City of Greenfield
599 El Camino Real
Greenfield, CA 93927
City Council Meeting Special Agenda
September 15, 2025
6:00 P.M.
Mayor Robert White
Mayor Pro-tem Ariana Rodriguez
Councilmembers
Rachel Ortiz
Marcy Jones
Belen Garcia
The Greenfield City Council special meeting on September 15, 2025 at 6:00 p.m. will be held in the City Council Chambers located at 599 El Camino Real, Greenfield, California 93927, and will be open to the public. This meeting will also be accessible online and may be viewed through the following options:
Facebook Live: https://www.facebook.com/GreenfieldCA/
Join Zoom Meeting: http://meeting.ci.greenfield.ca.us
Meeting ID: 844 8164 8935
PLEASE TURN OFF CELL PHONES.
A. CALL TO ORDER
B. ROLL CALL – CITY COUNCIL
C. PLEDGE OF ALLEGIANCE
D. AGENDA REVIEW
City Council Agenda
September 15, 2025
E. CITY COUNCIL WORKSHOP
E-1. REVIEW AND DISCUSSION of the Proposed Sewer Rate Increase a. Report
b. Public Comments
c. City Council Comments / Review
F. ADJOURNMENT
In compliance with the American with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk at (831) 674-5591. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting (CFR 35.102-35.104 ADA Title II). ********************************************************************************* This agenda is duly posted outside City Hall and on the City of Greenfield web site.
Sewer Rate and Fee Study
City of Greenfield
Financial Plan Discussion
Need funding for WWTP project (Est. Plant completed in FY 2029) Must maintain payments as well as 1.2 x debt service coverage ratio Future PAYGO CIP based on average expense over 5 years Operating Expenses expected to increase around 4.1% per year ◦ Additional operating expenses will come online in FY 2029 to manage WWTP Current sewer fund balance is projected to be $0
Status quo financial plan (rate study) includes a rate increases of: 15% in FY 2026 (implemented July 1), 15% in FY 2027, and 5% in FY 2028 Reserve contributions based on annual depreciation
◦ Capital Reserve - 2% of current assets ~$343k and 2% of plant hard costs ~$1.3 million ◦ Operating Reserve – 4 months of operating expenses
Rate Options
◦ Option 1 Include $75 million State grant
◦ Option 2 Includes no grant funding (private debt issued for balance) Debt Service
SRF Loan
◦ 30-year repayment
◦ 2.1% interest
◦ Payments begin when project completed (FY 2029)
◦ 1.2 x Debt Service Coverage Ratio
Private Loan
◦ 35-year repayment
◦ 4.25% interest
◦ Payments begin immediately (FY 2027)
◦ 1.2 x Debt Service Coverage Ratio
Proposed Rates
Rate Category Current
January
2026 July 2026 July 2027 July 2028 July 2029
Current Rates
Service Charge $5.14 $5.91 $6.20
Unit Charge $58.22 $66.95 $70.30
Proposed Rates – Option 1
Fixed Charge $34.99 $36.74 $38.58 $40.51 $42.13
Variable Charge (per
1,000 gallons) $11.25 $11.81 $12.40 $13.02 $13.54
Proposed Rates – Option 2
Fixed Charge $34.99 $43.74 $52.49 $62.98 $75.58
Variable Charge (per
1,000 gallons) $11.25 $14.06 $16.87 $20.24 $24.29
Rate Impacts (SFR)
$63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $34.99
$46.24
$57.48
$68.73
$79.97
$91.22 $91.22 $91.22 $91.22 $91.22 $91.22
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
0 1 2 3 4 5 6 7 8 9 10
Current Proposed Water Use (1,000 gallons)
Rate Impacts (Non-SFR, 3 Units)
$179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $34.99
$91.22
$147.45
$203.67
$259.90
$316.13
$372.36
$428.58
$484.81
$541.04
$597.27
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
0 5 10 15 20 25 30 35 40 45 50
Water Use Current Proposed
Local Comparison
Capacity Charge - Overview
What is a Capacity Charge?
One-time fee
Paid by a new customer
Paid for system capacity
The Ultimate Goal
Equity between the system’s current
customers and future customers
Method
Buy-in Method – new customers
reimburse current customers
Incremental Cost Method – “growth
pays for growth”
*Hybrid/Combined Method – capacity
in current assets but need to expand
for future growth (this will be the
method used for this study)
Capacity Charge Comparison – Standard
Residential Unit
Category Cost
Current Fee $3,574
Proposed Fee* $7,286
Difference $3,712
*Proposed fee to be applied to new customers based on engineering estimate of sewer flow in a ratio to 60,000 gallons per year Questions?
CITY OF GREENFIELD 2025
Sewer Rate and Fee Study
DRAFT REPORT
August 27, 2025
CITY OF GREENFIELD
2025 SEWER RATE AND FEE STUDY
DRAFT REPORT
Prepared for:
City of Greenfield
599 El Camino Real
Greenfield, CA 93927
Prepared by:
ROBERT D. NIEHAUS, INC.
140 East Carrillo Street
Santa Barbara, CA 93101
(805) 962-0611
RDN Project Number 389
August 27, 2025
Ms. Jamie Tugel
Deputy Director of Public Works
City of Greenfield
599 El Camino Real
Greenfield, CA 93927
Subject: 2025 Sewer Rate and Fee Study
Dear Ms. Tugel,
Robert D. Niehaus, Inc. is pleased to provide this 2025 Sewer Rate and Fee Study (Study) report to the City of Greenfield. This Study includes a financial plan to determine the revenue requirements for the next five years and a comprehensive review of the City’s current rates based on the cost-of-service principles. We developed proposed rates for the next five years closely following Proposition 218 (Prop 218) requirements. Capacity Charges were designed to align with the Fee Mitigation Act AB 1600, or Government Code 66000 through 66018. This report outlines the approach, methodology, findings, and recommendations of the Study. The Study also includes a customer billing impact study. Each of the Study components has enhanced the defensibility and equitability of the proposed rates.
RDN utilized the City’s billing records, accounting, operating and management records, capital plan, master planning documents, and reserve policies. Based on the City provided data, key assumptions were made for the Study using appropriate resources and our econometric and finance expertise. We are confident that the rates and fees proposed in this report are cost-based and are fully compliant with Prop 218, Prop 26, and other legal requirements.
It has been an absolute pleasure and honor to work with your City. We thank you, Mr. Paul Wood, Mr. Tony Nisich, Mr. Curtis Weeks, and the City Council for the support provided during this Study.
Respectfully submitted,
Robert D. Niehaus, Ph.D. Anthony Elowsky, M.A.
Managing Director/Principal Economist Project Manager
i
City of Greenfield – 2025 Sewer Rate and Fee Study
TABLE OF CONTENTS
TABLE OF CONTENTS...................................................................................................................................... i LIST OF TABLES ..............................................................................................................................................ii LIST OF FIGURES............................................................................................................................................iv EXECUTIVE SUMMARY ...................................................................................................................................6 Study Overview.......................................................................................................................................................6 Summary of Recommendations.............................................................................................................................6 Current Rates......................................................................................................................................................7 Proposed Rates...................................................................................................................................................8 Capacity Charges ................................................................................................................................................9 1 INTRODUCTION....................................................................................................................................10
1.1 Methodology ........................................................................................................................................... 11 Buy-in Method................................................................................................................................................. 12 Incremental Cost Method ............................................................................................................................... 12 Combined Approach........................................................................................................................................ 13
1.2 Legal Framework ..................................................................................................................................... 13 California Constitution‐Article XIII C (Proposition 26)..................................................................................... 13 California Constitution‐Article XIII D, Section 6 (Proposition 218).................................................................. 14
1.3 Key Assumptions ..................................................................................................................................... 15 Escalation Factors............................................................................................................................................ 15 Asset Values..................................................................................................................................................... 16 2 FINANCIAL PLAN...................................................................................................................................18
2.1 Status Quo Rate Increases....................................................................................................................... 18
2.2 Billing Units.............................................................................................................................................. 18
2.3 Revenues ................................................................................................................................................. 19
2.4 Operating and Maintenance (O&M) Expense ......................................................................................... 19
2.5 Capital Improvement Projects................................................................................................................. 20
2.6 Debt Service............................................................................................................................................. 20
2.7 Proposed Reserve Policy ......................................................................................................................... 20
2.8 Status Quo Financial Proforma................................................................................................................ 20
2.9 Proposed Wastewater Treatment Plant.................................................................................................. 22
2.10 Reserve Contributions and Target........................................................................................................... 26
2.11 Proposed Option 1 Financial Plan Proforma ........................................................................................... 26 ii
City of Greenfield – 2025 Sewer Rate and Fee Study
2.12 Proposed Option 2 Financial Plan Proforma ........................................................................................... 29
2.13 Revenue Requirements........................................................................................................................... 31 3 COST OF SERVICE ANALYSIS ..................................................................................................................32
3.1 Functionalization of Costs ....................................................................................................................... 32 4 RATE DESIGN........................................................................................................................................35
4.1 Fixed Rate Derivation .............................................................................................................................. 35
4.2 Variable Rate Derivation.......................................................................................................................... 36
4.3 Bill Impacts .............................................................................................................................................. 38 Customers Bill Impact...................................................................................................................................... 38 5 Proposed Sewer Capactiy Charges.........................................................................................................40
5.1 System Demand....................................................................................................................................... 40
5.2 System Valuation..................................................................................................................................... 40
5.3 Buy-in Fee Calculation ............................................................................................................................. 41
5.4 Future Demand........................................................................................................................................ 41
5.5 Capital Improvement Plan....................................................................................................................... 41
5.6 Incremental Fee Calculation.................................................................................................................... 42 6 Conclusion............................................................................................................................................44 Proposed Sewer Rates..................................................................................................................................... 44 Proposed Capacity Charges............................................................................................................................. 45
LIST OF TABLES
