023/24 Biennial Budget, page 221; also MWD presentation from April 22, slide 4. 7% increase in 2025, 6% increase in 2026, 6% increase in 2027 and 2028. (4) City's most recent data reported to MWD for MWD Connection Charge calculations uses 34,097 connections. This value is assumed constant through FY 27/28 11132023 Garden Grove Water Rate Study Model
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Operations and Maintenance
Table A-6
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected O&M Expenditures, Excluding Water Production Costs and Water Use Objectives Compliance Costs Line Budget (1) Budget (1) Projected (2)
No. Fund GL Key Description GL KEY Account-Description FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 601 WATER OPS-WATER ADMIN 6016101000 50001 - Salaries 157,815 165, 705 172,333 176,642 181,058 2 601 WATER OPS-ENG 6016101565 50001 - Sala ries 429,558 451,036 469,077 480,804 492,824 3 601 WATER OPS-WATER PROD 6016101570 50001 - Salari es 1,123,223 1,179,384 1, 226,559 1,257,223 1,288,654 4 601 WATER OPS-WATER DIST 6016101575 50001 - Sa laries 832,005 873,605 908,549 931,263 954,545 5 601 WATER OPS-WATER QUAL 6016101580 50001 - Sa laries 416,421 437,242 454,732 466,100 477,752 6 601 WATER OPS-WATER DIST 601101100 50001 - Sa laries 11,555 12,132 12,617 12,933 13,256 7 601 WATER OPS-WATER DIST 601102100 50001 - Sa laries 58,040 60,942 63,380 64,964 66,588 8 601 WATER OPS-WATER DIST 601135112 50001 - Sa laries 181,056 190,109 197,713 202,656 207,723 9 601 WATER OPS-WATER DIST 601212119 50001 - Sa laries 18,152 19,059 19,821 20,317 20,825 10 601 WATER OPS-WATER DIST 601212120 50001 - Sa laries 4,302 4,517 4,698 4,815 4,936 11 601 WATER OPS-WATER DIST 601215100 50001 - Sa laries 21,849 22,941 23,859 24,455 25,067 12 601 WATER OPS-WATER DIST 601131100 50001 - Sa laries 32,798 34,438 35,816 36,711 37,629 13 601 WATER OPS-WATER DIST 601510100 50001 - Sa laries 168,971 177,419 184,516 189,129 193,857 14 601 WATER OPS-WATER DIST 601132100 50001 - Sa laries 123,082 129,236 134,405 137,766 141,210 15 601 WATER OPS-WATER DIST 601135100 50001 - Sa laries 26,548 27,876 28,991 29,716 30,459 16 601 WATER OPS-WATER DIST 601102103 50001 - Sa laries 56,179 58,988 61,348 62,881 64,453 17 601 WATER OPS-WATER DIST 601133100 50001 - Sa laries 44,453 46,676 48,543 49,757 51,001 18 601 WATER OPS-WATER DIST 601522144 50001 - Sa laries 66,271 69,585 72,368 74,178 76,032 19 601 WATER OPS-WATER DIST 601532149 50001 - Sa laries 95,686 100,470 104,489 107,101 109,779 20 601 WATER OPS-WATER DIST 601544153 50001 - Sa laries 145,395 152,665 158,772 162,741 166,809 21 601 WATER OPS-WATER DIST 601546100 50001 - Sa laries 38,605 40,535 42,156 43,210 44,291 22 601 WATER OPS-WATER DIST 601546156 50001 - Sa laries 20,365 21,384 22,239 22,795 23,365 23 601 WATER OPS-WATER ADMIN 6016101000 50007 - Frin ge Costs 93,858 98, 551 102,493 105,055 107,682 24 601 WATER OPS-ENG 6016101565 50007 - Fringe Costs 351,164 368,722 383,471 393,058 402,884 25 601 WATER OPS-WATER PROD 6016101570 50007 - Fringe Co sts 1,080,339 1,134,355 1, 179,729 1,209,222 1,239,453 26 601 WATER OPS-WATER DIST 6016101575 50007 - Fringe Costs 908,603 954,033 992,194 1,016,999 1,042,424 27 601 WATER OPS-WATER QUAL 6016101580 50007 - Frin ge Costs 343,172 343, 172 356,899 365,821 374,967 28 601 WATER OPS-WATER DIST 601101100 50007 - Frin ge Costs 7,336 7, 703 8,011 8,211 8,417 29 601 WATER OPS-WATER DIST 601102100 50007 - Frin ge Costs 47,938 50, 334 52,347 53,656 54,997 30 601 WATER OPS-WATER DIST 601135112 50007 - Frin ge Costs 151,223 158, 784 165,135 169,264 173,495 31 601 WATER OPS-WATER DIST 601212119 50007 - Frin ge Costs 13,574 14, 252 14,822 15,193 15,572 32 601 WATER OPS-WATER DIST 601212120 50007 - Frin ge Costs 3,278 3, 442 3,580 3,669 3,761 33 601 WATER OPS-WATER DIST 601215100 50007 - Frin ge Costs 19,838 20, 829 21,663 22,204 22,759 34 601 WATER OPS-WATER DIST 601131100 50007 - Frin ge Costs 19,652 20, 634 21,459 21,996 22,546 35 601 WATER OPS-WATER DIST 601510100 50007 - Frin ge Costs 153,623 161, 305 167,757 171,951 176,250 36 601 WATER OPS-WATER DIST 601132100 50007 - Frin ge Costs 95,805 100, 595 104,619 107,234 109,915 11132023 Garden Grove Water Rate Study Model
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Operations and Maintenance
Table A-6
City of Garden Grove Water Services Department
2023 Water Rate Study

Projected O&M Expenditures, Excluding Water Production Costs and Water Use Objectives Compliance Costs Line Budget (1) Budget (1) Projected (2)
No. Fund GL Key Description GL KEY Account-Description FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 37 601 WATER OPS-WATER DIST 601135100 50007 - Frin ge Costs 22,463 23, 586 24,529 25,143 25,771 38 601 WATER OPS-WATER DIST 601102103 50007 - Frin ge Costs 51,636 54, 218 56,387 57,796 59,241 39 601 WATER OPS-WATER DIST 601133100 50007 - Frin ge Costs 37,038 38, 890 40,446 41,457 42,493 40 601 WATER OPS-WATER DIST 601522144 50007 - Frin ge Costs 51,129 53, 685 55,832 57,228 58,659 41 601 WATER OPS-WATER DIST 601532149 50007 - Frin ge Costs 94,754 99, 492 103,472 106,058 108,710 42 601 WATER OPS-WATER DIST 601544153 50007 - Frin ge Costs 136,189 142, 999 148,719 152,437 156,248 43 601 WATER OPS-WATER DIST 601546100 50007 - Frin ge Costs 32,340 33, 957 35,315 36,198 37,103 44 601 WATER OPS-WATER DIST 601546156 50007 - Frin ge Costs 16,582 17, 411 18,107 18,560 19,024 45 601 WATER OPS-WATER ADMIN 6016101000 51001 - CONT RACTUAL SERV 66,789 66,789 69,461 71,197 72,977 46 601 WATER OPS-CAPITAL 6016101280 51001 - CONTRA CTUAL SERV 136,425 43,378 45,113 46,241 47,397 47 601 WATER OPS-ENG 6016101565 51001 - CONTRACT UAL SERV 43,379 43,379 45,114 46,242 47,398 48 601 WATER OPS-WATER PROD 6016101570 51001 - CONTRA CTUAL SERV 129,530 129,530 134,711 138,079 141,531 49 601 WATER OPS-WATER DIST 6016101575 51001 - CONTRA CTUAL SERV 129,529 129,529 134,710 138,078 141,530 50 601 WATER OPS-WATER QUAL 6016101580 51001 - CONTRA CTUAL SERV 64,879 62,879 65,394 67,029 68,705 51 601 WATER OPS-WATER ADMIN 6016101000 51401 - REGISTRATION FEES 500 500 520 533 546 52 601 WATER OPS-WATER ADMIN 6016101000 51402 - TUIT ION/TRAINING 10,998 10,998 11,438 11,724 12,017 53 601 WATER OPS-WATER ADMIN 6016101000 51404 - CITY MEMBERSHIPS 12,835 12,835 13,348 13,682 14,024 54 601 WATER OPS-WATER ADMIN 6016101000 52001 - CO MMODITIES 50,894 50,894 52,930 54,253 55,609 55 601 WATER OPS-ENG 6016101565 52001 - COMMOD ITIES 77,588 77,588 80,692 82,709 84,777 56 601 WATER OPS-WATER PROD 6016101570 52001 - COMMODITIES 2,00 00000 57 601 WATER OPS-WATER DIST 6016101575 52001 - COMM ODITIES 279,557 271,557 282,419 289,480 296,717 58 601 WATER OPS-WATER QUAL 6016101580 52001 - COMM ODITIES 157,176 155,176 161,383 165,418 169,553 59 601 WATER OPS-WATER ADMIN 6016101000 52106 - BOOKS/SUBSCRIPTIONS 713 713 742 760 779 60 601 WATER OPS-ENG 6016101565 52106 - BOOKS/SUBSCRIPTIONS 237 237 246 253 259 61 601 WATER OPS-WATER ADMIN 6016101000 53355 - OVERHEAD FEE 1,402,200 1,444,200 1,501,968 1,539, 517 1,578,005 62 601 WATER OPS-WATER ADMIN 6016101000 53358 - CITY ST REET DAMAGES 814,455 814,455 847,033 868,209 889,914 Total (3) 11,183,545 11,491,530 11,951, 192 12,249,971 12,556,221

Notes:
(1) Received from City staff, 4/19/23
(2) Adjusted for inflation at 2.5% per year.
(3) Matches Operating Statement (Table A10) lines 38, 39, 40, 43, 44, and 45. 11132023 Garden Grove Water Rate Study Model
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Debt Service
Table A-7
City of Garden Grove Water Services Department
2023 Water Rate Study
Existing and Future Debt Service

Existing Revenue Bond Debt Service (1) (2) FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 Revenue and Refunding Bonds 2015 1,013,450 939,300 0000 2 Water Revenue Bonds Series 2020A 1,266,975 1,720,175 1,714,575 1,717,775 1,719,375 1,719,375 3 Total $2,280,425 $2,659,475 $1,714,575 $1,717,775 $1,719,375 1,719,375 4 5 Issue Issuance Interest Estimated Principal and Interest Payment 6 Proposed Debt Service Date Amount Rate FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 7 Revenue Bond/Private Placement 23/24 $0 5.0% 00000
8 Revenue Bond/Private Placement 24/25 $0 5.0% 0000
9 Revenue Bond/Private Placement 25/26 $0 5.0% 0 0 0
10 Revenue Bond/Private Placement 26/27 $0 5.0% 00
11 Revenue Bond/Private Placement 27/28 $0 5.0% 0
12 Total $0 $0 $0 $0 $0 $0
13 14 Intercity Loan Debt Service (2) FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 15 Outstanding Principal Beginning Year $10,632,394 $9,851,256 $9,037,481 $8,189,708 $7,306,516 $6,386,425 16 Principal Payment $781,139 $813,774 $847,773 $883,192 $920,091 $958,532 17 Interest Payment $421,358 $388,722 $354,723 $319,304 $282,405 $243,964 18 Outstanding Principal, End of Year $9,851,256 $9,037,481 $8,189,708 $7,306,516 $6,386,425 $5,427,892 Notes:
(1) Source: City Finance Department Staff, April 2023.
(2) Source: City Finance Department email, 5/16/21
(3) Source: Data from staff email 3/28/23.

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Operating Statement
Table A-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Utility Operating Statement
Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Notes
1 FUND 601 (WATER OPERATIONS) SOURCES OF FUNDS
2 Beginning of Year Balance, Fund 601 $30,046,648 $23,183,148 $18,846, 897 $17,795,639 $14,886,313 1 3 4 Rate Revenues Under Adopted Rates (Ordinance 2890)
5 Water Sales Revenues (Excludes Future Rate Incr eases and Future Pass Through Charge Adjustments) 6 Bi-Monthly Minimum Charge $8, 344,136 $8,344,136 $8,344,136 $8,344,136 $8,344,136 2 7 Commodity Delivery Charge 26,175, 282 26,175,282 26,175,282 26,175,282 26,175,282 2 8 Pass Through Charge (Existing Rate s) 3,204,396 3,204,396 3,204, 396 3,204,396 3,204,396 2 9 Private Fire Service 494,910 494,910 494,910 494,910 494,910 2 10 Senior Care Discount (16, 342) (16,342) (16,342) (16,342) (16,342) 3 1 1 W a t e r L o w U s e C r e d i t 00000 3
12 Write-offs (55,214) (58,748) (62,508) (66,509) (68,171) 3 13 14 Additional Revenues From Ra te Increases Not Yet Adopted 2 15 Percent Months
16 Fiscal Year Increase of Revenue
17 FY 23/24 6.40% 4 815,333 2, 445,998 2,445,998 2, 445,998 2,445,998 18 FY 24/25 6.40% 4 867,514 2,602,542 2,602,542 2,602,542 19 FY 25/26 6.40% 4 923,035 2,769,105 2,769,105
20 FY 26/27 6.40% 4 982,109 2,946,328
21 FY 27/28 2.50% 4 408,189
22 Total Additional Revenues $815,333 $3,313,512 $5,971, 575 $8,799,754 $11,172,162 23 24 Total Rate Revenues $38,962, 501 $41,457,146 $44,111,449 $46,935,628 $49,306,373 25 26 Other Income
27 Transfer from General Fund for City Water Use 636,691 691,891 736,172 783,287 822,810 4 28 Other Revenues 97,032 97,032 97,032 97,032 97,032 5
29 Investment Income 151,683 161,121 131,892 127,726 107,807 6 30 Total Other Income $885, 407 $950,045 $965,097 $1,008,046 $1,027,649 31 32 Total Revenues $39,847,908 $42, 407,191 $45,076,546 $47, 943,674 $50,334,023 33 34 Total Sources of Funds $69,894, 556 $65,590,340 $63,923,444 $65,739,313 $65,220,336 35 Line No
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Operating Statement
Table A-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Utility Operating Statement
Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 NotesLine No 36 FUND 601 USES OF FUNDS
37 O&M Expenditures 7
38 Salaries & Fringe Costs $7, 803,861 $8,176,893 $8,503, 969 $8,716,568 $8,934,483 39 Contractual Services 570,531 475,484 494,503 506,866 519,538 40 Commodities Other than Wate r Costs 567,215 555,215 577,424 591,859 606,656 41 Water Use Objectives Compliance Cost 2,000,000 2,000,000 2, 000,000 2,000,000 2,000,000 42 Other O&M
43 Administrative Services Char ge 1,402,200 1,444,200 1, 501,968 1,539,517 1,578,005 44 Street Repair Cost s 814,455 814,455 847,033 868,209 889,914 45 Remainder of Other O&M Expenditures 25,283 25,283 26,294 26,952 27,625 46 Projected Water Costs 8
47 PFAS O&M Costs 2,872,745 4,677,169 5,554,594 11,165,129 11,444,257 48 Electricity 1,111,256 1, 155,706 1,184,599 1, 214,214 1,244,569 49 Natural Gas 289,311 300,884 308,406 316,116 324,019
50 WOCWB Shared Water Transmissi on Lines 47,208 47,208 49,096 50,324 51,582 51 OCWD Replenishment Assessment 10,487,623 10,487,623 10,487, 623 10,487,623 10,487,623 9 52 MWD Tier 1 Treated Water 3, 585,842 3,585,842 3,585,842 3,585,842 3,585,842 9 53 MWD Readiness to Serve Ch arge 541,486 541,486 541,486 541,486 541,486 9 54 MWD Capacity Charge 207,834 207,834 207,834 207,834 207,834 9 55 MWD Connection Charge 492,275 492,275 492,275 492,275 492,275 9 56 MWD Choice Programs 28,734 28,734 28,734 28,734 28,734 9 57 OCWD Reimbursement (166,293) (986, 920) (1,072,147) (1,389,694) (1,519,503) 10 58 Subtotal O&M Expenditures $32, 681,566 $34,029,371 $35,319, 533 $40,949,853 $41,444,938 59 60 Debt Service 11
61 Intercity Loan Principal and Inte rest $1,202,496 $1,202,496 $1, 202,496 $1,202,496 $1,202,496 62 2015 Revenue Bonds 939,30 00000
63 2020A Revenue Bonds 1,720,175 1,714,575 1,717,775 1,719,375 1,719,375 6 4 F u t u r e R e v e n u e B o n d D e b t S e r v i c e 00000 65 Subtotal Debt Service $3, 861,971 $2,917,071 $2,920, 271 $2,921,871 $2,921,871 66 67 Capital Equipment $314,000 $157,000 $157,000 $157,000 $157,000 12 68 69 Transfer to Fund 602 $6,000, 000 $6,000,000 $4,000,000 $3,000,000 $2,000,000 70 Transfer to Fund 603 $3,853, 870 $3,640,000 $3,731,000 $3,824,275 $3,919,882 71 72 Total Uses of Funds $46,711, 408 $46,743,442 $46,127,805 $50,853,000 $50,443,691 73 74 End of Year Balance, Fund 601 $23,183,148 $18,846,897 $17,795, 639 $14,886,313 $14,776,645 11132023 Garden Grove Water Rate Study Model
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Operating Statement
Table A-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Utility Operating Statement
Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 NotesLine No 75 FINANCIAL PERFORMANCE INDICATORS
83 84 End of Year (EOY) Reserve Balance Criteria
85 Criteria: Total comb ined fund 601,602,603 Reserves 86 Combined EOY 601,602, 603 Balance $24,787,896 $20,291, 090 $19,650,220 $16,585,747 $16,994,667 87 Target Reserve Balance
88 2 Months Cash Outflow 5,647, 344 5,871,978 6,087,005 7,025,392 7,107,906 13 89 Plus $500,000 for Contingenc ies 500,000 500,000 500,000 500,000 500,000 90 Plus 5% of Net Plant 8,596, 201 8,820,908 8,922,414 9,004,721 9,012,027 14 91 Subtotal $14,743,545 $15,192, 885 $15,509,419 $16,530,112 $16,619,933 92 Exceeds Target? Yes Yes Yes Yes Yes
93 94 Debt Service Coverage Ratio
95 Criteria: Debt Service Coverage Ratio > 1.75
96 Gross Revenue $42,217,612 $44, 928,556 $47,759,278 $50, 798,102 $53,332,477 97 Less O&M Expenses ($32,681,566) ($34, 029,371) ($35,319,533) ( $40,949,853) ($41,444,938) 98 Revenue Available for Debt Serv ice $9,536,045 $10,899,185 $12, 439,745 $9,848,249 $11,887,539 99 100 Revenue Bond Debt Service $2, 659,475 $1,714,575 $1,717, 775 $1,719,375 $1,719,375 101 Debt Service Coverage Ratio 3.59 6.36 7.24 5.73 6.91 102 Exceeds Target? Yes Yes Yes Yes Yes
103
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Operating Statement
Table A-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Utility Operating Statement
Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 NotesLine No 104 FUND 602 (WATER CAPITAL) SOURCES OF FUNDS
105 Beginning of Year Balance, Fund 602 $4,341,667 $663,606 $503,051 $913,439 $758,292 1 106
107 Capital Improvement Charge
108 Revenues Under Adopted Rates $2, 320,206 $2,320,206 $2,320,206 $2,320,206 $2,320,206 2 109
110 Additional Capital Improvement Charge Revenues 2
111 Months
112 Fiscal Year % Increase of Revenue
113 FY 23/24 6.40% 4 49,498 148,493 148,493 148,493 148,493 114 FY 24/25 6.40% 4 52,666 157,997 157,997 157,997
115 FY 25/26 6.40% 4 56,036 168,109 168,109
116 FY 26/27 6.40% 4 59,623 178,868
117 FY 27/28 2.50% 4 24,781
118 Total Additional Revenues $49,498 $201,159 $362,526 $534,222 $678,248 119
120 Other Revenues (Interest) $0 $0 $0 $0 $0
1 2 1 C I E D B D e b t P r o c e e d s 00000
122 Remaining 2020A Revenue Bond Proceeds 6,800,000 15
123 Transfer From Fund 601 6,000, 000 6,000,000 4,000,000 3,000,000 2,000,000 124 Total Sources of Funds, 602 $19, 511,371 $9,184,971 $7,185, 783 $6,767,867 $5,756,746 125
126 FUND 602 (WATER CAPITAL) USES OF FUNDS
127 Capital Improvements $18,847, 765 $8,681,920 $6,272,344 $6,009,575 $4,479,865 16 128 Water Ops Labor Charged to Fund 602 00000 1 7
129 Transfer to Fund 603 00000
130 Total Use of Funds $18,847,765 $8,681,920 $6,272,344 $6,009,575 $4,479,865 131
132 Ending Year Fund Balance, Fund 602 $663,606 $503,051 $913,439 $758,292 $1,276,881 133
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Operating Statement
Table A-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Utility Operating Statement
Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 NotesLine No 134 FUND 603 (WATER REPLACEMENT) SOURCES OF FUNDS
135 Beginning of Year Balance, Fund 603 $894,498 $941,141 $941,141 $941,141 $941,141 136
137 Other Revenues (Interest) $0 $0 $0 $0 $0
138 Transfer From Fund 601 3,853, 870 3,640,000 3,731,000 3,824,275 3,919,882 139 Transfer From Fund 602 00000
140 Total Sources of Funds, 603 $4, 748,368 $4,581,141 $4,672, 141 $4,765,416 $4,861,023 141
142 FUND 603 (WATER REPLACEMENT) USES OF FUNDS
143 Replacement Expenditures
144 Water Main Replacement $3,807, 227 $3,640,000 $3,731,000 $3,824,275 $3,919,882 18 145 Total Use of Funds $3,807,227 $3,640,000 $3,731,000 $3,824,275 $3,919,882 146
147 Ending Year Fund Balance, Fund 603 $941,141 $941,141 $941,141 $941,141 $941,141 11132023 Garden Grove Water Rate Study Model
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Operating Statement
Table A-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Utility Operating Statement
Projected
FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 NotesLine No Table A-10 Notes:
(1) FY 23/24 projected beginning of year balance is the Cash in Bank balance as of 3/27/23. Source: City staff, 3/28/23. (2) See Table A-11 for more detail. Projections are based on across-the-board percentage rate increases for this draft. (3) Equals FY 21/22 actuals. Low water use credit proposed for elimination. (4) Source: email from City staff, 4/27/2023. Revenue increases proportionally with increases in rates in subsequent years and decreases with conservation adjustment.
(5) Source: email from city staff 4/27/23. Includes late fees, after-hours fees, other revenues, and signs/barricades fee.

FY 24/25 and subsequent years: 0.4% of Beginning of Year combined Fund 601, 602, and 603 Fund Balance. (6) FY 22/23 source: email from city staff 4/27/23 (FY 22/23 budget). 24/25 and subsequent years: 0.4% of Beginning of Year combined Fund 601, 602, and 603 Fund Balance.
(7) Source for all items except Projected Water Costs: FY 22/23 Budget, provided by City staff, 5/13/22. Water Use Objectives cost from City staff, June 2023.
(8) See Table A-4 for more detail.
(9) OCWD Replenishment Assessment and MWD costs are at FY 23/24 rates. Subsequent increases in these costs will be recovered through future pass-through adjustments.
(10) FY 23/24 per City staff, 6/8/23. Subsequent years see Table A-4 for more detail. (11) See Table A-9 for more detail.
(12) FY 23/24 from City's capital equipment sheet per City staff 4/3/23. Subsequent years: 50% of FY 23/24 value per City staff, April 2023. (13) Source: 2 months of O&M expenses plus projected water supply costs to be recovered through future pass-through adjustments. (14) Equals 5% of projected FY 27/28 gross plant, buildings/structures, and land. FY 22/23 value from City asset records, provided by City on 4/17/23. Value adjusted in each year by subtracting depreciation expense and adding projected capital improvement expense. FY 21/22 actual depreciation expense used in this calculation. (15) Source: City staff, April 2023.
(16) Source: City staff, 5/2/23 via email, except for Well 26 Property Purchase from City staff 5/30/23. FY 22/23 includes carryover.

Costs are adjusted for inflation and do not include any capitalized labor. All labor that would be capitalized is included, for the purposes of this analysis, in the water ops labor charged to Funds 602 and 603, or in other labor included in the 601 Fund. (17) At the end of each year, engineering labor related to capital projects is charged to Fund 602. The cost of this labor is already included in the 601 Fund budget, so it is not included in this analysis as a Fund 602 expense. (18) Includes costs to replace services, hydrants, meters, valves, etc. Source: City staff, 5/2/23 via email 11132023 Garden Grove Water Rate Study Model
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Revenue Calculations
Table A-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Revenue Calculations
Table A-11-A
Number of Connections per Meter Size
Projected (1)
Line Meter Size FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 1 5/8" X 3/4" meter 28,529 28,529 28,529 28,529 28,529 28,529 2 1" meter 3,826 3,826 3,826 3,826 3,826 3,826
3 1 1/2" meter 864 864 864 864 864 864
4 2" meter 729 729 729 729 729 729
5 3 " m e t e r 5 75 75 75 75 75 7
6 4" meter 125 125 125 125 125 125
7 6 " m e t e r 5 65 65 65 65 65 6
8 8 " m e t e r 222222
9 1 0 " m e t e r 000000
10 Total 34,188 34,188 34,188 34,188 34,188 34,188
Notes:
(1) Number of Customers shown does not include Fire Service connections or abandoned connections. See Table A-2 for additional detail.