Table 1. Current Sewer Rates...............................................................................................................................................7 Table 2. Proposed Option 1 Revenue Adjustments..............................................................................................................8 Table 3. Proposed Option 1 Sewer Rates.............................................................................................................................8 Table 4. Proposed Option 2 Revenue Adjustments..............................................................................................................8 Table 5. Proposed Option 2 Sewer Rates.............................................................................................................................8 Table 6 Current Sewer Impact Fees......................................................................................................................................9 Table 7. Proposed Sewer Capacity Charges..........................................................................................................................9 Table 8. Status Quo Rates Based on 2023 Rate Study ........................................................................................................18 Table 9. Customer Billing Unit Growth Projections............................................................................................................19 Table 10. Projected Status Quo Revenue ...........................................................................................................................19 Table 11. Status Quo Operating Expenses..........................................................................................................................19 Table 12. Planned Rate Funded Capital Expenditures........................................................................................................20 Table 13. Sewer Debt Service Payment Schedule...............................................................................................................20 Table 14. Status Quo Financial Proforma ...........................................................................................................................21 Table 15. WWTP Project Cost Breakdown..........................................................................................................................23 Table 16. Total Operating Expenses Including Additional Plant Operating Expenses .........................................................23 Table 17. Total Proposed Debt Service Payments..............................................................................................................24 iii
City of Greenfield – 2025 Sewer Rate and Fee Study
Table 18. Debt Service Coverage Ratio Under Status Quo Rate Adjustments and Proposed Debt......................................24 Table 19. Proposed Revenue Adjustments Option 1 ..........................................................................................................26 Table 20. Proposed Revenue Adjustments Option 2 ..........................................................................................................26 Table 21. Proposed Annual Reserve Contributions and Total Reserve Target ....................................................................26 Table 22. Proposed Option 1 Financial Plan Pro Forma......................................................................................................27 Table 23. Proposed Option 2 Financial Plan Pro Forma......................................................................................................29 Table 24. Revenue Requirements for the Cost of Service Analysis.....................................................................................31 Table 25. Percentage of Operating Costs Allocated to Standard Functions........................................................................32 Table 26. Percentage of Assets Allocated to Standard Functions.......................................................................................32 Table 27. Percent of Operating Costs Allocated to Cost Causative Components ................................................................33 Table 28. Percent of Asset Values Allocated to Cost Causative Components .....................................................................33 Table 29. Revenue requirements allocated to Cost Components.......................................................................................33 Table 30. Total Cost of Service Allocated to Cost Components ..........................................................................................34 Table 31. Cost Components Allocated to Fixed and Variable Charges................................................................................35 Table 32. Count of Bill Calculation .....................................................................................................................................35 Table 33. Cost of Service Fixed Charge Derivation .............................................................................................................35 Table 34. Proposed Option 1 Fixed Charges (per month)...................................................................................................35 Table 35. Proposed Option 2 Fixed Charges (per month)...................................................................................................36 Table 36. Customer Water Use (Gallons) by Customer Class..............................................................................................36 Table 37. Aggregate Customer Class and Applicable Water Use Calculation ......................................................................37 Table 38. Mass Balance Analysis........................................................................................................................................37 Table 39. Cost of Service Variable Charge Derivation.........................................................................................................38 Table 40. Proposed Option 1 Variable Charges (per 1,000 gallons) ....................................................................................38 Table 41. Proposed Option 2 Variable Charges (per 1,000 gallons) ....................................................................................38 Table 42. Current Sewer Units...........................................................................................................................................40 Table 43. Sewer System Asset Valuation ...........................................................................................................................40 Table 44. Sewer System Valuation Calculation ..................................................................................................................41 Table 45. Buy-in Fee Calculation for Sewer System (per unit) ............................................................................................41 Table 46. Future SRUs Based on Master Plan Growth Projection.......................................................................................41 Table 47. Projected Study Period Rate Funded Capital Expenditures.................................................................................42 Table 48. Percent of Planned Capital Expenditures Attributed to Future Growth ..............................................................42 Table 49. Incremental Fee Calculation for Sewer System (per unit) ...................................................................................42 Table 50. Proposed Sewer Capacity Charges......................................................................................................................42 Table 51. Proposed Option 1 Revenue Adjustments..........................................................................................................45 Table 52. Proposed Option 1 Sewer Rates.........................................................................................................................45 Table 53. Proposed Option 2 Revenue Adjustments..........................................................................................................45 Table 54. Proposed Option 2 Sewer Rates.........................................................................................................................45 Table 55. Proposed Sewer Capacity Charges......................................................................................................................45 iv
City of Greenfield – 2025 Sewer Rate and Fee Study
LIST OF FIGURES
Figure 1. City of Greenfield ................................................................................................................................................10 Figure 2. Rate Study Process..............................................................................................................................................11 Figure 3. Buy-in Methodology............................................................................................................................................12 Figure 4. Incremental Cost Method ...................................................................................................................................13 Figure 5. Combined Cost Method ......................................................................................................................................13 Figure 6. Expense Escalation Factors Estimated for Greenfield, FY 2027 ............................................................................16 Figure 7. Engineering News Record California Building Cost Index.....................................................................................17 Figure 8. Status Quo Reserve Fund Balances......................................................................................................................22 Figure 9. Fund Balances Under Status Quo Rate Adjustments and Treatment Plant Proposal Option 1 .............................25 Figure 10. Fund Balances Under Status Quo Rate Adjustments and Treatment Plant Proposal Option 2 ...........................25 Figure 11. Updated Debt Service Coverage Ratio Under Status Quo and Proposed Option 1 Financial Plan ......................28 Figure 12. Fund Balances Under Proposed Option 1 Rate Adjustments and Treatment Plant Proposal .............................28 Figure 13. Updated Debt Service Coverage Ratio Under Status Quo and Proposed Option 2 Financial Plan ......................30 Figure 14. Fund Balances Under Proposed Option 2 Rate Adjustments and Treatment Plant Proposal .............................30 Figure 15. Current vs. Proposed Rates for Residential Customers with 1 Unit, FY 2026 .....................................................39 Figure 16. Non-Residential Customer Impacts with Three Units, FY 2026 ..........................................................................39 v
City of Greenfield – 2025 Sewer Rate and Fee Study
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6 City of Greenfield – 2025 Sewer Rate and Fee Study
EXECUTIVE SUMMARY
Study Overview
The City of Greenfield (City) retained Robert D. Niehaus, Inc. (RDN) to develop a comprehensive Sewer Rate and Fee Study (Study), which includes financial planning, revenue requirements, cost of service, and rate-setting analyses. The Study’s overall goal is to develop a financial plan to identify necessary revenue to meet the City’s financial needs and propose rates and fees, which recover the costs from ratepayers commensurate with their service requirements. RDN collaborated with City staff to evaluate the City’s financial stability, given the current and projected future financial conditions. RDN amended the current rates based on the cost of service (COS) analysis results to further improve equity and ensure compliance with Proposition 218 (Prop 218) requirements and other legal mandates. The main objective of this Study is to ensure that the City can accomplish the planned replacement of their wastewater treatment plant, with the associated cost of debt and increased operating expenses. Other objectives of the Study include:
1. Projecting account growth based on historical data and inputs from City staff for the study period (FY 2026 – FY 2030);
2. Developing a 10-year financial plan for the City to ensure financial sufficiency to fund day-to-day operation and maintenance, debt service requirements, and capital improvement and replacement projects while building up reserves to the City’s target level;
3. Assessing wastewater treatment plant funding options and providing a financial plan which will fund necessary operating, capital, and debt requirements;
4. Estimating sewer flow by customer class based on the most recent available data;
5. Conducting a COS analysis to equitably allocate the costs of providing service to customers commensurate with their service requirements;
6. Designing rates based on the results of COS analysis to establish a strong nexus between costs and pricing of rates;
7. Conducting a rate comparison survey to assess how the proposed rates compare with current rates;
8. Developing Capacity Charges which fairly allocate the costs of system capacity between current and future customers; and
9. Developing an administrative record, which effectively communicates the findings of the Study.
Summary of Recommendations
RDN recommends the following changes and modifications to the current rates and fees based on the findings of the Study:
• Adopt the proposed financial plan which will allow the City to build and maintain a new Sewer Treatment Plant
7 City of Greenfield – 2025 Sewer Rate and Fee Study
• Adjust revenues each year of the study period based on which wastewater treatment plant (WWTP) funding option is required1
o Option 1 - 65.0 percent in January 2026, 5.0 percent in July 2026, 5.0 percent in July 2027, and
5.0 percent in July 2028 and 4.0 percent in July 2029 to ensure compliance with planned debt issuance requirements by the end of the study period (FY 2030). o Option 2 - 65.0 percent in January 2026, 25.0 percent in July 2026, 20.0 percent in July 2027, July 2028, and July 2029 to ensure compliance with planned debt issuance requirements by the end of the study period (FY 2030).