Table A-11-B
Number of Meter Equivalents
Meter
Projected Capacity, Equivalent
Meter Size FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (3) 11 5/8" X 3/4" meter 28,529 28,529 28,529 28,529 28,529 28,529 20 1.00 12 1" meter 9,565 9,565 9,565 9,565 9,565 9,565 50 2.50 13 1 1/2" meter 4,320 4,320 4,320 4,320 4,320 4,320 100 5.00 14 2" meter 5,832 5,832 5,832 5,832 5,832 5,832 160 8.00 15 3" meter 912 912 912 912 912 912 320 16.00
16 4" meter 3,125 3,125 3,125 3,125 3,125 3,125 500 25.00 17 6" meter 2,800 2,800 2, 800 2,800 2,800 2,800 1,000 50.00 1 8 8 " m e t e r 000000 1 , 6 0 0 8 0 . 0 0
1 9 1 0 " M e t e r 000000 2 , 4 0 0 120.00
20 Total 55,083 55,083 55,083 55,083 55,083 55,083
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Revenue Calculations
Table A-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Revenue Calculations
Table A-11-C
Projected Revenues from Bi-Monthly Capital Improvement Charge (Adopted Rates), First 8 Months of FY Projected Revenues, First 8 Months of FY
Meter Size FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 21 5/8 x 3/4" meter $798,812 $798,812 $798,812 $798,812 $798,812 $798,812 22 1" meter 267,820 267,820 267,820 267,820 267,820 267,820 23 1 1/2" meter 120,960 120,960 120,960 120,960 120,960 120,960 24 2" meter 163,296 163,296 163,296 163,296 163,296 163,296 25 3" meter 25,536 25,536 25,536 25,536 25,536 25,536
26 4" meter 87,500 87,500 87,500 87,500 87,500 87,500
27 6" meter 78,400 78,400 78,400 78,400 78,400 78,400
28 8" meter 4,480 4,480 4,480 4,480 4,480 4,480
2 9 1 0 " m e t e r 000000
30 Subtotal $1,546,804 $1,546,804 $1, 546,804 $1,546,804 $1,546,804 $1,546,804 Table A-11-D
Projected Revenues from Bi-Monthly Capital Improvement Charge (Adopted Rates), Last 4 Months of FY Projected Revenues, Last 4 Months of FY
Meter Size FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 31 5/8 x 3/4" meter $399,406 $399,406 $399,406 $399,406 $399,406 $399,406 32 1" meter 133,910 133,910 133,910 133,910 133,910 133,910 33 1 1/2" meter 60,480 60,480 60,480 60,480 60,480 60,480 34 2" meter 81,648 81,648 81,648 81,648 81,648 81,648
35 3" meter 12,768 12,768 12,768 12,768 12,768 12,768
36 4" meter 43,750 43,750 43,750 43,750 43,750 43,750
37 6" meter 39,200 39,200 39,200 39,200 39,200 39,200
38 8" meter 2,240 2,240 2,240 2,240 2,240 2,240
3 9 1 0 " m e t e r 000000
40 Subtotal $773,402 $773,402 $773,402 $773,402 $773,402 $773,402 Total Projected Bi-Monthly Capital Improvement Charge Revenues (Adopted Rates) FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
41 Total Projected Revenues $2,320,206 $2,320,206 $2,320,206 $2,320, 206 $2,320,206 $2,320,206 11132023 Garden Grove Water Rate Study Model
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Revenue Calculations
Table A-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Revenue Calculations
Table A-11-E
Projected Revenues from Bi-Monthly Minimum Charge (Adopted Rates) Projected Revenues, First 8 Months of FY
Meter Size FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 42 5/8 x 3/4" meter $3,862,827 $3, 862,827 $3,862,827 $3,862, 827 $3,862,827 $3,862,827 43 1" meter 772,546 772,546 772,546 772,546 772,546 772,546 44 1 1/2" meter 270,259 270,259 270,259 270,259 270,259 270,259 45 2" meter 324,988 324,988 324,988 324,988 324,988 324,988 46 3" meter 45,634 45,634 45,634 45,634 45,634 45,634
47 4" meter 149,960 149,960 149,960 149,960 149,960 149,960 48 6" meter 129,266 129,266 129,266 129,266 129,266 129,266 49 8" meter 7,277 7,277 7,277 7,277 7,277 7,277
5 0 1 0 " m e t e r 000000
51 Subtotal $5,562,757 $5,562,757 $5, 562,757 $5,562,757 $5,562,757 $5,562,757 Projected Revenues, First 8 Months of FY
Meter Size FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 52 5/8 x 3/4" meter $1,931,413 $1, 931,413 $1,931,413 $1,931, 413 $1,931,413 $1,931,413 53 1" meter 386,273 386,273 386,273 386,273 386,273 386,273 54 1 1/2" meter 135,130 135,130 135,130 135,130 135,130 135,130 55 2" meter 162,494 162,494 162,494 162,494 162,494 162,494 56 3" meter 22,817 22,817 22,817 22,817 22,817 22,817
57 4" meter 74,980 74,980 74,980 74,980 74,980 74,980
58 6" meter 64,633 64,633 64,633 64,633 64,633 64,633
59 8" meter 3,639 3,639 3,639 3,639 3,639 3,639
6 0 1 0 " m e t e r 000000
61 Subtotal $2,781,379 $2,781,379 $2, 781,379 $2,781,379 $2,781,379 $2,781,379 62 63
64 Total Projected Bi-Monthly Minimum Charge Revenues (Adopted Rates) 65 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 66 Total Projected Revenues $8,344,136 $8,344,136 $8,344,136 $8,344, 136 $8,344,136 $8,344,136 11132023 Garden Grove Water Rate Study Model
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Revenue Calculations
Table A-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Revenue Calculations
Table A-11-E
Projected Commodity Delivery Charge Revenues (Without Future Pass-Through), Adopted Rates per Ordinance 2890 FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
Tier 1 ccf
67 July-Feb 4,073,457 4,073,457 4, 073,457 4,073,457 4,073,457 4,073,457 68 Mar-June (rate change effect ive Jan, with 2 month lag) 1,818, 150 1,818,150 1,818,150 1, 818,150 1,818,150 1,818,150 69 70 Tier 1 $/cc
f
71 July-Feb $2.86 $2.86 $2.86 $2.86 $2.86 $2.86
72 Mar-June (rate change effective Jan, with 2 month lag) $2.86 $2.86 $2.86 $2.86 $2.86 $2.86 73 74 Tier 1 Commodity Delivery Char ge $, Excl. Pass Through $16,849,994 $16,849,994 $16,849,994 $16,849, 994 $16,849,994 $16,849,994 75 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 8,010,990 76 Tier 2 cc
f
77 July-Feb 1,465,342 1,465,342 1, 465,342 1,465,342 1,465,342 1,465,342 78 Mar-June 654,042 654,042 654,042 654,042 654,042 654,042 79 80 Tier 2 $/cc
f
81 July-Feb $4.40 $4.40 $4.40 $4.40 $4.40 $4.40
82 Mar-June $4.40 $4.40 $4.40 $4.40 $4.40 $4.40
83 84 Tier 2 Commodity Delivery Char ge $, Excl. Pass Through $9,325,288 $9,325,288 $9,325,288 $9,325, 288 $9,325,288 $9,325,288 11132023 Garden Grove Water Rate Study Model
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Revenue Calculations
Table A-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Revenue Calculations
Table A-11-f
Projected Revenues from Bi-Monthly Fire Service Charges Under Existing Rates Projected Revenues, First 8 Months of FY
Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 85 1 1/2" meter $36 $36 $36 $36 $36
86 2" meter 664 664 664 664 664
87 3" meter 223 223 223 223 223
88 4" meter 18,017 18,017 18,017 18,017 18,017
89 6" meter 120,268 120,268 120,268 120,268 120,268
90 8" meter 173,141 173,141 173,141 173,141 173,141
91 10" meter 17,592 17,592 17,592 17,592 17,592
92 Subtotal $329,940 $329,940 $329,940 $329,940 $329,940 93 94 Projected Revenues, Last 4 Months of FY
95 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 96 1 1/2" meter $18 $18 $18 $18 $18
97 2" meter 332 332 332 332 332
98 3" meter 111 111 111 111 111
99 4" meter 9,008 9,008 9,008 9,008 9,008
100 6" meter 60,134 60,134 60,134 60,134 60,134
101 8" meter 86,571 86,571 86,571 86,571 86,571
102 10" meter 8,796 8,796 8,796 8,796 8,796
103 Subtotal $164,970 $164,970 $164,970 $164,970 $164,970 104
105 Projected Revenues, Entire FY
106 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
107 Total Projected Revenue s $494,910 $494,910 $494,910 $494,910 $494,910 108
109
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FINAL
Revenue Calculations
Table A-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Revenue Calculations
Table A-11-F
Projected Pass Through Charge Revenues
FY 22/23 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
110 Projected Water Sales, cc f
111 July-Feb 5,538,798 5,538,798 5, 538,798 5,538,798 5,538,798 5,538,798 112 Mar-Jun 2,472,192 2,472,192 2, 472,192 2,472,192 2,472,192 2,472,192 113
114 Pass Through Charge, $/cc
f
115 Adopted, July-Feb $0.30 $0.40 $0.40 $0.40 $0.40 $0.40 116 Draft Calculation, Mar-Jun $0.40 $0.40 $0.40 $0.40 $0.40 $0.40 117
118 Pass Through Charge Revenues
119 July-Feb $1,661,640 $2,215,519 $2, 215,519 $2,215,519 $2,215,519 $2,215,519 120 Mar-June $988,877 $988,877 $988,877 $988,877 $988,877 $988,877 121 Total $2,650,516 $3,204,396 $3, 204,396 $3,204,396 $3,204,396 $3,204,396 11132023 Garden Grove Water Rate Study Model
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FINAL
Capital Improvement Plan
Table A-12
City of Garden Grove Water Services Department
2023 Water Rate Study
Capital Improvement Plan

Line Fund 602 Water Capital Fund Projects Carryforward
Budget FY
23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Total
1 1) Magnolia Reservoirs and Booster Pump Station Projec t $0 $800,000 $0 $0 $0 $0 $800,000 2 2) SCADA Implementation Projec t $436,956 $400,000 $1,505,000 $800,000 $1,500,000 $0 $4,641,956 3 3) SCADA -FP2 Pressure Monitoring Improvement s $0 $419,180 $0 $0 $0 $0 $419,180 4 4) SCADA - HP4-5 SCADA - Trask & Westhaven $0 $1,450,000 $0 $0 $0 $0 $1,450,000 5 5) SCADA - HP1-3 SCADA - Mag, Lampson, & WGG $0 $0 $900,000 $0 $0 $0 $900,000 6 6) Water Improvement Project Woodbury Rd and Taft S
t $0 $0 $1,200,000 $0 $0 $0 $1,200,000
7 7) Water Improvement Project - Orangewood and Yorkshire Ave (~7,400 ft ) $3,956,942 $0 $0 $0 $0 $0 $3,956,942 8 8) Water Improvement Project - Chapman Ave and Dale St (~10,000 ft ) $0 $5,000,000 $0 $0 $0 $0 $5,000,000 9 9) Well assessment (Well 16, 19, 25) $57,142 $0 $0 $0 $0 $0 $57,142 10 10) Well 19 Construction $0 $2,200,000 $0 $0 $0 $0 $2,200,000 11 11) Water Improvement Project - Woodbury Ave & Anabel Ave (~3,500 ft ) $0 $2,097,545 $0 $0 $0 $0 $2,097,545
12 12) Water Main Replacement (2 miles each year ) $0 $0 $0 $2,084,000 $4,000,000 $4,000,000 $10,084,000 13 13) Design and Construction of Lampson and Trask Reservoirs Rehabilitatio n $0 $830,000 $3,000,000 $3,000,000 $0 $0 $6,830,000 14 14) Various Residential Streets Projects N of GG Blvd & E of Dale $0 $1,200,000 $0 $0 $0 $0 $1,200,000 15 15) Water Transmission Line Study $0 $0 $100,000 $0 $0 $0 $100,000 16 16) Well 26 Property Purchas
e $1,643,000 $1,643,000
17 Total $4,451,040 $14,396,725 $8,348,000 $5,884,000 $5,500,000 $4,000,000 $42,579,765 Source: City staff, 5/2/23 via email, except for (a) Well 26 Property Purchase from City staff 5/30/23 and Trask & Westhaven SCADA from City staff 6/15/23, and (b) Woodbury & Anabel Ave 7/27/23 from City staff based on construction bids received Line Calculation of Inflation Adjusted Fund 60 2 Carryforward FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Total 1 FY 23/24 Dollars, Fund 602 Water Capital Fund
2 Total expenses without labo
r $4,451,040 $14,396,725 $8,348,000 $5,884,000 $5,500,000 $4,000,000 $42,579,765 3 Labor expense s $0 $0 $0 $0 $0 $0 $0
4 Total expenses with labo r $4,451,040 $14,396,725 $8,348,000 $5,884,000 $5,500,000 $4,000,000 $42,579,765 5 6 Inflation Adjusted Dollars, Fund 602 Water Capital Fun d
7 Total expenses without labo r $4,451,040 $14,396,725 $8,681,920 $6,272,344 $6,009,575 $4,479,865 $44,291,469 8 Labor expense s $0 $0 $0 $0 $0 $0 $0
9 Total expenses with labo r $4,451,040 $14,396,725 $8,681,920 $6,272,344 $6,009,575 $4,479,865 $44,291,469 Estimated Funding, Fund 602 (FY 23/24 Dollars)
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Capital Improvement Plan

Line Fund 603 Water Replacement Fund Projects Carryforward FY23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Total 1 Replacement Expenditure s
2 Water Main Replacement (services, hydrants, meters, valves, etc. ) $0 $3,807,227 $3,500,000 $3,500,000 $3,500,000 $3,500,000 $17,807,227 3 Total $0 $3,807,227 $3,500,000 $3,500,000 $3,500,000 $3,500,000 $17,807,227 4 5 Calculation of Inflation Adjusted Fund 60
3 6 Inflation Adjusted Dollars, Fund 603 Water Replacement Fun d 7 16) Water Main Replacement (services, hydrants, meters, valves, etc. ) $0 $3,807,227 $3,640,000 $3,731,000 $3,824,275 $3,919,882 $18,922,384 Estimated Funding, Fund 603
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Water Rate Study – Garden Grove Water Services Division

A-1
Garden Grove Water Rate Study Report 11132023
Appendix B: Cost-of-Service Analysis

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Cost of Service
Table B-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Water System Cost-of-Service Analysis, FY 23/24 - Functionalization Factors Line Functionalization Rate Tier Public Fire
No. Factors Total Pumping Storage T&D Customer Meter Admin Calculation Protection Notes 1 Direct: Pumping 100.0% 100.0% Direct: Pumping
2 Direct: Storage 100.0% 100.0% Direct: Storage
3 Direct: T&D 100.0% 100.0% Direct: T&D
4 Direct: Customer 100.0% 100.0% Direct: Customer
5 Direct: Meter 100.0% 100.0% Direct: Meter
6 Direct: Admin 100.0% 100.0% Direct: Admin
7 Direct: Rate Tier Calculation 100.0% 100.0% Direct: Rate Tier Calculation 8 Direct: Fire Protection 100.0% 100.0% Direct: Fire Protection 9 Direct: Water Quality 100.0% 50.0% 50.0% Direct: Water Quality 10 Direct: Water Master Plan 100.0% 25.0% 25.0% 25.0% 25.0% Direct: Water Master Plan 11 Direct: T&D and Customer 100.0% 50.0% 50.0% Direct: T&D and Customer 12 Water Production Section Expenses 100.0% 25.0% 25.0% 50.0% Water Production Section Expense s 13 Distribution Section Expenses 100.0% 79.6% 20.4% Distribution Section Expenses 14 Debt Service: % (2) 100.0% 11.2% 25.9% 38.5% 5.1% 5.1% 0.1% 9.8% 4.5% Debt Service 15 603 Fund Replacements 100.0% 76.0% 9.0% 9.0% 6.0% 603 Fund Replacements 16 O&M with Exclusions, Amount $8,966,896 $1,141,719 $852,399 $4,246,577 $917,281 $58,177 $459,281 $1,261,260 $30,202 O&M with Exclusions 17 O&M with Exclusions, Percentage 100.0% 12.7% 9.5% 47.4% 10.2% 0.6% 5.1% 14.1% 0.3% O&M with Exclusions 18 Water Use Objectives Compliance 100.0% 100.0% Water Use Objectives Compliance 19 Package 3114 - Drainage/Misc Maintenance (5) 100.0% 50.0% 50.0% Package 3114 20 Package 3700 Contractual Expense Package 3700 Contractual Expense 21 2015 Revenue Bond Debt, Amount (7) $39,102,337 $10,037,785 $10,064,997 $4,811,631 $250,608 $6,583,958 $7,353,358 2015 Revenue Bond Debt 22 2015 Revenue Bond Debt, Percentage 25.7% 25.7% 12.3% 0.0% 0.0% 0.6% 16.8% 18.8% 2015 Revenue Bond Debt 23 Rate Revenue Requirement Rate Revenue Requirement
24 CIP, Amount $42,579,765 $4,082,710 $11,015,568 $17,628,661 $2,385,685 $2,385,685 $0 $3,843,000 $1,238,457 25 CIP, Percentage 100.0% 9.6% 25.9% 41.4% 5.6% 5.6% 0.0% 9.0% 2.9% CIP Notes for Tables B-1 through B-5
(1) Not used.
(2) Refer to Table B-3
(3) Refer to Table B-3
(4) Refer to Table B-10
(5) Per City staff (7/11/17), this is miscellaneous maintenance performed by the Street Department repairing trenches and sidewa lks following maintenance of water system facilities. (6) Per City staff (7/11/17), natural gas expenses are approximately 70% booster pumping and 30% source production, and electric ity expenses are 70% source production and 30% pumping. 11132023 Garden Grove Water Rate Study Model
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Cost of Service
Table B-3
City of Garden Grove Water Services Department
2023 Water Rate Study

Water System Cost-of-Service Analysis - Functionalization of Phase 1 CIP Line Project Projected Cost Pumping Storage T&D Customer Meter Admin Rate Tier
Calculation
Public Fire
Protection Total
1 1) Magnolia Reservoirs and Booster Pump Station Project $800,000 40% 60% 100.000% 2 2) SCADA Implementation Project $4,641,956 50% 50% 100.000% 3 3) SCADA -FP2 Pressure Monitoring Improvements $419,180 50% 50% 100.000% 4 4) SCADA - HP4-5 SCADA - Trask & Westhaven $1,450,000 50% 50% 100.000% 5 5) SCADA - HP1-3 SCADA - Mag, Lampson, & WGG $900,000 50% 50% 100.000% 6 6) Water Improvement Project Woodbury Rd and Taft St $1,200,000 80% 6% 6% 8% 100.000% 7 7) Water Improvement Project - Orangewood and Yorkshire Ave (~7,400 ft) $3,956,942 76% 9% 9% 6% 100.000%
8 8) Water Improvement Project - Chapman Ave and Dale St (~10,000 ft) $5,000,000 76% 9% 9% 6% 100.000%
9 9) Well assessment (Well 16, 19, 25) $57,142 100% 100.000% 10 10) Well 19 Construction $2,200,000 100% 100.000%
11 11) Water Improvement Project - Woodbury Ave & Anabel Ave (~3,500 ft) $2,097,545 100% 100.000%
12 12) Water Main Replacement (2 miles each year) $10,084,000 76% 9% 9% 6% 100.000% 13 13) Design and Construction of Lampson and Trask
Reservoirs Rehabilitation $6,830,000 100% 100.000%
14 14) Various Residential Streets Projects N of GG Blvd & E of Dale $1,200,000 50% 50% 100.000%
15 15) Water Transmission Line Study $100,000 100% 100.000% 16) Well 26 Property Purchase $1,643,000 100% 100.000%
Total $42,579,765 $4,082,710 $11,015,568 $17,628,661 $2,385,685 $2,385,685 $0 $3,843,000 $1,238,457 $42,579,765 As Percent 100% 10% 26% 41% 6% 6% 0% 9% 3% 100%
Notes:
(1) Functionalization percentages developed by FG Solutions based on the communication with the City. (2) Source: City staff, 7/6/23 email.
(3) SCADA facilitates communcation between pumps and reservoirs, and are functionalized accordingly. (4) per City staff, 7/5/23 email. Percentage allocation to customers, meters, and hydrants is based on the estimated costs of these items. Service lines and meters portion of this project is divided between customer an d
(5) This project is entirely the replacement of service lines and meters, per City staff 7/5/23. 11132023 Garden Grove Water Rate Study Model
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Cost of Service
Table B-4
City of Garden Grove Water Services Department
2023 Water Rate Study
Water System Cost-of-Service Analysis, FY 17/18 - Functionalization of Debt Service Payments Line Debt Issuance (1)
Five Year
Total, $ Pumping Storage T&D Customer Meter Admin
Rate Tier
Calculation
Fire
Protection Total
1 Existing Debt (1)
2 Revenue and Refunding Bonds 2015 $939,300 25.7% 25.7% 12.3% 0.0% 0.0% 0.6% 16.8% 18.8% 100.000% 3 Water Revenue Bonds Series 2020A $8,591,275 9.6% 25.9% 41.4% 5.6% 5.6% 0.0% 9.0% 2.9% 100.000% 4 5 Future Debt
6 Revenue Bond $0
7 Total $9,530,575 $1,064,888 $2,464,377 $3,672,500 $481,357 $481,357 $6,020 $933,555 $426,521 8 As Percent 100% 11.2% 25.9% 38.5% 5.1% 5.1% 0.1% 9.8% 4.5% Notes:
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Cost of Service
Table B-5
City of Garden Grove Water Services Department
2023 Water Rate Study
Water System Cost-of-Service Analysis, FY 23/24 - Functionalization of O & M Expenses Net of PFAS O&M, City Admin, and Street Damages Table B-1
Line FY 23/24 Rate Tier Fire Line No. Functionalization No. Total Pumping Storage T&D Customer Meter Admin Calculations Protection Reference Factor 1 WATER OPS-WATER ADMIN, 50001 - Salaries $157,815 $0 $0 $0 $0 $0 $157,815 $0 $0 6 Direct: Admin 2 WATER OPS-ENG, 50001 - Salaries $429,558 $41,188 $111,128 $177,843 $24,068 $24,068 $0 $38,769 $12,494 25 CIP 3 WATER OPS-WATER PROD, 50001 - Salaries $1,123,223 $280,806 $280,806 $0 $0 $0 $0 $561,611 $0 12 Water Production Section Expenses 4 WATER OPS-WATER DIST, 50001 - Salaries $832,005 $0 $0 $662,523 $169,483 $0 $0 $0 $0 13 Distribution Section Expenses 5 WATER OPS-WATER QUAL, 50001 - Salaries $416,421 $208,210 $0 $208,210 $0 $0 $0 $0 $0 9 Direct: Water Quality 6 WATER OPS-WATER DIST, 50001 - Salaries $11,555 $0 $0 $9,201 $2,354 $0 $0 $0 $0 13 Distribution Section Expenses 7 WATER OPS-WATER DIST, 50001 - Salaries $58,040 $0 $0 $46,217 $11,823 $0 $0 $0 $0 13 Distribution Section Expenses 8 WATER OPS-WATER DIST, 50001 - Salaries $181,056 $0 $0 $144,174 $36,882 $0 $0 $0 $0 13 Distribution Section Expenses 9 WATER OPS-WATER DIST, 50001 - Salaries $18,152 $0 $0 $14,454 $3,698 $0 $0 $0 $0 13 Distribution Section Expenses 10 WATER OPS-WATER DIST, 50001 - Salaries $4,302 $0 $0 $3,425 $876 $0 $0 $0 $0 13 Distribution Section Expenses 11 WATER OPS-WATER DIST, 50001 - Salaries $21,849 $0 $0 $17,398 $4,451 $0 $0 $0 $0 13 Distribution Section Expenses 12 WATER OPS-WATER DIST, 50001 - Salaries $32,798 $0 $0 $26,117 $6,681 $0 $0 $0 $0 13 Distribution Section Expenses 13 WATER OPS-WATER DIST, 50001 - Salaries $168,971 $0 $0 $134,551 $34,420 $0 $0 $0 $0 13 Distribution Section Expenses 14 WATER OPS-WATER DIST, 50001 - Salaries $123,082 $0 $0 $98,009 $25,072 $0 $0 $0 $0 13 Distribution Section Expenses 15 WATER OPS-WATER DIST, 50001 - Salaries $26,548 $0 $0 $21,140 $5,408 $0 $0 $0 $0 13 Distribution Section Expenses 16 WATER OPS-WATER DIST, 50001 - Salaries $56,179 $0 $0 $44,735 $11,444 $0 $0 $0 $0 13 Distribution Section Expenses 17 WATER OPS-WATER DIST, 50001 - Salaries $44,453 $0 $0 $35,398 $9,055 $0 $0 $0 $0 13 Distribution Section Expenses 18 WATER OPS-WATER DIST, 50001 - Salaries $66,271 $0 $0 $52,772 $13,500 $0 $0 $0 $0 13 Distribution Section Expenses 19 WATER OPS-WATER DIST, 50001 - Salaries $95,686 $0 $0 $76,195 $19,492 $0 $0 $0 $0 13 Distribution Section Expenses 20 WATER OPS-WATER DIST, 50001 - Salaries $145,395 $0 $0 $115,778 $29,618 $0 $0 $0 $0 13 Distribution Section Expenses 21 WATER OPS-WATER DIST, 50001 - Salaries $38,605 $0 $0 $30,741 $7,864 $0 $0 $0 $0 13 Distribution Section Expenses 22 WATER OPS-WATER DIST, 50001 - Salaries $20,365 $0 $0 $16,217 $4,149 $0 $0 $0 $0 13 Distribution Section Expenses 23 WATER OPS-WATER ADMIN, 50007 - Fringe Costs $93,858 $0 $0 $0 $0 $0 $93,858 $0 $0 6 Direct: Admin 24 WATER OPS-ENG, 50007 - Fringe Costs $351,164 $33,671 $90,848 $145,387 $19,675 $19,675 $0 $31,694 $10,214 25 CIP 25 WATER OPS-WATER PROD, 50007 - Fringe Costs $1,080,339 $270,085 $270,085 $0 $0 $0 $0 $540,169 $0 12 Water Production Section Expenses 26 WATER OPS-WATER DIST, 50007 - Fringe Costs $908,603 $0 $0 $723,517 $185,086 $0 $0 $0 $0 13 Distribution Section Expenses 27 WATER OPS-WATER QUAL, 50007 - Fringe Costs $343,172 $171,586 $0 $171,586 $0 $0 $0 $0 $0 9 Direct: Water Quality 28 WATER OPS-WATER DIST, 50007 - Fringe Costs $7,336 $0 $0 $5,842 $1,494 $0 $0 $0 $0 13 Distribution Section Expenses 29 WATER OPS-WATER DIST, 50007 - Fringe Costs $47,938 $0 $0 $38,173 $9,765 $0 $0 $0 $0 13 Distribution Section Expenses 30 WATER OPS-WATER DIST, 50007 - Fringe Costs $151,223 $0 $0 $120,419 $30,805 $0 $0 $0 $0 13 Distribution Section Expenses 31 WATER OPS-WATER DIST, 50007 - Fringe Costs $13,574 $0 $0 $10,809 $2,765 $0 $0 $0 $0 13 Distribution Section Expenses 32 WATER OPS-WATER DIST, 50007 - Fringe Costs $3,278 $0 $0 $2,610 $668 $0 $0 $0 $0 13 Distribution Section Expenses 33 WATER OPS-WATER DIST, 50007 - Fringe Costs $19,838 $0 $0 $15,797 $4,041 $0 $0 $0 $0 13 Distribution Section Expenses 34 WATER OPS-WATER DIST, 50007 - Fringe Costs $19,652 $0 $0 $15,649 $4,003 $0 $0 $0 $0 13 Distribution Section Expenses 35 WATER OPS-WATER DIST, 50007 - Fringe Costs $153,623 $0 $0 $122,330 $31,294 $0 $0 $0 $0 13 Distribution Section Expenses 36 WATER OPS-WATER DIST, 50007 - Fringe Costs $95,805 $0 $0 $76,289 $19,516 $0 $0 $0 $0 13 Distribution Section Expenses 37 WATER OPS-WATER DIST, 50007 - Fringe Costs $22,463 $0 $0 $17,887 $4,576 $0 $0 $0 $0 13 Distribution Section Expenses 38 WATER OPS-WATER DIST, 50007 - Fringe Costs $51,636 $0 $0 $41,117 $10,518 $0 $0 $0 $0 13 Distribution Section Expenses 39 WATER OPS-WATER DIST, 50007 - Fringe Costs $37,038 $0 $0 $29,493 $7,545 $0 $0 $0 $0 13 Distribution Section Expenses 40 WATER OPS-WATER DIST, 50007 - Fringe Costs $51,129 $0 $0 $40,714 $10,415 $0 $0 $0 $0 13 Distribution Section Expenses 41 WATER OPS-WATER DIST, 50007 - Fringe Costs $94,754 $0 $0 $75,452 $19,302 $0 $0 $0 $0 13 Distribution Section Expenses 42 WATER OPS-WATER DIST, 50007 - Fringe Costs $136,189 $0 $0 $108,447 $27,742 $0 $0 $0 $0 13 Distribution Section Expenses 43 WATER OPS-WATER DIST, 50007 - Fringe Costs $32,340 $0 $0 $25,753 $6,588 $0 $0 $0 $0 13 Distribution Section Expenses 11132023 Garden Grove Water Rate Study Model
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Cost of Service
44 WATER OPS-WATER DIST, 50007 - Fringe Costs $16,582 $0 $0 $13,204 $3,378 $0 $0 $0 $0 13 Distribution Section Expenses 45 WATER OPS-WATER ADMIN, 51001 - CONTRACTUAL SERV $66,789 $0 $0 $0 $0 $0 $66,789 $0 $0 6 Direct: Admin 46 WATER OPS-CAPITAL, 51001 - CONTRACTUAL SERV $136,425 $13,081 $35,294 $56,482 $7,644 $7,644 $0 $12,313 $3,968 25 CIP 47 WATER OPS-ENG, 51001 - CONTRACTUAL SERV $43,379 $4,159 $11,222 $17,960 $2,430 $2,430 $0 $3,915 $1,262 25 CIP 48 WATER OPS-WATER PROD, 51001 - CONTRACTUAL SERV $129,530 $32,383 $32,383 $0 $0 $0 $0 $64,765 $0 12 Water Production Section Expenses 49 WATER OPS-WATER DIST, 51001 - CONTRACTUAL SERV $129,529 $0 $0 $103,143 $26,386 $0 $0 $0 $0 13 Distribution Section Expenses 50 WATER OPS-WATER QUAL, 51001 - CONTRACTUAL SERV $64,879 $0 $0 $0 $0 $0 $64,879 $0 $0 6 Direct: Admin 51 WATER OPS-WATER ADMIN, 51401 - REGISTRATION FEES $500 $0 $0 $0 $0 $0 $500 $0 $0 6 Direct: Admin 52 WATER OPS-WATER ADMIN, 51402 - TUITION/TRAINING $10,998 $0 $0 $0 $0 $0 $10,998 $0 $0 6 Direct: Admin 53 WATER OPS-WATER ADMIN, 51404 - CITY MEMBERSHIPS $12,835 $0 $0 $0 $0 $0 $12,835 $0 $0 6 Direct: Admin 54 WATER OPS-WATER ADMIN, 52001 - COMMODITIES $50,894 $0 $0 $0 $0 $0 $50,894 $0 $0 6 Direct: Admin 55 WATER OPS-ENG, 52001 - COMMODITIES $77,588 $7,439 $20,072 $32,123 $4,347 $4,347 $0 $7,003 $2,257 25 CIP 56 WATER OPS-WATER PROD, 52001 - COMMODITIES $2,000 $500 $500 $0 $0 $0 $0 $1,000 $0 12 Water Production Section Expenses 57 WATER OPS-WATER DIST, 52001 - COMMODITIES $279,557 $0 $0 $222,610 $56,947 $0 $0 $0 $0 13 Distribution Section Expenses 58 WATER OPS-WATER QUAL, 52001 - COMMODITIES $157,176 $78,588 $0 $78,588 $0 $0 $0 $0 $0 9 Direct: Water Quality 59 WATER OPS-WATER ADMIN, 52106 - BOOKS/SUBSCRIPTION S $713 $0 $0 $0 $0 $0 $713 $0 $0 6 Direct: Admin 60 WATER OPS-ENG, 52106 - BOOKS/SUBSCRIPTIONS $237 $23 $61 $98 $13 $13 $0 $21 $7 25 CIP 61 Total O&M $8,966,890 $1,141,719 $852,399 $4,246,577 $917,281 $58,177 $459,281 $1,261,260 $30,202 Math Check, Table A-6 $8,966,890
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Cost of Service
Table B-6
City of Garden Grove Water Services Department
2023 Water Rate Study
Water System Cost-of-Service Analysis, FY 23/24 - Functionalization of Rate Revenue Requirement Table B-1
Line FY 23/24 Rate Tier Fire Line No. Functionalization No. Total Pumping Storage T& D Customer Meter Admin Calculations Protection Reference Facto r 1 O&M Expenses
2 O&M Other than PFAS O&M, City Admin, and Street Damage $8,966,890 $1,141,719 $852,399 $4,246,577 $917,281 $58,177 $459,281 $1,261,260 $30,202 See Table B-5 3 Water Use Objectives Compliance Cos t $2,000,000 $0 $0 $0 $0 $0 $0 $2,000,000 $0 18 Water Use Objectives Complianc e 4 Other O&M
5 Administrative Services Charge $1,402,200 $0 $0 $0 $0 $0 $1,402,200 $0 $0 6 Direct: Admin 6 Street Repair Costs $814,455 $0 $0 $407,228 $407,228 $0 $0 $0 $0 11 Direct: T&D and Customer 7 Projected Water Cost s
8 PFAS O&M Costs $2,872,745 $0 $0 $0 $0 $0 $0 $2,872,745 $0 7 Direct: Rate Tier Calculation 9 Electricity $1,111,256 $0 $0 $0 $0 $0 $0 $1,111,256 $0 7 Direct: Rate Tier Calculation 10 Natural Gas $289,311 $0 $0 $0 $0 $0 $0 $289,311 $0 7 Direct: Rate Tier Calculation 11 WOCWB Shared Water Transmission Line s $47,208 $0 $0 $0 $0 $0 $0 $47,208 $0 7 Direct: Rate Tier Calculation 12 OCWD Replenishment Assessmen t $10,487,623 $0 $0 $0 $0 $0 $0 $10,487,623 $0 7 Direct: Rate Tier Calculation 13 MWD Tier 1 Treated Water $3,585,842 $0 $0 $0 $0 $0 $0 $3,585,842 $0 7 Direct: Rate Tier Calculation 14 MWD Readiness to Serve Charge $541,486 $0 $0 $0 $0 $0 $0 $541,486 $0 7 Direct: Rate Tier Calculation 15 MWD Capacity Charge $207,834 $0 $0 $0 $0 $0 $0 $207,834 $0 7 Direct: Rate Tier Calculation 16 MWD Connection Charge $492,275 $0 $0 $0 $0 $0 $0 $492,275 $0 7 Direct: Rate Tier Calculation 17 MWD Choice Programs 28,734 $0 $0 $0 $0 $0 $0 $28,734 $0 7 Direct: Rate Tier Calculation 18 OCWD Reimbursemen t ($166,293) $0 $0 $0 $0 $0 $0 ($166,293) $0 7 Direct: Rate Tier Calculation 19 Debt Service
20 Existing Revenue Bonds $2,659,475 $297,153 $687,676 $1,024,799 $134,321 $134,321 $1,680 $260,505 $119,019 14 Debt Service 21 Intercity Loan $1,202,496 $0 $0 $601,248 $601,248 $0 $0 $0 $0 11 Direct: T&D and Customer 22 Capital Equipment $314,000 $0 $0 $314,000 $0 $0 $0 $0 $0 3 Direct: T&D 23 Capital Improvement s $18,847,765 $1,807,195 $4,875,998 $7,803,257 $1,056,014 $1,056,014 $0 $1,701,089 $548,198 25 CIP 24 Water Main Replacement $3,807,227 $0 $0 $2,893,493 $342,650 $342,650 $0 $0 $228,434 15 603 Fund Replacements 25 Plus Revenue Adjustments (Write-offs) $55,214 $0 $0 $0 $0 $0 $55,214 $0 $0 6 Direct: Admin 26 Less Other Revenue s
27 Other Revenue s ($97,032) $0 $0 $0 $0 $0 ($97,032) $0 $0 6 Direct: Admin 28 Investment Incom e ($151,683) $0 $0 $0 $0 $0 ($151,683) $0 $0 6 Direct: Admin 29 Remaining 2020A Bond Proceeds ($6,800,000) ($652,010) ($1,759,189) ($2,815,302) ($380,995) ($380,995) $0 ($613,728) ($197,782) 25 CIP 30 Capital Improvement Charge Revenue s ($2,369,704) ($227,216) ($613,053) ($981,093) ($132,771) ($132,771) $0 ($213,876) ($68,924) 25 CIP 31 Less Change in Fund Balanc e ($10,494,918) ($1,006,293) ($2,715,080) ($4,345,053) ($588,016) ($588,016) $0 ($947,210) ($305,251) 25 CIP 32 Total Rate Revenue Requiremen t $39,654,407 $1,360,548 $1,328,751 $9,149,154 $2,356,960 $489,380 $1,669,660 $22,946,061 $353,896 33 Math Check Table A-10 $39,654,407
$0
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Cost of Service
Table B-7
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Cost-of-Service Analysis - Allocation Factors
Line Extra Capacity Customer Rate Tier Public Fire Public & Private No. Allocation Method Base Max Day Max Hour Customer Meter Calculation Protection Fire Protection Allocation Factors 1 Direct: Base 100% Direct: Base
2 Direct: Max Da y 100% Direct: Max Day
3 Direct: Max Hou r 100% Direct: Max Hour
4 Direct: Custome r 100% Direct: Customer
5 Direct: Meters & Service s 100% Direct: Meters & Services 6 Direct: Rate Tier Calculatio n 100% Direct: Rate Tier Calculation 7 Direct: Fire Protectio n 100% Direct: Fire Protection 8 Direct: Purchased Source (1 ) 50% 50% Direct: Purchased Source 9 Base and Max Day (gpm) (1) 14,583 4,375
10 Base and Max Day: % 76.92% 23.08% Base and Max Day
11 Weighted Average: % 35.29% 9.51% 10.48% 15.67% 3.25% 0.00% 2.35% 23.44% Weighted Average ex Rate Tier Cal c 12 Base, Max Day, Max Hour (gpm) (1) 14,583 4,375 7,292 13 Base, Max Day, Max Hour: % 55.56% 16.67% 27.78% Base, Max Day, Max Hour 14 Storage (1) 83.51% 12.87% 3.62% Storage
15 Administration (3
) 35.29% 9.51% 10.48% 15.67% 3.25% 0.00% 2.35% 23.44%
16 Transmission and Distribution (4 ) 34.44% 10.33% 17.22% 38.00% Transmission and Distributio n Notes:
(1) Refer to Table B-11 for further details.
(2) Not used.
(3) Based on a Weighted Average of other items in Table B-8 below excluding Rate Tier Calculation s
(4) 36% allocated to fire protection, remainder is allocated based on the Base, Max Day, and Max Hour classification factor. Se e Table B-11 for calculation 11132023 Garden Grove Water Rate Study Model
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Cost of Service
Table B-8
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Cost-of-Service Analysis - Allocation of Rate Revenue Requirement Public Public and Table B-7
Line FY 23/24 Rate Tier Fire Private Fire Line No.