• Realign the cost allocation for customers based on the Cost of Service analysis. • Discontinue rates based on ERU2counts and bill a single fixed charge to each customer account • Implement variable rates for all customers based on 1,000 gallon increments of water use • Cap variable rates for single family residential customers based on the average estimated monthly sewer flow of 5,000 gallons
• Institute a variance process for non-single family residential customers who use significant amounts of water which does not reach the treatment plant
• Develop Capacity Charges which increase the equitable distribution of holding/developing capacity for new customers
• Annually adjust Capacity Charges based on the California Department of General Services California Construction Cost Index
Current Rates
The City’s customers currently pay a fixed monthly service charge. The monthly charge is based on each customer’s relative number of billing units. As of July 2025, customers pay $5.14 monthly per account and $58.22 per unit (ERU). Under the current rates, one account charge is billed per customer.3 ERU charges are billed based on the number of units applied by the city to a particular customer. According to City staff, the number of billing units is determined based on the type of customer.4 The current sewer rates as described are displayed in Table 1.
Table 1. Current Sewer Rates
Rate Category Monthly Rate
Account $5.14
ERU $58.22
1 Wastewater treatment plant funding option are described in the financial planning section (2.9 Proposed Wastewater Treatment Plant) of this report
2 ERUs (Equivalent Residential Units) are assigned by City staff when a customer joins the sewer system 3 Sewer rates were increased by 15 percent at the beginning of the current fiscal year, July 2025, as per the current rate study. City of Greenfield. Sewer Rate Study, January 16, 2023. RDN. The first year of proposed rates will occur in the same fiscal year.
4 City of Greenfield Municipal Code Chapter 13.32 Sewer Rates. https://www.codepublishing.com/CA/Greenfield/#!/html/Greenfield13/Greenfield1332.html 8 City of Greenfield – 2025 Sewer Rate and Fee Study
Proposed Rates
RDN recommends that the City implement a sewer rate structure which includes both a fixed and variable component. Fixed rates will be applied equally to all customers and will be assessed at one per account per month.
Variable rates will be billed in 1,000 gallons increments based on each customer’s monthly water use. Variable rates for single family residential customers will be capped at 5,000 gallons of water use per month to reflect the estimated average indoor sewer flow from those customers. The rates for non-single family residential customers will not be capped; however, if a non-residential customer uses significant water that is not delivered to the treatment plant, the sewer variable rate should reflect that though a variance process. The recommended rates allow the City to maintain healthy reserve fund balances, maintain planned debt service requirements and execute necessary capital improvement projects over five-year study period. In addition to the proposed revenue adjustments, the proposed rates reallocate the City’s costs based on a detailed COS analysis which increases the equitability of the proposed rates by allocating City costs based on the relative wear each customer places on the system based on the total sewer flow attributed to the customer class. Thus, each customer will have different overall rate adjustments.
Proposed option 1 annual revenue adjustments presented in this Study are 65.0 percent in January 2026, 5.0 percent in July 2026, July 2027, and July 2028, and 4.0 percent in July 2029. The proposed option 1 adjustments will balance the budget at the end of the five-year study period. Table 2 and Table 3 show the proposed revenue adjustments and rates for the study period, respectively.
Table 2. Proposed Option 1 Revenue Adjustments
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue Adjustment 65.0% 5.0% 5.0% 5.0% 4.0%
Table 3. Proposed Option 1 Sewer Rates
Rate Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Fixed Charge $34.99 $36.74 $38.58 $40.51 $42.13
Variable Charge (per 1,000 gallons) $11.25 $11.81 $12.40 $13.02 $13.54 Proposed option 2 annual revenue adjustments presented in this Study are 65.0 percent in January 2026, 25.0 percent in July 2026, and 20.0 percent July 2027, July 2028, and July 2029. The proposed adjustments will balance the budget at the end of the five-year study period. Table 4 and Table 5 show the proposed revenue adjustments and rates for the study period, respectively.
Table 4. Proposed Option 2 Revenue Adjustments
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue Adjustment 65.0% 25.0% 20.0% 20.0% 20.0%
Table 5. Proposed Option 2 Sewer Rates
Rate Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Fixed Charge $34.99 $43.74 $52.49 $62.98 $75.58
Variable Charge (per 1,000 gallons) $11.25 $14.06 $16.87 $20.24 $24.29 9 City of Greenfield – 2025 Sewer Rate and Fee Study
Capacity Charges
In addition to developing new sewer rates, this study also recommends changes to the City’s current Sewer Impact Fee. Impact Fees, Connection Fees, Capacity Fees, and Capacity Charges are all synonyms which refer to a fee charged by a utility to maintain and produce additional system capacity which can be used by new customers joining the system. This report will refer to the proposed fee as “Capacity Charges.” Table 6 shows the City’s current Impact Fees, which are based on the type of customer and the number of units joining the system.
Table 6 Current Sewer Impact Fees5
Sewer Impact Fee Unit Fee
Single Family Residential Dwelling Unit $3,573.68
Duplex Residential Dwelling Unit $1,850.00
Triplex Residential Dwelling Unit $1,645.00
Multi-Family Residential Dwelling Unit $1,360.00
Commercial, Industrial, Public Fixture Unit $99.60
Table 7 shows the proposed Sewer Capacity Charges which are designed to both reimburse current customers for the additional carried capacity, which is being carried in the sewer system, as well as ensure that new customers are paying for their fare share of the additional capacity produced by future rate funded capital improvement projects. When a new customer joins the sewer system, city engineers should determine that customer’s impact the system compared to a single family dwelling unit. A single family dwelling unit was determined to generate an average of 5,000 gallons of sewer on a monthly basis (standard residential unit, SRU). Thus one SRU for non-single family development should be based on an increment of 60,000 gallons of annual sewer flow. The proposed capacity charge should be multiplied by the estimated SRUsfor each non-single-family residence to determine the charge for each specific project.
Table 7. Proposed Sewer Capacity Charges
Connection Fee Unit Fee
Capacity Charge Standard Residential Unit $7,286.34
5 City of Greenfield. Resolution No. 2006-15. February 2006 10 City of Greenfield – 2025 Sewer Rate and Fee Study
1 INTRODUCTION
The City of Greenfield is in the Salinas Valley of Monterey County. Founded in 1905 and incorporated in 1947, Greenfield is centered in a highly productive agricultural region. The City owns and operates the Sewer collection, treatment, and disposal facilities that serve a population of approximately 18,000 residents. The existing WWTP was originally constructed in 1978 and has since been upgraded and expanded several times. It consists of a headworks, primary clarifiers, secondary biological treatment provided by aerated ponds, and effluent disposal provided by percolation ponds and effluent disposal fields.
The Sewer collection system is comprised of approximately thirty-one miles of gravity-fed sewer lines. Sewer pipes ranging in size from 4-inch to 24-inch diameter, and six lift stations. The Sewer collection system spans over 2.1 square miles to serve the City’s 3,800 customers. Figure 1 shows the city zoning and limits in red. In order for the City to continue to maintain service for its current customers, and to provide service to new customers at State mandated levels, a new treatment plant is required.
Figure 1. City of Greenfield
11 City of Greenfield – 2025 Sewer Rate and Fee Study
1.1 Methodology
The sewer rates formulated in the Study were developed using principles set forth by the Water Environment Federation (WEF). RDN rate-making practices incorporate methods described in the WEF Financing and Charges for Sewer Systems Manual 276. Figure 2 presents the steps taken to develop the City’s proposed rates.
Figure 2. Rate Study Process
1. Growth Projection: Project customer growth for FY 2025 and ten additional years, including the five-year study period, FY 2026 through FY 2030, using City historical billing data and local planning documents.
Forecast revenues for the study period based on projected customer growth.
2. Financial Planning/Revenue Requirements: Develop a five-year financial plan based on the projected revenues and annual costs, which include both operating and capital expenses. The City’s target reserve level is also to be considered part of the financial planning. Based on financial planning, revenue requirements and necessary revenue adjustments are determined for each year of the study period.
3. Cost of Service (COS) Analysis: Perform a COS analysis to allocate costs among the customers commensurate with their service requirements.
4. Rate Design: Design rates to equitably recover the rate revenue requirements from each customer class based on the proportional revenue requirements determined through the COS analysis.
The Capacity Charge was developed using guidelines set forth by the AWWA M17. The two primary methods outlined in the M1 used to calculate Capacity Charges are the Buy-in and the Incremental Cost methods. The Buyin method recovers the cost of capacity in those portions of the existing system in which there is still capacity available. The Incremental Cost method is a calculation of the Incremental Costs of additional system capacity needed to add to serve new development. There is also a hybrid approach in which these two methods are combined. The combined approach is most often used when the system has some capacity left to take on new customers, but additional capacity is also needed to serve projected growth in the planning horizon. 6 Financing and Charges for Sewer Systems, WEF Manual of Practice Number 27, Water Environment Federation 7 American Water Works Association. M1 Principles of Water Rates, Fees and Charges, Seventh Edition 12 City of Greenfield – 2025 Sewer Rate and Fee Study
Buy-in Method
Under the Buy-in Method, new development purchases a share of capacity proportionate to the development’s estimated demand. This method is typically used when the existing water system has the capacity to accommodate increased demand without large investment in capital projects. There are four generally accepted methods used to determine the existing system value:
5. Original Cost – asset cost in the year of construction
6. Original Cost less Depreciation – original cost subtracting the accumulated depreciation of system assets
7. Replacement Cost New (RCN) – original cost escalated to current dollars using a construction cost index.
This method reflects the cost of replicating the existing system.
8. Replacement Cost New less Depreciation (RCLD) – replacement cost new of existing system subtracted by the accumulated depreciation. This method reflects the current costs of replacing system assets while adjusting the valuation to reflect the remaining life of current assets.
Figure 3 provides a visual representation of a situation where the Buy-in Method best applies. In this example, the commuter bus (utility) has a capacity to seat 10 passengers (system capacity). Of the 10 total seats, eight are taken (existing customers), but there are two extra seats available ready for the new passengers (new customers). A new passenger, who wants to buy a seat on the bus, is expected to pay one tenth of the total value of the bus to secure his/her seat. This method rests on the premise that existing customers have been maintaining not only their share of the system capacity that they use but also for the extra capacity that is not currently being used. New customers therefore should reimburse existing customers for the additional contribution they have made to maintain the extra capacity.
The Buy-in Method is used when there is sufficient capacity left in the existing system to accommodate new development over the planning period, and the goal of this method is to achieve capital equity between existing and new customers.
Figure 3. Buy-in Methodology
Incremental Cost Method
While the Buy-in Method is used when the system has sufficient capacity for additional development, the Incremental Cost method is most appropriate when current system capacity is not capable of serving new development without significant investment in new facilities. Under this methodology all the costs of future system expansion are allocated to new customers. This method requires a detailed long-term capital improvement plan (CIP) that clearly identifies the proportion of project cost contributing to expansion of the system. As shown 13 City of Greenfield – 2025 Sewer Rate and Fee Study
in Figure 4, using the same bus analogy, when the bus is full (at capacity), new passengers must purchase additional cargo for them to secure a seat so that existing customers would not be burdened by the Incremental Costs. This method rests on the premise “growth pays for growth.” Figure 4. Incremental Cost Method
Combined Approach
For systems that have the capacity to serve new development in the short-run but require investment in capacityexpanding facilities in the long-run, a combination of Buy-in and Incremental Cost Methods is considered. Capacity Charges developed under the combined method reflect the value of the existing system and expansion related CIPs. In Figure 5 the new passengers are expected to share the costs associated with the available seats in the original section of the bus and extension of the bus that is added to increase additional availability of seats.
Figure 5. Combined Cost Method
1.2 Legal Framework
The primary goal of this study is to help the City establish rates that achieve the City’s objectives of revenue stability, equitable cost recovery, and ratepayer affordability. This section of the report describes the legal framework considered in developing the rates to ensure that the calculated cost of service rates provide a fair and equitable allocation of costs to the different customer classes.
California Constitution‐Article XIII C (Proposition 26) The voters in the State approved Proposition 26 on November 2, 2010. Proposition 26 amended Article XIII C of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” with listed exceptions. By means of these exceptions, Article XIII C classifies several types of charges, in addition to property-related charges, that are not taxes, such as charges for specific services or benefits, regulatory charges and penalties.
Article XIII C’s definition of “tax” lists the following exceptions: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payer that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payer that is not provided to those 14 City of Greenfield – 2025 Sewer Rate and Fee Study
not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law; (6) a charge imposed as a condition of property development; and (7) assessments and property-related fees imposed in accordance with the provisions of Article XIII D.
Proposition 26 also provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payer bear a fair or reasonable relationship to the payer’s burdens on, or benefits received from, the governmental activity. Like the proportionality requirements of Article XIII D, assessment of rates under these requirements, if applicable, would be supported by the cost of service approach.
California Constitution‐Article XIII D, Section 6 (Proposition 218) In November 1996, California voters passed Proposition 218, the “Right to Vote on Taxes Act.” This constitutional amendment protects taxpayers by limiting the methods by which local governments can create or increase taxes, fees, and charges without taxpayer consent. Between 2002 and 2017, California courts have ruled that fees associated with providing Sewer services are “property-related” and thus under the jurisdiction of Prop 218. The principal requirements for fairness of the fees related to public Sewer service are as follows: Revenues derived from the fee or charge shall not exceed the funds required to provide the property-related service. Revenues derived by the fee or charge shall not be used for any other purpose other than that for which the charge was imposed. The amount of the fee or charge imposed upon any parcel shall not exceed the proportional cost of service attributable to the parcel. Reliance by an agency on any parcel map, including, but not limited to, an assessor’s parcel map, may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership for purposes of this article.
The rates developed in this Report use a methodology to establish an equitable system of charges that recover the cost of providing service and fairly apportion costs to each customer as required by Proposition 218.
California Code 66013 – Capacity Charges
(a) Notwithstanding any other provision of law, when a local agency imposes Charges for water connections or Sewer connections, or imposes Capacity Charges, those Charges or charges shall not exceed the estimated reasonable cost of providing the service for which the Charge or charge is imposed, unless a question regarding the amount of the Charge or charge imposed in excess of the estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote of two-thirds of those electors voting on the issue. “Capacity Charge” means a charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities. A “Capacity Charge” does not include a commodity charge. 15 City of Greenfield – 2025 Sewer Rate and Fee Study
(c) A local agency receiving payment of a charge as specified in paragraph (3) of subdivision (b) shall deposit it in a separate capital facilities fund with other charges received, and account for the charges in a manner to avoid any commingling with other moneys of the local agency, except for investments, and shall expend those charges solely for the purposes for which the charges were collected. Any interest income earned from the investment of moneys in the capital facilities fund shall be deposited in that fund.
1.3 Key Assumptions
A test year, FY 2026, was selected for which costs are to be analyzed, and rates established for this study. The financial plan was built for the next 10 years, which includes the five-year study period, FY 2026 through FY 2030 with a detailed revenue adjustment plan. The City’s fiscal year starts on July 1 and ends on June 30.
Escalation Factors
The financial plan was built based on an assumption in the projected escalation of revenues and expenses associated with both operations and maintenance (O&M) and capital improvement projects (CIPs). Escalation factors were calculated for nine independent variables using historical Consumer Price Index (CPI) data from the West – Size Class B/C, between the year 2000 and the most current calendar year8, and projections by the Federal Reserve Bank of St. Louis (FRED) Economic Research Division, Quarterly Census of Employment and Wages (QCEW), and Engineering News Record (ENR) Building Cost Index (BCI). All escalation factors were developed by calculating an average rate of change and projecting that rate into future years. Figure 6 displays the escalation factors estimated for the City for FY 2027.
8 Bureau of Labor Statistics (2025) Consumer Price Indices West – Size Class B/C, Not Seasonally Adjusted. 16 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 6. Expense Escalation Factors Estimated for Greenfield, FY 2027
4.4%
4.4%
6.5%
6.1%
5.0%
3.3%
5.6%
8.8%
3.1%
1.5%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Payroll
Other Employee
Utilities
Chemicals
Water Treatment
Fuel/Automobile
Construction
Insurance
Overall
Equipment
Asset Values
The replacement cost of assets was determined by using the Engineering News Records Building Cost Index (ENR BCI) for California. The City’s oldest recorded asset still in use dates to 1970, where the BCI was indexed at 1,381.
The BCI in July 2025 is indexed at 10,195, an increase of over 700 percent. Figure 7 shows the trend of the ENR BCI since 1970.
17 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 7. Engineering News Record California Building Cost Index 0 2000
4000
6000
8000
10000
12000
12/1/1970
5/1/1972
10/1/1973
3/1/1975
8/1/19761/1/19786/1/1979
11/1/1980
4/1/19829/1/19832/1/19857/1/1986
12/1/1987
5/1/1989
10/1/1990
3/1/19928/1/19931/1/19956/1/1996
11/1/1997
4/1/19999/1/20002/1/20027/1/2003
12/1/2004
5/1/2006
10/1/2007
3/1/20098/1/20101/1/20126/1/2013
11/1/2014
4/1/20169/1/20172/1/20197/1/2020
12/1/2021
5/1/2023
10/1/2024
California BCI
18 City of Greenfield – 2025 Sewer Rate and Fee Study
2 FINANCIAL PLAN
RDN built a 10-year financial model for the City’s sewer system to meet the system’s long-term financial goals.
The detailed rate analysis was performed for the first five years. It is important to note that the status quo financial plan was developed based on the previous rate study9 which was designed to produce a positive ending balance by FY 2027; however, the proposed rates were adopted on a different schedule than was originally intended, which led to negative balances in the intervening years. The status quo (rate study) financial plan was also developed with the assumption that a major Sewer treatment plan project (WWTP) would be fully funded by State grants. In the years since the financial plan was developed, the City has revised estimates of grant contributions for the building of the treatment plant and the City will have to fund a portion or all of the project through debt issuances through a combination of the State Revolving Fund (SRF) and/or private loans. If the Sewer utility maintains the current financial plan, it will reach a positive ending balance by FY 2028; however, the City will not be able to fund the additional debt payments or maintain an accepted debt service coverage ratio (DSCR) which are required to complete the planned WWTP. The status quo financial plan through FY 2030 is described in the following sections. The status quo financial plan assumes no additional debt service occurs during this period, including the WWTP. During discussions with City staff and engineering consultants, it was shown that the City cannot maintain the current sewer service without completing a new WWTP, therefore, the proposed financial plan (Section 2.9 through 2.11) was developed by including the additional costs which the City needs to incur to fund the proposed project and maintain the additional reserve and debt service coverage requirements. Two options were developed to ensure that the WWTP would be funded. The rates proposed in this study are designed to fully fund the WWTP requirements.
2.1 Status Quo Rate Increases
The status quo financial plan includes revenue adjustments based on the 2023 rate study. Table 8 shows the rates which will come into effect each year under the status quo financial plan. These rates were used to determine the future rate revenues based on the projected billing units.