No. Projection Base Max Day (2) Max Hour(2) Customer Meter Calculations Protection Protection Reference 1 Water System Expense s
2 Pumping $1,360,548 $1,046,575 $313,973 $0 $0 $0 $0 $0 $0 10 3 Storage $1,328,751 $1,109,632 $170,983 $0 $0 $0 $0 $0 $48,136 14 4 T&D $9,149,154 $3,151,375 $945,413 $1,575,688 $0 $0 $0 $0 $3,476,679 16 5 Custome
r $2,356,960 $0 $0 $0 $2,356,960 $0 $0 $0 $0 4
6 Mete r $489,380 $0 $0 $0 $0 $489,380 $0 $0 $0 5
7 Administration (3 ) $1,669,660 $589,271 $158,806 $174,940 $261,680 $54,333 $0 $39,291 $391,340 8 Rate Tier Calculation s $22,946,061 $0 $0 $0 $0 $0 $22,946,061 $0 $0 6 9 Public Fire Protectio n $353,896 $0 $0 $0 $0 $0 $0 $353,896 $0 7 10 Reallocate Public FP (4 ) $0 $0 $0 $0 $1,856,414 $1,856,414 $0 ($393,187) ($3,319,641) Not Applicabl e 11 Total $39,654,410 $5,896,853 $1,589,175 $1,750,628 $4,475,054 $2,400,127 $22,946,061 $0 $596,514 12 Percent of Tota l 100% 15% 4% 4% 11% 6% 58% 0% 2%
13 Check, OS $39,654,407
Notes:
(1) Refer to Table B-5 for Functionalization totals
(2) Peaking costs associated with Max-Day and Max-Hour extra capacity are also included in the Rate Tier Calculation in Appendix C
(3) Administrative costs are based on a weighted average of other items in this table except those allocated to the Rate Tier Ca lculations. They are no allocated to the Rate Tier Calcualtion to improve the transparency of the Rate Tier Calculation (4) See Table B- 9
Extra Capacity Customer
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Cost of Service
Table B-9
City of Garden Grove Water Services Department
2023 Water Rate Study
Water Cost-of-Service Analysis - Re-Allocate Public Fire Protection Costs Line
1 Public and Private Fire Protection Revenue Requiremen t $3,916,155 See Table B- 7, rows 1 through 9 2 Number of Fire Protection Equivalent Connection s 525,251 See Table B-11, Section 3 3 Annual Cost per Fire Protection Equivalent Connectio n $7.46 4 5 Number of Private Fire Protection Equivalent Connection s 80,007 See Table B-11, Section 3
6 Annual Revenue Requirement from Private Fire Protection Equivalent Connection $596,514 7 8 Number of Public Fire Protection Equivalent Connection s 445,244 See Table B-11, Section 3
9 Annual Revenue Requirement from Public Fire Protection Equivalent Connection 10 Public and Private Fire Protection Allocatio n $3,319,641 11 Public Only Fire Protection Allocatio n $393,187
12 Total $3,712,828
13 14 50% of this Revenue Will Be Recovered from Customers on a per-Meter Equivalent Basi s $1,856,414
15 50% of this Revenue Will Be Recovered from Customers on a per-Account Basi s $1,856,414 16 17 Cost recovery by meter equivalent is proposed in this Rate Study because customers with larger meters typically hav 18 larger fire flow requirements. Cost recovery by account is porposed in this Rate Study because the majority of hydrants are i n residential area 19 Cost recovery by meter equivalent and by customer are methods that are listed as alternatives in the 20 AWWA M1 Manual, 7th Edition, pages 165 and 166 (Table IV.8-5). 11132023 Garden Grove Water Rate Study Model
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Cost of Service
Table B-10
City of Garden Grove Water Services Department
2023 Water Rate Study
Identification of Costs to be Included in Rate Tier Calculations FY 22/23 Applies to
Rate Tier Water Use in Local Imported
Costs Classified as Rate Tier Costs Costs Both Tiers Groundwater Water Conservation Which Tier Recovered From 1 O&M Other than PFAS O&M, City Admin, and Street Damages $1,261,260 $1,261,260 Propotional to Gro undwater Use in Each Tier 2 Water Use Objectives Compliance Cost $2,000,000 $2,000,000 Tier 2 Only 3 Projected Water Costs Propotional to Groundwater Use in Each Tier 4 PFAS O&M Costs $2,872,745 $2,872,745 Propotional to Gro undwater Use in Each Tier 5 Electricity $1,111,256 $1,111,256 Propotional to Gro undwater Use in Each Tier 6 Natural Gas $289,311 $289,311 Propotional to Gro undwater Use in Each Tier 7 WOCWB Shared Water Transmission Lines $47,208 $47,208 Propotional to Gro undwater Use in Each Tier 8 OCWD Replenishment Assessment $10,487,623 $10,487,623 Propotional to Gro undwater Use in Each Tier 9 MWD Tier 1 Treated Water $3,585,842 $3,585,842 Tier 2 Only 10 MWD Readiness to Serve Charge $541,486 $541,486 Tier 2 Only 11 MWD Capacity Charge $207,834 $207,834 Tier 2 Only
12 MWD Connection Charge $492,275 $492,275 Tier 2 Only
13 MWD Choice Programs $28,734 $28,734
14 OCWD Reimbursement ($166,293) ($166,293) Propotional to Gro undwater Use in Each Tier 15 Debt Service
16 Existing Revenue Bonds $260,505 $260,505 Propotional to Gro undwater Use in Each Tier 17 Capital Improvements $1,701,089 $1,701,089 Only CIP costs functionalized as Rate Tier (see Table B-1) 18 Remaining 2020A Bond Proceeds ($613,728) ($613,728) Propotional to Gro undwater Use in Each Tier 19 Capital Improvement Charge Revenues ($213,876) ($213,876) Propotional to Gro undwater Use in Each Tier 20 Less Change in Fund Balance ( $947,210) ($947,210) Propotional to Gro undwater Use in Each Tier 21 Portion of COSA-Classified as Base, MDD, PHD $8,307,139 $8,307,139 22 Total $31,253,200 $8,493,919 $15,903,110 $4,856,171 $2,000,000 Reapportionment of Costs Applicable to Water Use in ($8,493,919) $7,219,832 $1,274,088 All Tiers to Groundwater and Imported Water
(85% Groundwater, 15% Imported Water)
Total $31,253,200 $0 $23,122,942 $6,130,259 $2,000,000
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Misc Calcs
Table B-11
City of Garden Grove - Water Division
2022 Revenue Requirement Update
Supporting Calculations for Cost-of-Service Analysis

1. Package 3700 - Labor Functionalization
Rate Tier Public Fire FTE
Line Position Pumping Storage T&D Customer Meter Admin Calculation Protection Weighting Note 1 Water Production Group 25% 25% 50% 12.00 1
2 Water Engineering Group, Capital 9.6% 25.9% 41.4% 5.6% 5.6% 0.0% 9.0% 2.9% 3.50 2 3 Water Engineering Group, Operations 7.17% 8.40% 55.37% 12.25% 0.42% 0.00% 16.16% 0.22% 3.50 2 4 Customer Service Workers 100% 3.00
5 Meter Readers 100% 2.50
6 Remainder of Water Distribution Group 100% 21.50 3
7 Water Quality Group 70% 30% 4.00 4
8 Management 7.17% 8.40% 55.37% 12.25% 0.42% 0.00% 16.16% 0.22% 4.00 5 9 Total 7.17% 8.40% 55.37% 12.25% 0.42% 0.00% 16.16% 0.22% 54.00 10 11 Notes:
12 (1) Functionalized to 25% pumping, 25% storage, and 50% water production incorporated into the rate tier calculation. 13 (2) There are 7 engineering FTEs. Split 50/50 between water capital and water operations. Capital group functionlized per the CIP. Operations group functionalized by 14 a weighted average of all other operation FTEs.
15 (3) Verified with City staff in 2023 that there are 21.5 FTEs associated with the water distribution system. 16 (4) Responsible for water quality sampling and testing, and the City's backflow prevention program. Water quality sampling oc curs at the source of supply and in the distribution system. 17 (5) Functionalized based on a weighted average of all other operation FTEs. 18 11132023 Garden Grove Water Rate Study Model
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Misc Calcs
Table B-11
City of Garden Grove - Water Division
2022 Revenue Requirement Update
Supporting Calculations for Cost-of-Service Analysis
19 20 3. CY 2022 Average and Maximum Day Water Demand
21 22 Average Day Demand 21 MGD (used in the Water Master Plan to define the Capital Improvement Plan) 23 14,583 gpm
24 25 Maximum Day Demand/Average Day Ratio
26 MDD/ADD Peaking Factor (2) 1.30
27 28 Max Hour/Average Day Ratio
29 PHD/ADD Peaking Factor (2) 1.80
30 31 Notes:
32 (1) Source: Garden Grove 2020 Water Master Plan Update, Table ES-1. The average day demand differs from CY 2022 actual deman ds, but is the 33 demand used to analyze the water system and develop capital improvements. 34 (2) Source: Garden Grove 2020 Water Master Plan Update, Table ES-1. 35 36