Table 8. Status Quo Rates Based on 2023 Rate Study
Rate Category FY 2026 FY 2027 FY 2028
Account $5.14 $5.91 $6.20
ERU $58.22 $66.95 $70.30
2.2 Billing Units
RDN first projected customer growth based on customer billing units to estimate the City’s revenue generated from rates. RDN utilized the City’s billing records from FY 2025 to determine the current billing units and used this as the starting point for the projections. Billing units include both account numbers and ERU numbers. Because current revenues are derived from the number of billing units, RDN projected billing units for each customer using a linear regression model. RDN projects that the number accounts and ERUs will increase by 0.5 percent per year throughout the study period. The trends captured in the historical data were forecasted over the study period, yielding the billing unit counts displayed in Table 9.
9 City of Greenfield. Sewer Rate Study, January 16, 2023. RDN. 19 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 9. Customer Billing Unit Growth Projections
Billing Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Accounts 3,434 3,451 3,468 3,485 3,503
ERUs 4,611 4,634 4,656 4,679 4,702
2.3 Revenues
Based on the projected billing units, RDN conducted a revenue analysis using the current Sewer rates. The City currently collects revenues from monthly charges and other operating revenues. With no change to the planned rate increases, the City is expected to collect between $3.4 and $4.2 million in operating revenues per year during the study period for the Sewer utility. The revenue analysis also includes non-operating revenues such astransfers and connection fees. These revenues average approximately $87,000 a year and are used to offset the revenue requirements that need to be recovered from customers’ rates. Forecasted revenues by category are shown in Table 10.
Table 10. Projected Status Quo Revenue10
Revenue Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Fixed Rate Revenue $3,433,394 $3,967,298 $4,186,045 $4,206,530 $4,227,118 Misc Revenue $1,225 $0 $0 $0 $0
Connection Fees $48,230 $48,230 $48,230 $48,230 $48,230 Transfer In $631,250 $0 $0 $0 $0
Total Revenue $4,114,099 $4,015,528 $4,234,275 $4,254,760 $4,275,348
2.4 Operating and Maintenance (O&M) Expense
The City’s FY 2026 Budget anticipated approximately $2.6 million in expenses, classified as O&M expenses. The itemized O&M expenses were carefully reviewed by RDN and forecasted overthe study period using the escalation factors discussed in the Key Assumptions section (Figure 6). On average, O&M Expenses are expected to increase by 3.1 percent annually through the study period. By FY 2030, annual O&M expenses are projected to reach around $3.0 million. O&M expenses by function are shown in Table 11.
Table 11. Status Quo Operating Expenses11
Expense Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Billing $261,770 $272,046 $282,737 $293,862 $305,436
Admin $393,249 $408,437 $424,236 $432,217 $448,765
Collection $600,708 $624,246 $648,750 $682,715 $709,278 Treatment $1,184,400 $1,230,975 $1,279,253 $1,329,757 $1,357,549 General Dept $193,333 $193,333 $193,333 $193,333 $193,333 Total Operating Expense $2,633,460 $2,729,037 $2,828,309 $2,931,884 $3,014,361 10 Note that status quo Connection Fee Revenues do not include the proposed fee adjustment shown in this report 11 Note that status quo Operating Expenses do not include the additional staff and materials needed to operate the proposed treatment plant
20 City of Greenfield – 2025 Sewer Rate and Fee Study
2.5 Capital Improvement Projects
In addition to the costs associated with daily operation and maintenance, the City estimates capital project spending between $38,000 and $2.0 million per year with no inflation adjustment for the study period. Major capital projects during the study period include CCTV of sewer lines, sewer main upgrades, and replacement of the Tyler Lift Station, among others. Table 12 shows the planned annual CIP expenses for the study period.
Table 12. Planned Rate Funded Capital Expenditures
Expense Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Capital Paygo $2,011,583 $1,003,750 $249,500 $38,000 $998,371
2.6 Debt Service
The City’s sewer utility currently has outstanding annual debt service payments of approximately $245,000 a year.
Outstanding debt includes the CIEDB Sewer Expansion and the PNC Equipment Finance Loan. Table 13 shows the Sewer utility’s annual debt service payment schedule by loan as well as the total debt service payment.
Table 13. Sewer Debt Service Payment Schedule
Description Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 CIEDB Wastewater Expansion Principal $86,377 $89,098 $91,905 $94,800 $104,143 CIEDB Wastewater Expansion Interest $37,585 $34,821 $31,971 $29,030 $19,539 PNC Equipment Finance Principal $101,282 $109,400 $117,967 $127,003 $104,626 PNC Equipment Finance Interest $20,083 $16,840 $13,339 $9,566 $3,324 Total Debt Service $245,327 $250,159 $255,182 $260,399 $231,631
2.7 Proposed Reserve Policy
The City must maintain an appropriate reserve balance to ensure that day-to-day operations will continue during emergencies and guarantee the future stability of the system. As part of this rate study plan, RDN recommends that the City’s financial goal be to build an appropriate level of cash reserves for each reserve fund included in the financial plan. RDN recommends the following reserve policies:
Operating Reserve: three months of budgeted Operating and Maintenance (O&M) expense for the current year, a balance of $658 thousand in FY 2026.
Capital Replacement Reserve: based on an annual contribution of 2 percent of total asset values, which will allow for a 50-year replacement schedule for all fixed assets. Annual contributions based on the current assets are equal to around $343 thousand.
2.8 Status Quo Financial Proforma
The City currently has a projected zero dollar opening cash balance for FY 2026. Table 14 shows the status quo financial proforma throughout the study period based on the financial inputs described in the previous sections. 21 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 14. Status Quo Financial Proforma
Rate Increase 15.0% 15.0% 5.0% 0.0% 0.0%
Rate Month Implemented 1-Jul 1-Jul 1-Jul 1-Jul
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Cash Position Opening Balance -$ (776,271) $ $ (743,689) $ 157,595 $ 1,182,072 Revenues
Sewer Rate Revenue $ 3,433,394 $ 3,450,192 $ 3,467,075 $ 3,484,041 $ 3,501,092 Adjusted Sewer Rate Revenue -$ 517,105 $ $ 718,971 $ 722,489 $ 726,025 Other Operating Revenue $ 1,225 -$ -$ -$ -$
Non-Operating Revenue $ 679,480 $ 48,230 $ 48,230 $ 48,230 $ 48,230 Total Revenues $ 4,114,099 $ 4,015,528 $ 4,234,275 $ 4,254,760 $ 4,275,348 Operating Expenses $2,633,460 $2,729,037 $2,828,309 $2,931,884 $3,014,361 Net Operating Revenue $ 1,480,639 $ 1,286,491 $ 1,405,966 $ 1,322,876 $ 1,260,986 Current Debt Service $ 245,327 $ 250,159 $ 255,182 $ 260,399 $ 231,631 Proposed Debt Service -$ -$ -$ -$ -$
Total Operating and Debt Service $ 2,878,787 $ 2,979,196 $ 3,083,491 $ 3,192,283 $ 3,245,993 Net Revenues Before CIP $ 1,235,312 $ 1,036,332 $ 1,150,784 $ 1,062,477 $ 1,029,355 Capital Expenditure $ 2,011,583 $ 1,003,750 $ 249,500 $ 38,000 $ 998,371 Net Income $ (776,271) $ 32,582 $ 901,284 $ 1,024,477 $ 30,984 Ending Balance $ (776,271) $ (743,689) $ 157,595 $ 1,182,072 $ 1,213,056 Figure 8 displays the expected ending fund balances under the status quo financial plan. Negative fund balances mean that the City’s general fund must subsidize the Sewer fund. Under the status quo financial plan, the City will develop a positive reserve balance beginning in FY 2028 which will increase through FY 2030; however, the City is currently seeking funding for the major Wastewater Treatment Plant upgrade. The proposed upgrade may include significant grant funding, but will also require the City to issue additional debt financing. The need for new debt and the increase in operating expenses associated with the new WWTP mean that a new financial plan must be developed in order to fund the project. The following section details the proposed financial plan inputs and results. 22 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 8. Status Quo Reserve Fund Balances
-$1.0
-$0.5
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Millions
2.9 Proposed Wastewater Treatment Plant
The WWTP project is planned in 3 phases. In order to complete all phases of the WWTP project simultaneously, a total of approximately $111.3 million in funding will be needed. Three funding scenarios were provided by State representatives to complete a portion or all of the necessary updates to the WWTP project: 12 • Scenario 1 - Phase 1 Only ($81,121,251) – $65,560,625.50 grant/PF + $15,560,625.50 CWSRF loan = $81,121,251
• Scenario 2 - Phase 1 + 2 ($94,542,601) – $72,271,300.50 grant/PF + $22,271,300.50 CWSRF loan = $94,542,601
• Scenario 3 - All Phases – ($111,303,626) - $75,000,000 grant/PF + $36,303,626 CWSRF loan = $111,303,626
The plan used in this report, as directed by City staff, is designed complete all phases of the WWTP project as shown in scenario 3. Both scenario 1 and scenario 2 would require the City to either pay for future phases from customer rates, or apply for future grant and loan funding, which could increase the overall costs. City staff estimated that an additional $29 million in costs may be incurred if the total project was completed in multiple phases versus simultaneously as shown in scenario 3.
Under the current (FY 2025-26) Clean Water State Revolving Fund Intended Use Plan (CWSRF IUP), the City’s may receive up to approximately $75 million in grant funding, or 67.4 percent of the total project under scenario 3.
The remaining balance to complete the project must either be paid for with cash or through the SRF loan program.
Two options were modeled to allow the City funding to complete the project. Option 1 assumes that the $75 12 Correspondence from Lukas Moore, Water Resources Control Engineer. State Water Resources Control Board Division of Financial Assistance. June 2025.