4. Fire Protection Equivalents
37 38
39 FY 22/23 FY 22/23
40 Public Private Number of Equivalent Fire
41 Connection Demand Connections Connections Total Protection Connections 42 Size (in) Factor (1) (2) (2) Connections Public Private Total 43 0.75 1.00 00 0 000
44 1 1.00 00 0 000
45 1.5 2.90 03 3 099
46 2 6.19 02 6 26 0 161 161
47 3 17.98 03 3 05 45 4
48 4 38.32 0 114 114 0 4,368 4,368
49 6 111.31 4,000 262 4,262 445,244 29,163 474,407
50 8 237.21 0 177 177 0 41,986 41,986
51 10 426.58 01 0 10 0 4,266 4,266
52 12 689.04 00 0 000
53 Total 4,000 595 4,595 445,244 80,007 525,251
54 Notes:
55 (1) AWWA M1, page 152 (7th edition page 162); demand factor = diameter ^ 2.63; exponent based on Hazen-Williams equation for flow through 56 pressure conduits.
57 (2) Source: City staff via email, 7/03/23.
58 59
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Misc Calcs
Table B-11
City of Garden Grove - Water Division
2022 Revenue Requirement Update
Supporting Calculations for Cost-of-Service Analysis
60 5. Calculation: Fire Protection Demand (1), and Fire Protection Allocation for Supply, Storage, and T&D 61 Fire Demand (gpm) = 1020*sqrt(population) / (1-0.01*sqrt(population)) 62 where population is in thousands
63 Fire Protection Allocation = Fire Demand /(Fire Demand + Maximum Daily Demand) 64 65 Population for Garden Grove's Water Service Area = 171,183 (2) 66 Fire demand (gpm) = 11,599
67 Average Daily Demand ADD (mgd) = 21.00 (3) 68 Ratio of Max Day to Average Daily Demand = 1.30 (3) (4) 69 Maximum Daily Demand (mgd) = 27.30
70 Maximum Daily Demand (gpm) = 18,958
71 Therefore, Fire Protection Allocation = 38%
72 73 Fire Protection Allocation for COS 38%
74 Calculation notes:
75 (1) Calculation based on AWWA M1 7th edition, page 159. Calculation published by the American Insurance Association, 76 formerly National Fire Underwriters Association.
77 (2) Source: Department of Finance, State of California, population estimate 1/1/2023. https://dof.ca.gov/forecasting/demog raphics/estimates/e-5-population-and-housing-estimates-for-cities-counties-a 78 (3) See calculation above in this worksheet
79 (4) 2020 Water Master Plan Update, Page 7-3, indicates that the distribution system was analyzed at a condition of max day d emand plus fireflow demand. 80 81

6. Allocation of Storage to Average Day, Peak Day, and Fire Flow Components 82 83 Methodology: Page 8-18, September 2008 Water Master Plan. Average Day Demand from FY 15/16 is used in this analysis. 84 85 Operational Storage, 30% of Maximum Day Demand 6.82 2023 Water Master Plan Update, Table 7-5 (Existing System Analysis) 86 Fire Flow, 4 hours at 4,000 gpm 1.92
87 Emergency Storage, 100% of Average Day Demand 20.98
88 Additional Surplus Storage 23.28
89 Available Storage 53.00
90 91 Storage Cost Classification Avg Day Peak Day
92 Function of Reservoir Volume MG Demand Demand Fireflow Total 93 Operational Storage 6.82 100% 100%
94 Fire Fighting Storage 1.92 100% 100%
95 Emergency Storage 20.98 100% 100%
96 Remainder 23.28 100% 100%
97 Total 53.00 83.51% 12.87% 3.62% 100%
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Water Rate Study – Garden Grove Water Services Division