23 City of Greenfield – 2025 Sewer Rate and Fee Study
million in grant funding will be available and an SRF loan of $36.3 million will fulfill the remaining funding requirements. Option 2 assumes that no grant funding will be available and that the City must fund all of the WWTP project through debt. Proposed debt issuances in option 2 include the maximum issuance for the SRF program, $50.0 million, and the remainder being made up by private loans ($61.3 million) at 4.25 percent interest with a 35-year repayment schedule. Table 15 shows the projected total cost for the WWTP project, as well as the planned grant and loan funding under each option. It is expected that the new plant will be complete and operational beginning in FY 2029.
Table 15. WWTP Project Cost Breakdown
Description Option 1 Option 2
Total Project Cost $111,303,626 $111,303,626
CWSRF IUP Grant $75,000,000 $0
CWSRF Loan $36,303,626 $50,000,000
Private Loan $0 $61,303,626
The planned WWTP exceeds the operational capacity of the City‘s current plant. In order to operate the increased capacity provided by the new treatment plant, additional expenses are expected to be incurred. Additional expenses include new staff wages totaling approximately $195,000. Additional chemical, equipment, and treatment expenses (chemicals, electricity, etc.) are expected to total approximately $1.4 million beginning in FY 2029, around $1 million more annually than current treatment operations. Table 16 shows the total operating expenses with the inclusion of additional plant operating costs beginning in FY 2029.
Table 16. Total Operating Expenses Including Additional Plant Operating Expenses Description FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Total Operating Expense $2,633,460 $2,729,037 $2,828,309 $4,114,942 $4,248,788 The proposed SRF loans have a loan term of 30 years with a 2.1 percent interest rate.13 Debt payments will begin in the year after the completion of the WWTP, or FY 2030. Annual Payments are expected to total around $1.6 million for principal and interest for option 1. Option 2 includes an SRF loan issuance of $50.0 million and private loan issuance of $61.3 million with a term of 35 years at 4.25 percent interest.14 Loan payments for private loans begin immediately after the issuance which means that payments are scheduled to begin in FY 2027. Total debt service payments for the private loan are projected to be $3.4 million per year and payments for the $50.0 million SRF loan are projected to be $2.3 million per year. Total debt payments beginning in FY 2030 are projected to be $5.7 million per year. Table 17 shows the WWTP debt Payments which will be made during the study period. 13 Correspondence from Mehreen Siddiqui, P.E. State Water Resources Control Board Division of Financial Assistance. June 2025.
14 Private loan terms provided by City staff and financial advisors. August 2025. 24 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 17. Total Proposed Debt Service Payments
Description Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 2026 WWTP SRF Option 1 Principal $0 $0 $0 $0 $880,951
2026 WWTP SRF Option 1 Interest $0 $0 $0 $0 $762,376
Total WWTP Debt Service $0 $0 $0 $0 $1,643,327
2026 WWTP SRF Option 2 Principal $0 $0 $0 $0 $1,213,310 2026 WWTP SRF Option 2 Interest $0 $0 $0 $0 $1,050,000
2026 Private Loan Principal $0 $791,429 $799,011 $832,969 $868,370 2026 Private Loan Interest $0 $2,605,404 $2,597,822 $2,563,864 $2,528,463 Total WWTP Debt Service $0 $3,396,833 $3,396,833 $3,396,833 $5,660,143 In addition to the annual payments for debt service, the SRF debt covenants require a certain ratio of net revenue in excess of operating expenses. When calculating debt service coverage requirements, the City should maintain a net revenue of 120 percent, or a 1.20 debt service coverage ratio (DSCR) to avoid facing technical default. Under the current rates and debt payments, the City is above the required coverage ratio; however, with the increase in operating expenses and debt payments, the DSCR will fall below the requirements. Table 18 shows the City’s debt service coverage ratio under the status quo rate adjustments with the additional debt service and operating expenses shown in tables 16 and 17 for both options.
Table 18. Debt Service Coverage Ratio Under Status Quo Rate Adjustments and Proposed Debt Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Total Revenue $4,114,099 $4,015,528 $4,234,275 $4,254,760 $4,275,348 Total Operating Expense $2,633,460 $2,729,037 $2,828,309 $4,114,942 $4,248,788 Total Debt Service Option 1 $245,327 $250,159 $255,182 $260,399 $1,874,959 Debt Service Coverage Ratio 6.04 5.14 5.51 0.54 0.01
Total Debt Service Option 2 $245,327 $3,646,992 $3,652,015 $3,657,232 $5,891,775 Debt Service Coverage Ratio 6.04 0.35 0.38 0.04 0.00
Figure 9 and Figure 10 display the expected ending fund balances under the status quo rate adjustments and the proposed financial plans needed to complete the Sewer treatment plant project and maintain ongoing operations and debt service payments under option 1 and option 2, respectively. Negative fund balances mean that the City’s general fund must subsidize the Sewer fund.
25 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 9. Fund Balances Under Status Quo Rate Adjustments and Treatment Plant Proposal Option 1 $(4,000,000)
$(3,000,000)
$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Ending Balance Reserve Target
Figure 10. Fund Balances Under Status Quo Rate Adjustments and Treatment Plant Proposal Option 2 $(20,000,000)
$(15,000,000)
$(10,000,000)
$(5,000,000)
$-
$5,000,000
$10,000,000
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Ending Balance Reserve Target
In order to successfully complete the WWTP, RDN recommends that the City implement a new revenue adjustment schedule to fund increasing operating and debt service needs. Table 19 shows the revenue adjustments that are needed to ensure that the City can accomplish the WWTP funding requirements for option 26 City of Greenfield – 2025 Sewer Rate and Fee Study
1. Table 20 shows the revenue adjustments that are needed to ensure that the City can accomplish the WWTP funding requirements for option 2. Under the proposed revenue adjustment plan, the City will implement the first adjustment in January 2026, followed by the second adjustment in July 2026, and all the other adjustments will occur in the succeeding July, the beginning of the fiscal year.
Table 19. Proposed Revenue Adjustments Option 1
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue Adjustment 65.0% 5.0% 5.0% 5.0% 4.0%
Table 20. Proposed Revenue Adjustments Option 2
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue Adjustment 65.0% 25.0% 20.0% 20.0% 20.0%
2.10 Reserve Contributions and Target
Because of the additional depreciable assets planned as part of the WWTP proposal, additional reserves should be collected to ensure a 50-year replacement schedule and keep up with increasing operating costs. Table 21 shows the proposed annual reserve contributions and to the total reserve target through the study period under the proposed rate plan, respectively. While the City may not make a full reserve contribution in the first year of the rate study, total reserves should reach target levels by the second or third year depending on the option chosen.
Table 21. Proposed Annual Reserve Contributions and Total Reserve Target Reserve FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Operating Reserve $658,365 $23,894 $24,818 $321,658 $33,462 CIP Reserve $686,989 $343,495 $343,495 $1,666,914 $1,666,914 Total Reserve Target $1,345,354 $1,712,743 $2,081,055 $4,069,628 $5,770,004
2.11 Proposed Option 1 Financial Plan Proforma
Based on the projected total revenue and necessary costs to be recovered during the study period, RDN built a financial plan that will generate sufficient revenues for the day-to-day operation and annual PAYGO and make appropriate contributions to reserves. The City currently has a projected beginning cash balance of $0 in FY 2026.
Table 22 shows the proposed financial plan through the study period under the proposed option 1 rate plan. By adopting this plan, the City will maintain debt service coverage ratios (Figure 11) and fund balance needs (Figure 12) throughout the study period.
27 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 22. Proposed Option 1 Financial Plan Pro Forma15
Rate Increase 65.0% 5.0% 5.0% 5.0% 4.0%
Rate Month Implemented 1-Jan 1-Jul 1-Jul 1-Jul 1-Jul
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Cash Position Opening Balance -$ 454,741 $ $ 2,622,573 $ 5,777,984 $ 8,209,220 Revenues
Sewer Rate Revenue $ 3,433,394 $ 3,450,192 $ 3,467,075 $ 3,484,041 $ 3,501,092 Adjusted Sewer Rate Revenue 1,115,853 $ $ 2,527,266 $ 2,839,967 $ 3,170,760 $ 3,453,773 Other Operating Revenue $ 1,225 -$ -$ -$ -$
Non-Operating Revenue $ 794,639 $ 173,319 $ 181,361 $ 189,775 $ 198,580 Total Revenues $ 5,345,111 $ 6,150,778 $ 6,488,403 $ 6,844,577 $ 7,153,446 Operating Expenses $2,633,460 $2,729,037 $2,828,309 $4,114,942 $4,248,788 Net Operating Revenue $ 2,711,651 $ 3,421,741 $ 3,660,093 $ 2,729,635 $ 2,904,658 Current Debt Service $ 245,327 $ 250,159 $ 255,182 $ 260,399 $ 231,631 Proposed Debt Service -$ -$ -$ -$ 1,643,327 $
Total Operating and Debt Service $ 2,878,787 $ 2,979,196 $ 3,083,491 $ 4,375,341 $ 6,123,747 Net Revenues Before CIP $ 2,466,324 $ 3,171,582 $ 3,404,911 $ 2,469,236 $ 1,029,699 Capital Expenditure $ 77,011,583 $ 1,003,750 $ 249,500 $ 38,000 $ 998,371 Grants $ 75,000,000 -$ -$ -$ -$
Cash $ 2,011,583 $ 1,003,750 $ 249,500 $ 38,000 $ 998,371 Net Income $ 454,741 $ 2,167,832 $ 3,155,411 $ 2,431,236 $ 31,328 Ending Balance $ 454,741 $ 2,622,573 $ 5,777,984 $ 8,209,220 $ 8,240,549 Reserve Target $1,345,354 $1,712,743 $2,081,055 $4,069,628 $5,770,004 15 Note that the proposed financial plan includes the proposed capacity charge adjustment shown in this report in the Nonoperating revenues category 28 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 11. Updated Debt Service Coverage Ratio Under Status Quo and Proposed Option 1 Financial Plan -2.0
0.0 2.0
4.0 6.0
8.0 10.0
12.0 14.0
16.0 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
DSCR Status Quo DSCR Proposed DSCR Requirement
Figure 12. Fund Balances Under Proposed Option 1 Rate Adjustments and Treatment Plant Proposal $0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Millions
Ending Balance Reserve Target
29 City of Greenfield – 2025 Sewer Rate and Fee Study
2.12 Proposed Option 2 Financial Plan Proforma
Based on the projected total revenue and necessary costs to be recovered during the study period, RDN built a financial plan that will generate sufficient revenues for the day-to-day operation and annual PAYGO and make appropriate contributions to reserves. The City currently has a projected beginning cash balance of $0 in FY 2026.
Table 23 shows the proposed financial plan through the study period under the proposed option 2 rate plan. By adopting this plan, the City will maintain debt service coverage ratios (Figure 13) and fund balance needs (Figure 14) throughout the study period.
Table 23. Proposed Option 2 Financial Plan Pro Forma16
16 Note that the proposed financial plan includes the proposed capacity charge adjustment shown in this report in the Nonoperating revenues category Rate Increase 65.0% 25.0% 20.0% 20.0% 20.0% Rate Month Implemented 1-Jan 1-Jul 1-Jul 1-Jul 1-Jul
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Cash Position Opening Balance -$ 454,741 $ $ 364,303 $ 2,396,849 $ 5,124,052 Revenues
Sewer Rate Revenue $ 3,433,394 $ 3,450,192 $ 3,467,075 $ 3,484,041 $ 3,501,092 Adjusted Sewer Rate Revenue 1,115,853 $ $ 3,665,830 $ 5,113,935 $ 6,863,561 $ 8,976,801 Other Operating Revenue $ 1,225 -$ -$ -$ -$
Non-Operating Revenue $ 794,639 $ 173,319 $ 181,361 $ 189,775 $ 198,580 Total Revenues $ 5,345,111 $ 7,289,341 $ 8,762,370 $ 10,537,377 $ 12,676,473 Operating Expenses $2,633,460 $2,729,037 $2,828,309 $4,114,942 $4,248,788 Net Operating Revenue $ 2,711,651 $ 4,560,304 $ 5,934,061 $ 6,422,436 $ 8,427,685 Current Debt Service $ 245,327 $ 250,159 $ 255,182 $ 260,399 $ 231,631 Proposed Debt Service -$ 3,396,833 $ $ 3,396,833 $ 3,396,833 $ 5,660,143 Total Operating and Debt Service $ 2,878,787 $ 6,376,029 $ 6,480,325 $ 7,772,174 $ 10,140,563 Net Revenues Before CIP $ 2,466,324 $ 913,312 $ 2,282,046 $ 2,765,203 $ 2,535,911 Capital Expenditure $ 77,011,583 $ 1,003,750 $ 249,500 $ 38,000 $ 998,371 Grants $ 75,000,000 -$ -$ -$ -$
Cash $ 2,011,583 $ 1,003,750 $ 249,500 $ 38,000 $ 998,371 Net Income $ 454,741 $ (90,438) $ 2,032,546 $ 2,727,203 $ 1,537,540 Ending Balance $ 454,741 $ 364,303 $ 2,396,849 $ 5,124,052 $ 6,661,592 30 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 13. Updated Debt Service Coverage Ratio Under Status Quo and Proposed Option 2 Financial Plan Figure 14. Fund Balances Under Proposed Option 2 Rate Adjustments and Treatment Plant Proposal 31 City of Greenfield – 2025 Sewer Rate and Fee Study
2.13 Revenue Requirements
Table 24 displays the City’s revenue requirements for FY 2026. The total expense for is offset by other operating revenues and non-operating revenues to compute a pure portion of revenue requirements that need to be recovered from customers’ rates. For option 1, RDN proposes annual revenue adjustments of 65.0 percent, 5.0 percent, 5.0 percent, 5.0 percent, and 4.0 percent for FY 2026 through FY 2030, respectively, to reach the financial goals set by the City. For option 2, RDN proposes annual revenue adjustments of 65.0 percent, 25.0 percent, 20.0 percent, 20.0 percent, and 20.0 percent for FY 2026 through FY 2030, respectively, to reach the financial goals set by the City. The recommended adjustments will balance the budget and fund debt service requirements through the study period.
Table 24. Revenue Requirements for the Cost of Service Analysis Revenue Requirement FY 2026
Total Operating Expense $2,633,460
Non Operating Expense $2,256,910
Non-Operating Revenue -$631,250
Misc Revenue -$1,225
Net Balance From Operations -$824,501
Rate Revenue Requirement $3,433,394
32 City of Greenfield – 2025 Sewer Rate and Fee Study
3 COST OF SERVICE ANALYSIS
The purpose of a Cost of Service (COS) analysis is to allocate costs among customers commensurate with their service requirements. The Sewer system’s COS analysis utilizes a three‐step approach to allocate costs equitably among customers. These steps include 1) functionalization of costs, 2) cost classification, and 3) cost allocation to customers. Provided below is a detailed discussion of the Sewer COS analysis conducted for the City and the specific steps taken for the analysis.
3.1 Functionalization of Costs
The functions included in a Sewer study are:
• Customer Service – costs to provide billing and customer service • Sewer Flow – costs associated with the transmission of sewer flow • Treatment - the costs associated with the treatment of sewer represented by the following categories:
o Bio-Oxygen Demand (BOD)
o Total Suspended Solids (TSS)
• Administrative and General – costs not directly related to the other operating functions RDN carefully distributed each of the O&M expenses and the asset items into the City’s sewer system functions.
Table 25 and Table 26 show the allocation of the operating budget and the City’s sewer assets to the standard sewer functions, respectively.
Table 25. Percentage of Operating Costs Allocated to Standard Functions Category Allocation Percent
Customer Service $250,694 10.9%
Flow $645,747 28.0%
BOD $542,144 23.5%
TSS $542,144 23.5%
Admin and General $322,529 14.0%
Total O&M $2,303,257 100.0%
O&M Expense
Table 26. Percentage of Assets Allocated to Standard Functions Category Allocation Percent
Customer Service $0 0.0%
Flow $5,464,097 64.3%
BOD $1,438,993 16.9%
TSS $1,438,993 16.9%
Admin and General $150,434 1.8%
Total Assets $8,492,517 100.0%
Non-operating Expense
33 City of Greenfield – 2025 Sewer Rate and Fee Study
Once costs were functionalized, RDN further classified costs into service categories (cost causative components).
The cost causative components include:
• Customer Service – costs to provide billing and customer service • Sewer Flow – costs associated with the transmission of sewer flow • Treatment - the costs associated with the treatment of Sewer represented by the following categories:
o Bio-Oxygen Demand (BOD)
o Total Suspended Solids (TSS)
Table 27 and Table 28 show the percentage of the functionalized operating costs and asset values allocated to cost causative components, respectively. Administrative and general costs are allocated based on the percentage of costs allocated to each component based on the total cost of the other categories.
Table 27. Percent of Operating Costs Allocated to Cost Causative Components Category Allocation Flow BOD TSS Customer
Service
Customer Service $250,694 0.0% 0.0% 0.0% 100.0%
Flow $645,747 100.0% 0.0% 0.0% 0.0%
BOD $542,144 0.0% 100.0% 0.0% 0.0%
TSS $542,144 0.0% 0.0% 100.0% 0.0%
Admin and General $322,529 32.6% 27.4% 27.4% 12.7%
Total Allocation 32.6% 27.4% 27.4% 12.7%
Table 28. Percent of Asset Values Allocated to Cost Causative Components Category Allocation Flow BOD TSS Customer
Service
Customer Service $0 0.0% 0.0% 0.0% 100.0%
Flow $5,464,097 100.0% 0.0% 0.0% 0.0%
BOD $1,438,993 0.0% 100.0% 0.0% 0.0%
TSS $1,438,993 0.0% 0.0% 100.0% 0.0%
Admin and General $150,434 65.5% 17.2% 17.2% 0.0%
Total Allocation 65.5% 17.2% 17.2% 0.0%
Table 29 shows the revenue requirements allocated based on the percentages shown above. The total allocation is used to distribute other revenues and net balances.
Table 29. Revenue requirements allocated to Cost Components Category Total Flow BOD TSS Customer
Service
O&M Revenue Requirements $2,633,460 $858,547 $720,802 $720,802 $333,308 Percent 32.6% 27.4% 27.4% 12.7%
Non-Operating Revenue Requirements $2,256,910 $1,478,285 $389,313 $389,313 $0 Percent 65.5% 17.2% 17.2% 0.0%
Total Allocation 47.8% 22.7% 22.7% 6.8%
34 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 30 shows the results of the cost of service analysis. The total rate revenue requirements are allocated to cost components that will be used to complete the rate design.