A-1
Garden Grove Water Rate Study Report 11132023
Appendix C: Rate Design

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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
Step 1. Projected Number of Customers by Meter Size
Current # of
Customers, Projected Number of Customers
Meter Size FY 22/23 (1) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Notes 1 5/8" X 3/4" meter 28,533 28,533 28,533 28,533 28,533 28,533 2 2 1" meter 3,826 3,826 3,826 3,826 3,826 3,826
3 1 1/2" meter 864 864 864 864 864 864
4 2" meter 729 729 729 729 729 729
5 3 " m e t e r 5 75 75 75 75 75 7
6 4" meter 125 125 125 125 125 125
7 6 " m e t e r 5 65 65 65 65 65 6
8 8 " m e t e r 222222
9 1 0 " M e t e r 000000
10 Total 34,192 34,192 34,192 34,192 34,192 34,192
11 12 Notes:
13 (1) Source: City staff 3/27/2023. Excludes fire service connections. See Table A-2 for additional details. 14 (2) Four connections with no reported meter size in City data are included in this analysis as having 5/8"x3/4" meters. 15 16
17 Step 2. Projected Number of Meter Equivalents by Meter Size 18 19 Meter
20 Projected Number of Meter Equivalents Capacity, Equivalent 21 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 gpm (1) Ratio (2) 22 5/8" X 3/4" meter 28,533 28,533 28,533 28,533 28,533 20 1.00 23 1" meter 9,565 9,565 9,565 9,565 9,565 50 2.50
24 1 1/2" meter 4,320 4,320 4,320 4,320 4,320 100 5.00
25 2" meter 5,832 5,832 5,832 5,832 5,832 160 8.00
26 3" meter 912 912 912 912 912 320 16.00
27 4" meter 3,125 3,125 3,125 3,125 3,125 500 25.00
28 6" meter 2,800 2,800 2,800 2,800 2,800 1,000 50.00
29 8" meter 160 160 160 160 160 1,600 80.00
3 0 1 0 " M e t e r 00000 2,400 120.00
31 Total 55,247 55,247 55,247 55,247 55,247
32 33
34 Notes:
35 (1) AWWA M1 Manual, Table B-2 (Seventh Edition).
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
36 (2) 5/8" X 3/4" meters are assigned a meter equivalent ratio of 1.0 by definition. Rounded to nearest 0.01. 37 38
39 Step 3. Calculate Proposed Bi-Monthly Capital Improvement Charges (Cost-of-Service Based Rates) 40 41 Step 3a. Define Capital Improvement Ch arge Revenue Requirement if Rate Increases Were In Effect for Full Fiscal Year 42 43 As Proposed (Effective for Last 4 Months in FY)
44 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
45 Capital Imp. Charge Revenues Under Existing Rates $2,320,206 $2,320,206 $2,320,206 $2,320,206 $2,320,206 46 Capital Imp. Charge Revenues from Rate Increases 49,498 201,159 362,526 534,222 678,248 47 Capital Imp. Charge Revenue Requirement $2,369,704 $2,521,365 $2,682,732 $2,854,428 $2,998,454 48 49 Full Year (Effective for Entire FY)
50 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
51 Capital Imp. Charge Revenues Under Existing Rates $2,320,206 $2,320,206 $2,320,206 $2,320,206 $2,320,206 52 Capital Imp. Charge Revenues from Rate Increases 148,494 306,491 474,598 653,468 727,810 53 Capital Imp. Charge Revenue Requirement $2,468,700 $2,626,697 $2,794,804 $2,973,674 $3,048,016 54 % Increase from Previous Year 6.40% 6.40% 6.40% 2.50% 55 56
57 Step 3b. Calculate Cost-of-Service Bi-Monthly Capital Improvement Charges 58 59 Current Proposed Capital Improvement Charge
60 Meter Size Charge 1/1/24 1/1/25 1/1/26 1/1/27 1/1/28 61 5/8" X 3/4" meter $7.00 $7.45 $7.92 $8.43 $8.97 $9.20 62 1" meter $17.50 $18.62 $19.81 $21.08 $22.43 $22.99
63 1 1/2" meter $35.00 $37.24 $39.62 $42.16 $44.85 $45.98 64 2" meter $56.00 $59.58 $63.39 $67.45 $71.77 $73.56
65 3" meter $112.00 $119.16 $126.79 $134.90 $143.53 $147.12 66 4" meter $175.00 $186.19 $198.10 $210.78 $224.27 $229.88 67 6" meter $350.00 $372.37 $396.21 $421.56 $448.54 $459.76 68 8" meter $560.00 $595.80 $633.93 $674.50 $717.67 $735.61 69 10" Meter $840.00 $893.70 $950.89 $1,011.75 $1,076.50 $1,103.41 70 Total
71 $1.064 $1.064 $1.064 $1.064 $1.025
72 11132023 Garden Grove Water Rate Study Model
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Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
73 Step 3c. Calculate Projected Bi-Monthly Capital Improvement Charge Revenues (Cost-of-Service Rates) 74 75 Projected Revenues, First 8 Months of FY
76 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 77 5/8 x 3/4" meter $798,924 $849,994 $904,394 $962,274 $1,023,861 78 1" meter 267,820 284,940 303,176 322,579 343,225
79 1 1/2" meter 120,960 128,692 136,928 145,692 155,016 80 2" meter 163,296 173,734 184,853 196,684 209,272
81 3" meter 25,536 27,168 28,907 30,757 32,726
82 4" meter 87,500 93,093 99,051 105,390 112,136
83 6" meter 78,400 83,412 88,750 94,430 100,473
84 8" meter 4,480 4,766 5,071 5,396 5,741
8 5 1 0 " m e t e r 00000
86 Subtotal $1,546,916 $1,645,800 $1,751,131 $1,863,203 $1,982,449 87 88
89 Projected Revenues, Last 4 Months of FY
90 Meter Size FY 21/22 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 91 5/8 x 3/4" meter $424,997 $452,197 $481,137 $511,930 $524,729 92 1" meter 142,470 151,588 161,290 171,612 175,903
93 1 1/2" meter 64,346 68,464 72,846 77,508 79,446
94 2" meter 86,867 92,427 98,342 104,636 107,252
95 3" meter 13,584 14,454 15,379 16,363 16,772
96 4" meter 46,547 49,526 52,695 56,068 57,469
97 6" meter 41,706 44,375 47,215 50,237 51,493
98 8" meter 2,383 2,536 2,698 2,871 2,942
9 9 1 0 " m e t e r 00000
100 Subtotal $822,900 $875,566 $931,601 $991,225 $1,016,005 101
102 Projected Revenues, Entire FY
103 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
104 Total Projected Revenues $2,369,816 $2,521,366 $2,682,733 $2,854,427 $2,998,455 105 Compare with Revenue Requirement $2,369,704 $2,521,365 $2,682,732 $2,854,428 $2,998,454 106
107
Step 4. Define Rate Revenue Requirement if Rate Increases Were In Effect for Full Fiscal Year 108
109 As Proposed (Effective for Last 4 Months in FY)
110 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
111 Rate Revenues Under Existing Rates $38,218,724 $38,218,724 $38,218,724 $38,218,724 $38,218,724 Excludes Capital Improvement Charge s, Low Water User Disc 112 Rate Revenues from Rate Increases 815,333 3,313,512 5,971,575 8,799,754 11,172,162 11132023 Garden Grove Water Rate Study Model
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
113 Rate Revenue Requirement $39,034,057 $41,532,236 $44,190,299 $47,018,478 $49,390,886 114
115 Full Year (Effective for Entire FY)
116 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
117 Rate Revenues Under Existing Rates $38,218,724 $38,218,724 $38,218,724 $38,218,724 $38,218,724 118 Rate Revenues from Rate Increases 2,445,999 5,048,540 7,817,645 10,763,972 11,988,540 119 Rate Revenue Requirement $40,664,723 $43,267,264 $46,036,369 $48,982,696 $50,207,264 120 % Increase from Previous Year 6.40% 6.40% 6.40% 2.50% 121
122 Note:
123 Rate Revenue Requirement in this Rate Design Section means the revenue requirement from the Bi-Monthly Service Charge, 124 Commodity Delivery Charges, and Fire Service Charges. 125
126
127
Step 5. Calculate Proposed Fire Service Rates (Cost-of-Service Based Rates) 128
129 Step 5a. Calculate FY 23/24 Unit Cost, $/Equivalent Fire Connection 130
131 Private Fire Protection Revenue Requirement FY 23/24 $596,514 See Table B-9 132 Number of Equivalent Private Fire Protection Connections 80,007 See Table B-9 133 FY 23/24 Unit Cost, $/Equivalent Connection per bi-monthly b illing period $1.24 A nnual $/Equivalent Connection Divided by 6; See Table B-9 134
135 Step 5b. Calculate Cost-of-Service Bi-Monthly Fire Service Rate 136
137
138 Connection Demand Current Proposed Bi-Monthly Fire Service Rate (1) 139 Size (in) Factor Rate 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 140 0.75 1.00 $1.24 $1.32 $1.40 $1.49 $1.53
141 1 1.00 $1.24 $1.32 $1.40 $1.49 $1.53
142 1.5 2.90 $2.99 $3.61 $3.84 $4.09 $4.35 $4.46
143 2 6.19 $6.38 $7.69 $8.18 $8.70 $9.26 $9.49
144 3 17.98 $18.55 $22.34 $23.77 $25.29 $26.91 $27.58
145 4 38.32 $39.51 $47.62 $50.67 $53.91 $57.36 $58.79
146 6 111.31 $114.76 $138.32 $147.17 $156.59 $166.61 $170.78 147 8 237.21 $244.55 $294.76 $313.62 $333.69 $355.05 $363.93 148 10 426.58 $439.79 $530.08 $564.01 $600.11 $638.52 $654.48 149
150 Note
151 (1) FY 23/24 rates are intended to collect the FY 23/24 Fire Protection Revenue Requirement if the rate were in effect for the entire Fiscal Year. 152 Rate increases in subsequent years are at the same percentage as the overall revenue requirement increase. 11132023 Garden Grove Water Rate Study Model
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
153
154 Step 5c. Calculate Projected Bi-Monthly Fire Service Rate Revenues (Cost-of-Service Rates) 155
156 No. of
157 Connection Fire Service
158 Meter Size Connections
159 1 1/2" meter 3
160 2" meter 26
161 3" meter 3
162 4" meter 114
163 6" meter 262
164 8" meter 177
165 10" meter 10
166
167 Projected Revenues, First 8 Months of FY
168 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 169 1 1/2" meter $36 $43 $46 $49 $52
170 2" meter 664 800 851 905 963
171 3" meter 223 268 285 303 323
172 4" meter 18,017 21,715 23,106 24,583 26,156
173 6" meter 120,268 144,959 154,234 164,106 174,607
174 8" meter 173,141 208,690 222,043 236,253 251,375
175 10" meter 17,592 21,203 22,560 24,004 25,541
176 Subtotal $329,940 $397,679 $423,125 $450,204 $479,018 177
178 Projected Revenues, Last 4 Months of FY
179 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 180 1 1/2" meter $22 $23 $25 $26 $27
181 2" meter 400 425 452 482 493
182 3" meter 134 143 152 161 165
183 4" meter 10,857 11,553 12,291 13,078 13,404
184 6" meter 72,480 77,117 82,053 87,304 89,489
185 8" meter 104,345 111,021 118,126 125,688 128,831
186 10" meter 10,602 11,280 12,002 12,770 13,090
187 Subtotal $198,839 $211,563 $225,102 $239,509 $245,499 188
189 Projected Revenues, Entire FY
190 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
191 Total Projected Revenues $528,779 $609,241 $648,227 $689,712 $724,517 192
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
193
194 Step 6. Calculate Revenue Requirement from Bi-Monthly Service Charge and Commodity Delivery Charge 195
196 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
197 Rate Revenue Requirement (Full Year $40,664,723 $43,267,264 $46,036,369 $48,982,696 $50,207,264 198 Implementation, See Step 4 Above)
199 Less Projected Fire Service Revenues (FullYrImpl) ($596,518) ($634,688) ($675,305) ($718,527) ($736,498) 200 Revenue Requirement from Bi-Monthly Minimum $40,068,206 $42,632,577 $45,361,064 $48,264,170 $49,470,766 201 Charge and Commodity Delivery Charge
202 (Full Year Implementation)
203
204
205
Step 7. Define Policy: % of Revenues from Bi-Monthly Minimum Charge 206 Methodology: thi s parameter is a user input, developed to even out increases in Bi-Monthly Minimum Charge and Commodity Del ivery Charges 207
208 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
209 % of Revenues from Bi-Monthly Minimum Charge 22.0% 23.0% 23.0% 23.0% 23.0% 210
211
212
Step 8. Calculate Bi-Monthly Minimum Charges (Cost-of-Service Based Rates) 213
214 Step 8a. Calculate Revenue Requirement from Bi-Monthly Minimum Charges 215
216 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
217 Revenue Requirement from Bi-Monthly Minimum $40,068,206 $42,632,577 $45,361,064 $48,264,170 $49,470,766 218 Charge and Commodity Delivery Charge
219 (Full Year Implenentation)
220 Times % of Revenues from Bi-Monthly Min. Chg. 22% 23% 23% 23% 23% 221 Revenue Requirement from Bi-Monthly Min. Chg. $8,815,005 $9,805,493 $10,433,045 $11,100,759 $11,378,276 222 (Full Year Implementation)
223
224 Step 8b. Define Costs Recovered on a Per Customer Basis and Identify per-Customer Component of Bi-Monthly Minimum Charge 225
226 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Notes
227 COSA Classification as Customer $4,475,054 $4,654,056 $4,840,219 $5,033,827 $5,033,827 1, 2 228 Number of Customers 34,192 34,192 34,192 34,192 34,192 229 Per-Customer Component of Bi-Monthly Min. Chg. $21.81 $22.69 $23.59 $24.54 $24.54 230
231 Notes:
232 (1) FY 23/24 from the Cost-of-Service Analysis. See Table B-8. Cost-of-Service Analysis is abbreviated as COSA in this works heet. 11132023 Garden Grove Water Rate Study Model
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
233 (2) Subsequent years: costs recovered on a per-customer basis increased by the rate of inflation as most of the customer cos ts increase with inflation. 234
235 Step 8c. Define Costs Recovered on a Per Meter Equivalent Basis and Identify per-Meter Equivalent Component of Bi-Monthly Minim um Charge 236
237 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Notes
238 Costs Recovered on a Per-Meter Equivalent Basis
239 COSA Classification as Meter Equivalent $2,400,127 $2,496,132 $2,595,978 $2,699,817 $2,699,817 1, 2 240 COSA Classified as MDD/PHD $3,339, 802 $3,473,394 $3,612,330 $3,756,823 $3,756,823 1, 2 241 Portion of COSA Classified as Base ($1,399,979) ($818,090) ($615,482) ($389,708) ($112,191) 1, 2, 3 242 Total $4,339,951 $5,151,436 $5,592,826 $6,066,932 $6,344,449 4 243
244 Number of Meter Equivalents 55,247 55,247 55,247 55,247 55,247 245
246 Per-Meter Eq. Component of Bi-Monthly Min. Chg. $13.09 $15.54 $16.87 $18.30 $19.14 247
248 Notes:
249 (1) FY 23/24 from the Cost-of-Service Analysis. See Table B-8. 250 (2) Subsequent years: costs recovered on a per-account basis increased by the rate of inflation as most of the customer cost s increase with inflation. 251 (3) The remainder of costs classified in the COSA as Base will be recovered through the Commodity Delivery Charge. 252 (4) The total cost recovered on a per-Meter Equivalent basis equals the Revenue Requirement from the Bi-Monthly Minimum Char ge minus the 253 costs recovered on a per-customer basis.
254
255 Step 8.d. Calculate Proposed Bi-Monthly Minimum Charge (Cost-of-Service Rates) 256
257 Proposed Bi-Monthly Minimum Charge (1)
258 Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 259 Per-Customer Component $21.81 $22.69 $23.59 $24.54 $24.54 260
261 Per-Meter Equivalent Component
262 5/8 x 3/4" meter $13.09 $15.54 $16.87 $18.30 $19.14 263 1" meter $32.73 $38.85 $42.18 $45.76 $47.85
264 1 1/2" meter $65.46 $77.70 $84.36 $91.51 $95.70
265 2" meter $104.74 $124.32 $134.98 $146.42 $153.12
266 3" meter $209.48 $248.65 $269.95 $292.84 $306.23
267 4" meter $327.31 $388.52 $421.80 $457.56 $478.49
268 6" meter $654.63 $777.03 $843.61 $915.12 $956.98
269 8" meter $1,047.41 $1,243.25 $1,349.77 $1,464.20 $1,531.17 270 10" meter $1,571.11 $1,864.87 $2,024.66 $2,196.29 $2,296.76 271
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
272 Proposed Bi-Monthly Minimum Charge (Cost-of-Service Rates) 273 5/8 x 3/4" meter $33.85 $34.91 $38.23 $40.47 $42.84 $43.68 274 1" meter $50.48 $54.54 $61.54 $65.77 $70.29 $72.39
275 1 1/2" meter $78.20 $87.28 $100.39 $107.95 $116.05 $120.24 276 2" meter $111.45 $126.55 $147.01 $158.57 $170.96 $177.65 277 3" meter $200.15 $231.29 $271.34 $293.55 $317.38 $330.77 278 4" meter $299.92 $349.13 $411.20 $445.40 $482.10 $503.03 279 6" meter $577.08 $676.44 $799.72 $867.20 $939.66 $981.52 280 8" meter $909.67 $1,069.22 $1,265.94 $1,373.37 $1,488.73 $1,555.71 281 10" meter $1,353.12 $1,592.92 $1,887.56 $2,048.26 $2,220.83 $2,321.29 282
283
284 Calculation of Proposed Bi-Monthly Minimum Charge Revenues, First Eight Months of FY 285 5/8 x 3/4" meter $3,863,368 $3,983,883 $4,362,869 $4,618,410 $4,889,359 286 1" meter $772,546 $834,753 $941,769 $1,006,602 $1,075,767 287 1 1/2" meter $270,259 $301,627 $346,944 $373,090 $401,066 288 2" meter $324,988 $369,031 $428,684 $462,393 $498,510 289 3" meter $45,634 $52,735 $61,865 $66,929 $72,362
290 4" meter $149,960 $174,564 $205,601 $222,699 $241,049 291 6" meter $129,266 $151,523 $179,137 $194,253 $210,484 292 8" meter $7,277 $8,554 $10,127 $10,987 $11,910
2 9 3 1 0 " m e t e r $ 0$ 0$ 0$ 0$ 0
294 Total $5,563,299 $5,876,670 $6,536,995 $6,955,363 $7,400,506 295
296 Calculation of Proposed Bi-Monthly Minimum Charge Revenues, Last Four Months of FY 297 5/8 x 3/4" meter $1,991,942 $2,181,434 $2,309,205 $2,444,679 $2,492,455 298 1" meter $417,377 $470,885 $503,301 $537,883 $553,899 299 1 1/2" meter $150,813 $173,472 $186,545 $200,533 $207,767 300 2" meter $184,516 $214,342 $231,196 $249,255 $259,020 301 3" meter $26,368 $30,932 $33,465 $36,181 $37,708
302 4" meter $87,282 $102,800 $111,349 $120,525 $125,757 303 6" meter $75,761 $89,568 $97,127 $105,242 $109,930
304 8" meter $4,277 $5,064 $5,493 $5,955 $6,223
3 0 5 1 0 " m e t e r $ 0$ 0$ 0$ 0$ 0
306 Total $2,938,335 $3,268,498 $3,477,682 $3,700,253 $3,792,759 307
308 Total Proposed Bi-Monthly Minimum Charge Revenues $8,501,634 $9,145,168 $10,014,677 $10,655,616 $11,193,265 309 (Cost-of-Service Rates)
310
311 Bi-Monthly Minimum Charge Rev Req $8,471,161 $9,412,289 $10,014,677 $10,655,616 $11,193,265 11132023 Garden Grove Water Rate Study Model
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
312
313 Difference: Rev Req Minus Projected Revenues ($30,473) $267,121 $0 $0 $0 314
315
Step 9. Define Costs to be Recovered from Commodity Delivery Charges 316
317
318 Revenue Req. from Commodity Delivery Charges FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 319 Rate Revenue Requirement (Full Year $40,664,723 $43,267,264 $46,036,369 $48,982,696 $50,207,264 320 Implementation, See Step 4 Above)
321 Less Projected Fire Service Revenues (FullYrImpl) (596,518) (634,688) (675,305) (718,527) (736,498) 322 Less Bi-Monthly Min. Chg. Rev (FullYrImpl) (8,815,005) (9,805,493) (10,433,045) (11,100,759) (11,378,276) 323 Revenue Requirement from Commodity Delivery $31,253,200 $32,827,084 $34,928,019 $37,163,411 $38,092,490 324 Charges (Full Year Implementation)
325
326
327
Step 10. Calculate Commodity Delivery Charges (Cost-of-Service Based Rates) 328
329 Step 10a. Define Water Supply Sources for Water Sold in Tiers 1 and 2 330
331 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
332 Projected Tier 1 Consumption, ccf/year
333 July - Feb 4,073,457 4,073,457 4,073,457 4,073,457 4,073,457 334 Mar - June 1,818,150 1,818,150 1,818,150 1,818,150 1,818,150 335 Total 5,891,606 5,891,606 5,891,606 5,891,606 5,891,606 73.54% 336
337 Projected Tier 2 Consumption, ccf/year
338 July - Feb 1,465,342 1,465,342 1,465,342 1,465,342 1,465,342 339 Mar - June 654,042 654,042 654,042 654,042 654,042
340 Total 2,119,384 2,119,384 2,119,384 2,119,384 2,119,384 26.46% 341
342 Projected Sources of Tier 2 Water, ccf/year
343 Imported Water 1,201,649 1,201,649 1,201,649 1,201,649 1,201,649 56.7% 344 Local Groundwater 917,735 917,735 917,735 917,735 917,735 43.3% 345
346 Amount of Local Groundwater Prodcution Sold in Each Tier 347 Tier 1 4,973,871 4,973,871 4,973,871 4,973,871 4,973,871 348 Tier 2 917,735 917,735 917,735 917,735 917,735
349 Total 5,891,606 5,891,606 5,891,606 5,891,606 5,891,606 350
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
351 Percent of Local Groundwater Production Sold in Each Tier 352 Tier 1 84.4% 84.4% 84.4% 84.4% 84.4%
353 Tier 2 15.6% 15.6% 15.6% 15.6% 15.6%
354 Total 100.0% 100.0% 100.0% 100.0% 100.0%
355
356 Costs to Be Recovered in Tier 1 (Full Yr Implementation) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 357 Total Revenue Req. from Commodity Delivery Chgs. $31,253,200 $32,827,084 $34,928,019 $37,163,411 $38,092,490 358 Less Costs Recovered from Tier 2 (11,732,118) (12,020,307) (12,375,536) (12,752,408) (12,926,513) 359 Costs Recovered from Tier 1 $19,521,082 $20,806,777 $22,552,484 $24,411,003 $25,165,978 360
361
362
363 Costs to Be Recovered in Tier 2 (Full Yr Implementation) FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 Notes 364 MWD Tier 1 Treated Water $3,585,842 $3,585,842 $3,585,842 $3,585,842 $3,585,842 1, 2 365 MWD Readiness to Serve Charge 541,486 541,486 541,486 541,486 541,486 1, 2 366 MWD Capacity Charge 207,834 207,834 207,834 207,834 207,834 1, 2 367 MWD Connection Charge 492,275 492,275 492,275 492,275 492,275 1, 2 368 MWD Choice Programs 28,734 28,734 28,734 28,734 28,734 1, 2 369 Water Use Objectives Compliance Cost 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 1, 2 370 Plus Portion of Costs Applicable to All Water Use 1,274,088 1,325,051 1,358,178 1,392,132 1,426,935 1, 3 371 Portion of Costs Applicable to Groundwater 3, 601,859 3,839,085 4,161,187 4,504,105 4,643,406 1, 4 372 Costs Recovered from Tier 2 $11,732,118 $12,020,307 $12,375,536 $12,752,408 $12,926,513 373
374
375 Total Costs Recovered from Tiers 1 and 2 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 376 Costs Recovered from Tiers 1 and 2 $31,253,200 $32,827,084 $34,928,019 $37,163,411 $38,092,490 Full Year Implementation 377 Math Check $31,253,200 $32,827,084 $34,928,019 $37,163,411 $38,092,490 378 Math Check: Costs Applicable to Groundwater $3, 601,859 379
380 Notes:
381 (1) See Table B-10 and the Operating Statement in Table A-10. 382 (2) MWD costs remain at FY 23/24 values. Future increases recovered through future pass-through adjustments 383 (3) As showin in Table B-10, some costs are applicable to all water use. 15% of these costs are allocated to Tier 2, corresp onding to the percentage of imported water. 384 (4) Costs associated with groundwater, times the percent of loca l groundwater that is sold in Tier 2. Also accounts for full-year implementation effect in calculating Tier 2 rates. 385
386 Step 10.b. Calculation of Proposed Tier 1 Commodity Delivery Charge (Cost-of-Service Rates) 387
388 Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 389 Total Tier 1 Costs $19,521,082 $20,806,777 $22,552,484 $24,411,003 $25,165,978 390 Tier 1 ccf/year 5,891,606 5,891,606 5,891,606 5,891,606 5,891,606 11132023 Garden Grove Water Rate Study Model
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Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
391 Tier 1 Commodity Delivery Charge, $/cc f $3.26 $3.31 $3.53 $3.83 $4.14 $4.27 392
393 Step 10.c. Calculation of Proposed Tier 2 Commodity Delivery Charge (Cost-of-Service Rates) 394
395 Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 396 Total Tier 2 Costs $11,732,118 $12,020,307 $12,375,536 $12,752,408 $12,926,513 397 Tier 2 ccf/year 2,119,384 2,119,384 2,119,384 2,119,384 2,119,384 398 Tier 2 Commodity Delivery Charge, $/cc
f $4.80 $5.54 $5.67 $5.84 $6.02 $6.10
399
400
401 Step 10.d. Calculation of Projected Commodity De livery Charge Revenues (Cost-of-Service Rates) 402
403 Projected Revenues, First 8 Months of FY
404 Tier FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
405 Tier 1 $13,279,469 $13,483,141 $14,379,302 $15,601,339 $16,864,110 406 Tier 2 7,033,641 8,117,994 8,308,488 8,557,597 8,821,358 407 Subtotal $20,313,110 $21,601,135 $22,687,790 $24,158,935 $25,685,468 408
409 Projected Revenues, Last 4 Months of FY
410 Tier FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
411 Tier 1 $6,018,076 $6,418,068 $6,963,513 $7,527,140 $7,763,499 412 Tier 2 3,623,392 3,708,417 3,819,604 3,937,332 3,989,655 413 Subtotal $9,641,467 $10,126,486 $10,783,118 $11,464,471 $11,753,154 414
415 Projected Revenues, Entire FY
416 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
417 Total Projected Revenues $29,954,577 $31,727,621 $33,470,908 $35,623,407 $37,438,623 418
419 Compare with Revenue Requirement $30,034,117 $31,510,706 $33,527,396 $35,673,150 $37,473,104 420 Difference: Rev Req Minus Projected Revenues ($79,540) $216,914 ($56,488) ($49,743) ($34,482) -0.09% 421
422
Step 11. Calculate Commodity Delivery Charges (Proposed Rates with Rate Transitioning) 423
424 Goal: Smoother Transition for Tier 2 Commodity Delivery Charge effective 1/1/24. 425 Methodology:
426 1. Adjust the Tier 1 Charge Effective 1/1/24 is approximately the average of the current and 1/1/25 cost-of-service rate. 427 2. Calculate Additional Revenues Received in FY 23/24 and FY 24/25 from Adjusted Tier 1 Charge 428 3. Reduce Tier 2 Revenues Based on the Additional Revenues Received from Adjusted 1/1/24 Tier 1 Charge 429 4. Calculate Adjusted Tier 2 Commodity Delivery Charges for FY 23/24 430
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FINAL
Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
431 Step 11.1. Summary of Current and Proposed Commodity Delivery Charge 432
433 Current 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 434 Cost-of-Service Based Rates
435 Tier 1 $3.26 $3.31 $3.53 $3.83 $4.14 $4.27
436 Tier 2 $4.80 $5.54 $5.67 $5.84 $6.02 $6.10
437
438 Proposed Rates
439 Tier 1 $3.26 $3.40 $3.53 $3.83 $4.14 $4.27
440 Tier 2 $4.80 $5.29 $5.67 $5.84 $6.02 $6.10
441
442
443 Step 11.2. Calculate Additional Revenue from 1/1/24 Tier 1 Commodity Delivery Charge 444
445 Increase in 1/1/24 Tier 1 Commodity Delivery Charge, $/kgal $0.09 446 Annual Tier 2 ccf during time when 1/1/24 Tier 1 charge is in effect 5, 891,606 447 Increase in revenue from 1/1/24 Tier 1 Charge $530,245 448
449 Step 11.3. Calculate Adjusted 1/1/24 Tier 2 Commodity Delivery Charge 450
451 Annual Tier 2 ccf during time when 1/1/24 Tier 1 charge is in effect 2, 119,384 452 Decrease in 1/1/24 Tier 2 Commodity Delivery Charge, $/cc f
453 Not rounded $0. 2502
454 Rounded $0.25
455
456
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FINAL
Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
457 Step 12. Calculate Fire Service Charges (P roposed Charges with Rate Transitioning) 458
459 Goal: Smoother Transition for Fire Service Charges effective 1/1/24. 460 Methodology:
461 1. Adjust Fire Service Charges Effective 1/1/24. The rate effective 1/1/24 is the average of the current rate and the 1/1/25 cost-of-service rate. 462 2. Calculate Reduced Revenues from Adjusted Fire Service Charges 463 3. In Step 12, Recover This Reduced Revenue from Revised Bi-Monthly Minimum Charges. 464
465 Step 12.1. Adjusted Fire Service Charges Effective 1/1/24 466
467 Connection Current Proposed Bi-Monthly Fire Service Charge 468 Size (in) Rate 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 469 0.75 $1.24 $1.32 $1.40 $1.49 $1.53
470 1.00 $1.24 $1.32 $1.40 $1.49 $1.53
471 1.50 $2.99 $3.42 $3.84 $4.09 $4.35 $4.46
472 2.00 $6.38 $7.28 $8.18 $8.70 $9.26 $9.49
473 3.00 $18.55 $21.16 $23.77 $25.29 $26.91 $27.58
474 4.00 $39.51 $45.09 $50.67 $53.91 $57.36 $58.79
475 6.00 $114.76 $130.97 $147.17 $156.59 $166.61 $170.78 476 8.00 $244.55 $279.09 $313.62 $333.69 $355.05 $363.93 477 10.00 $439.79 $501.90 $564.01 $600.11 $638.52 $654.48 478
479
480 Step 12.2. Calculate Reduced Revenues from Adjusted Fire Service Charges Effective 1/1/24 481
482 1/1/2024 1/1/2024 Annual
483 Connection Number o
f Cost-of-Service Adjusted Revenue
484 Size (in) Connections Charge Charge Change Decrease 485 0.75 $1.24 $1.24 $0.00 $0.00
486 1.00 $1.24 $1.24 $0.00 $0.00
487 1.50 3 $3.61 $3.42 $0.19 $3.42
488 2.00 26 $7.69 $7.28 $0.41 $63.96
489 3.00 3 $22.34 $21.16 $1.18 $21.24
490 4.00 114 $47.62 $45.09 $2.53 $1,730.52
491 6.00 262 $138.32 $130.97 $7.35 $11,554.20
492 8.00 177 $294.76 $279.09 $15.67 $16,641.54
493 10.00 10 $530.08 $501.90 $28.18 $1,690.80
494 Total $31,705.68
495
496
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FINAL
Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
497 Step 13. Calculate Bi-Monthly Minimum Charges (Proposed Rates with Rate Transitioning) 498
499 Goal: Smoother Transition for Bi-Monthly Minimum Charges Effective 1/1/24. 500 Methodology:
501 1. Adjust Bi-Monthly Minimum Charges Effective 1/1/24. The rate effective 1/1/24 is the average of the current rate and the 1/1/25 cost-of-service rate. 502 For all meters except 5/8 x 3/4" meter, the 1/1/24 charge will be the average of the current charge and the 1/1/25 charge. 503 The 1/1/25 charge for 5/8 x 3/4" meter will be calculated to be revenue neutral, collecting additional revenue equal to the 504 decreased revenues from the adjusted Bi-Monthly Minimum Charges and Fire Service Rates. 505 2. Calculate Reduced Revenues from Adjusted Bi-Monthly Minimum Charges 506 3. Recover This Reduced Revenue from Revised Bi-Monthly Minimum Charges from 5/8 x 3/4" meters. 507
508 Step 13.1. Adjusted Bi-Monthly Minimum Charges Effective 1/1/24 509
510 Connection Current Proposed Bi-Monthly Minimum Charge 511 Size (in) Rate 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 512 5/8 x 3/4" meter $33.85 $35.10 $38.23 $40.47 $42.84 $43.68 513 1" meter $50.48 $54.54 $61.54 $65.77 $70.29 $72.39
514 1 1/2" meter $78.20 $87.28 $100.39 $107.95 $116.05 $120.24 515 2" meter $111.45 $126.55 $147.01 $158.57 $170.96 $177.65 516 3" meter $200.15 $231.29 $271.34 $293.55 $317.38 $330.77 517 4" meter $299.92 $349.13 $411.20 $445.40 $482.10 $503.03 518 6" meter $577.08 $676.44 $799.72 $867.20 $939.66 $981.52 519 8" meter $909.67 $1,069.22 $1,265.94 $1,373.37 $1,488.73 $1,555.71 520 10" meter $1,353.12 $1,592.92 $1,887.56 $2,048.26 $2,220.83 $2,321.29 521
522
523 Step 13.2. Calculate Reduced Revenues from Bi-Monthly Minimum Charges Effective 1/1/24 for All Meter Sizes Except 5/8x3/4" 524
525 1/1/2024 1/1/2024 Annual
526 Connection Number o
f Cost-of-Service Adjusted Revenue
527 Size (in) Connections Charge Charge Change Decrease 528 5/8 x 3/4" meter 28,533
529 1" meter 3,826 $54.54 $54.54 $0.00 $0.00
530 1 1/2" meter 864 $87.28 $87.28 $0.00 $0.00
531 2" meter 729 $126.55 $126.55 $0.00 $0.00
532 3" meter 57 $231.29 $231.29 $0.00 $0.00
533 4" meter 125 $349.13 $349.13 $0.00 $0.00
534 6" meter 56 $676.44 $676.44 $0.00 $0.00
535 8" meter 2 $1,069.22 $1,069.22 $0.00 $0.00
536 10" meter 0 $1,592.92 $1,592.92 $0.00 $0.00
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FINAL
Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
537 Total $0.00
538
539 Step 13.3. Calculate Additional Reve nue to be Recovered from Adjusted 5/8x3/4" Bi-Monthly Minimum Charge 540
541 Adjustment Amount
542 Fire Service Charge Adjustment $31,705.68
543 Bi-Monthly Minimum Charge (1" and Larger Meters) Adjustment $0.00 544 Total $31,705.68
545
546 Step 13.4. Calculated Adjusted 5/8x3/4" Bi-Monthly Minimum Charge for 1/1/24 547
548 Additional Revenue Required $31,705.68
549 Number of Connections 28,533
550 Change in Bi-Monthly Minimum Charge $0.19
551
552 Cost-of Service 5/8x3/4" Bi-Monthly Minimum Charge Effective 1/1/24 $34.91 553 Adjustment $0.19
554 Proposed 5/8x3/4" Bi-Monthly Minimum Charge Effective 1/1/24 $35.10 555
556
557
Step 14. Calculation of Revenues Under Cost-of-Service Rates and Under Proposed Rates 558
559 Step 14.1 Projected Bi-Monthly Service Charge Revenue, Proposed Rates 560 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
561 5/8 x 3/4" meter $5,866,152 $6,187,003 $6,672,074 $7,063,090 $7,381,814 562 1" meter $1,189,923 $1,305,638 $1,445,070 $1,544,486 $1,629,666 563 1 1/2" meter $421,072 $475,099 $533,489 $573,623 $608,833 564 2" meter $509,504 $583,373 $659,880 $711,647 $757,529 565 3" meter $72,002 $83,667 $95,329 $103,110 $110,070
566 4" meter $237,242 $277,364 $316,950 $343,224 $366,806 567 6" meter $205,027 $241,091 $276,263 $299,495 $320,414 568 8" meter $11,554 $13,617 $15,621 $16,942 $18,133
5 6 9 1 0 " m e t e r $ 0$ 0$ 0$ 0$ 0
570 Total $8,512,477 $9,166,853 $10,014,677 $10,655,616 $11,193,265 571
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FINAL
Rate Design
Table C-1
City of Garden Grove Water Services Department
2023 Water Rate Study
Rate Design Calculations
572 Step 14.2. Projected Commodity Delivery Charge Revenues, Proposed Rates 573
574 Projected Revenues, First 8 Months of FY
575 Tier FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
576 Tier 1 $13,279,469 $13,849,752 $14,379,302 $15,601,339 $16,864,110 577 Tier 2 7,033,641 7,751,659 8,308,488 8,557,597 8,821,358 578 Subtotal $20,313,110 $21,601,411 $22,687,790 $24,158,935 $25,685,468 579
580 Projected Revenues, Last 4 Months of FY
581 Tier FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
582 Tier 1 $6,181,709 $6,418,068 $6,963,513 $7,527,140 $7,763,499 583 Tier 2 3,459,881 3,708,417 3,819,604 3,937,332 3,989,655 584 Subtotal $9,641,590 $10,126,486 $10,783,118 $11,464,471 $11,753,154 585
586 Projected Revenues, Entire FY
587 FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28
588 Total Projected Revenues $29,954,700 $31,727,897 $33,470,908 $35,623,407 $37,438,623 589
590 Step 14.3. Projected Fire Service Charge Revenues, Proposed Rates 591
592 Projected Revenues, First 8 Months of FY
593 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 594 1 1/2" meter $36 $41 $46 $49 $52
595 2" meter $664 $757 $851 $905 $963
596 3" meter $223 $254 $285 $303 $323
597 4" meter $18,017 $20,561 $23,106 $24,583 $26,156
598 6" meter $120,268 $137,257 $154,234 $164,106 $174,607 599 8" meter $173,141 $197,596 $222,043 $236,253 $251,375 600 10" meter $17,592 $20,076 $22,560 $24,004 $25,541
601 Subtotal $329,940 $376,541 $423,125 $450,204 $479,018 602
603 Projected Revenues, Last 4 Months of FY
604 Meter Size FY 23/24 FY 24/25 FY 25/26 FY 26/27 FY 27/28 605 1 1/2" meter $21 $23 $25 $26 $27
606 2" meter $379 $425 $452 $482 $493
607 3" meter $127 $143 $152 $161 $165
608 4" meter $10,281 $11,553 $12,291 $13,078 $13,404
609 6" meter $68,628 $77,117 $82,053 $87,304 $89,489
610 8" meter $98,798 $111,021 $118,126 $125,688 $128,831 611 10" meter $10,038 $11,280 $12,002 $12,770 $13,090
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Garden Grove City CouncilNovember 28, 2023

Garden Grove City Council
November 28, 2023