Table 30. Total Cost of Service Allocated to Cost Components Category Total Flow BOD TSS Customer
Service
O&M Revenue Requirements $2,633,460 $858,547 $720,802 $720,802 $333,308 Non-Operating Revenue Requirements $2,256,910 $1,478,285 $389,313 $389,313 $0 Total $4,890,370 $2,336,832 $1,110,115 $1,110,115 $333,308 Total Allocation 47.8% 22.7% 22.7% 6.8%
Other Operating Revenue -$1,225 -$585 -$278 -$278 -$83
Non-Operating Revenue -$631,250 -$301,639 -$143,294 -$143,294 -$43,023 Net Balance From Operations -$824,501 -$393,982 -$187,162 -$187,162 -$56,195 Rate Revenue Requirement $3,433,394 $1,640,626 $779,381 $779,381 $234,006 35 City of Greenfield – 2025 Sewer Rate and Fee Study
4 RATE DESIGN
The City’s rates are comprised of a fixed monthly service charge assessed through customer bills and a fixed charge based on the number of units which make up each billing unit. RDN recommends that the City implement a rate structure which incorporates both a fixed charge based on the number of annual bills, and a variable charge which is based on monthly water use characteristics by customer class. In the proposed rates, all customer service costs will be directly allocated to the fixed charge. In addition to the customer service costs, a portion (20 percent) of the flow and treatment costs will also be allocated to the fixed charge to account for the fixed nature of sewer cost accrual. Table 31 shows the cost components allocated to either the fixed or variable charge.
Table 31. Cost Components Allocated to Fixed and Variable Charges Cost Component Total Fixed
Charge
Variable
Charge
Flow $1,640,626 $328,125 $1,312,500
BOD $779,381 $155,876 $623,505
TSS $779,381 $155,876 $623,505
Customer Service $234,006 $234,006 $0
Total $3,433,394 $873,884 $2,559,510
4.1 Fixed Rate Derivation
Fixed rates are derived by dividing the total costs to be recovered through fixed revenue by the total bills in a year.
The calculation used to determine the number of bills in a year is shown in Table 32. The total number of bills equals the total number of customers times 12 months, the total number of bills that a customer receives.
Table 32. Count of Bill Calculation
Customers Months Total Bills
3,434 x 12 = 41,208
Table 33 shows the calculation used to determine the cost of service based fixed charge.
Table 33. Cost of Service Fixed Charge Derivation
Fixed Cost Total Bills Fixed Charge
$873,884 ÷ 41,208 = $21.21
To produce the proposed rate structure, the cost of service based rates are multiplied by the proposed annual revenue adjustment. Table 34 and Table 35 show the proposed fixed charges for the study period for option 1 and option 2, respectively. The proposed Fixed charges for FY 2026 should be implemented January 1, 2026, all other charges should be implemented on July 1, or the beginning of the respective fiscal year.
Table 34. Proposed Option 1 Fixed Charges (per month)
65% 5% 5% 5% 4%
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Fixed Rate $34.99 $36.74 $38.58 $40.51 $42.13
36 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 35. Proposed Option 2 Fixed Charges (per month)
65% 25% 20% 20% 20%
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Fixed Rate $34.99 $43.74 $52.49 $62.98 $75.58
4.2 Variable Rate Derivation
Variable rates were developed by dividing the total costs allocated to variable cost recovery by the total projected sewer flow from customers. The City’s treatment plan receives on average 1.16 million gallons per day throughout the year, which is equal to approximately 422.5 million gallons per year17. Based on FY 2025 treatment plant data provided by City staff, the highest inflow month is September, where inflow averages 1.2 million gallons a day, and the lowest month is January, when inflow averages 1.08 million gallons per day. In order to determine the total billable Sewer flow, RDN calculated the Inflow and Infiltration (I&I) ratio by dividing the highest flow month by the lowest flow month, which resulted in an I&I percentage of approximately 11.1 percent. Customer flows were estimated based on water use calculations provided by City staff. Table 36 shows the total annual water use by customer class in gallons.
Table 36. Customer Water Use (Gallons) by Customer Class18 Customer
Class
Class
Code
Water Use
(Gallons)
Apt/Duplex 1 23,948,351
Apartment 2 55,569,717
Churches 4 2,032,215
Commercial 5 44,481,249
Fire Protection 6 2,122,017
Governmental 7 1,816,289
Hydrant 8 3,020,039
Irrigation 9 27,605,100
Industrial 10 21,282,474
Hotel 11 3,099,712
Out of City 12 189,696
Residential 13 368,736,262
Schools 14 17,103,676
Trailer Park 15 4,985,000
Park 17 56,656,697
Total 632,648,494
Some customer classes do not produce sewer flow because their water use is primarily spent outdoors, such as irrigation and park accounts, these accounts were not used to determine individual flows. Table 37 shows the customer classes which were used to determine total Sewer flows. 17 City of Greenfield, 2025 Monthly WWTP Flow Report
18 City of Greenfield, 2025 Billed Consumption Report
37 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 37. Aggregate Customer Class and Applicable Water Use Calculation Customer Class Class
Codes
Water Use
(gallons)
MFR 1,2 79,518,068
Com/Inst 4,5,7 48,329,753
Ind 10 21,282,474
Hotel/Motel/TP 11,15 8,084,712
Schools 14 17,103,676
OOC 12 189,696
SFR 13 368,736,262
Total Applicable Water Use 543,244,641
The total water use shown in Table 37 is higher than the total flow to the treatment plant because of outdoor water use by residential customers, due to these customers not having a dedicated irrigation meter. To determine residential sewer flows, a mass balance analysis was performed. A mass balance analysis is used to estimate unknown treatment plant flow values based on known values. For the purposes of this analysis, it is assumed that all non-residential customer classes contribute 100 percent of their water use to sewer flow because separate irrigation meters, park meters, and fire protection meters have been removed from the applicable water use calculation. Table 38 shows the results of the mass balance. The total sewer flow produced by non-single family residential customers is summed, and the remaining treatment plant balance is applied to single family residential customers.
Table 38. Mass Balance Analysis19
Customer Class Flow (mgd) Flow
(gallons)
Total Flow 1.16 422,487,500
I&I 0.13 46,943,056
Multi-Family Residential 0.22 79,518,384
Commercial/Institutional 0.13 48,309,580
Industrial 0.06 21,282,844
Hotel/Motel/RV 0.02 8,084,384
Schools 0.05 17,103,768
Out of City 0.00 0
Subtotal Non-residential 0.61 221,242,016
Residential 0.55 201,245,484
The City bills water use in increments of 1,000 gallons. The proposed sewer variable charge will be based on the same billing increment. To derive the sewer variable charge, total variable costs are divided by the estimated billable sewer flow (total plant flow minus I&I). Table 39 shows the calculation used to determine the cost of service based variable charge. Since outdoor water use is excluded from the calculation for residential customers, a monthly cap of 5,000 gallons should be placed on residential variable charges. 5,000 gallons reflects the average monthly residential Sewer flow based on the mass balance analysis (total flow, divided by number of customers, divided by 12 months). Non-residential Sewer customers will have no cap on their variable charges. 19 Note that the Out of City Customer is no longer billed by the City 38 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 39. Cost of Service Variable Charge Derivation
Variable Cost Billable Flow Variable Charge
$2,559,510 ÷ 375,544 = $6.82
To produce the proposed rate structure, the cost of service based rates are multiplied by the proposed annual revenue adjustment. Table 40 and Table 41 show the proposed variable charges for the study period for option 1 and option 2 respectively. The proposed variable charges for FY 2026 should be implemented January 1, 2026, all other charges should be implemented on July 1, or the beginning of the respective fiscal year.
Table 40. Proposed Option 1 Variable Charges (per 1,000 gallons) 65% 5% 5% 5% 4%
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Variable Rate $11.25 $11.81 $12.40 $13.02 $13.54
Table 41. Proposed Option 2 Variable Charges (per 1,000 gallons) 65% 25% 20% 20% 20%
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Variable Rate $11.25 $14.06 $16.87 $20.24 $24.29
The proposed rates increase the overall equity of the City’s sewer rates by allocating costs to each customer based on their overall sewer flow. Particularly due to the heterogeneous nature of non-residential customers, variable rates based on actual monthly water use will ensure that each customer is paying their fair share of sewer costs, rather than costs based on averages across the customer class.
4.3 Bill Impacts
RDN performed a bill impact analysis. Note that the bill impact shown below only reflects the Test Year (FY 2026) rates.
Customers Bill Impact
This analysis compares the rate per billing unit under current and proposed rates. Figure 15 presents current versus proposed monthly bills for Single Family Residential customers. Single Family Residential customers have a cap of 5,000 hcf on monthly water use so will have a maximum monthly bill of $91.22. Since option 1 and option 2 have the same initial adjustments, the impact on customers will be the same in the first year of increase. 39 City of Greenfield – 2025 Sewer Rate and Fee Study
Figure 15. Current vs. Proposed Rates for Residential Customers with 1 Unit, FY 2026 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $63.36 $34.99
$46.24
$57.48
$68.73
$79.97
$91.22 $91.22 $91.22 $91.22 $91.22 $91.22
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
$90.00
$100.00
0 1 2 3 4 5 6 7 8 9 10
Current Proposed Water Use (1,000 gallons)
Figure 16 compares the current versus proposed total allocation for Non-residential customers. Non-residential customers will be billed for all water use; thus, customers who use more water will face a larger impact on their rates. The current rates shown are based on a customer who has three ERUs under the current rates. Under the proposed rates, the City will no longer count ERUs, rather there will be one fixed charge and a variable charge based on water use.
Figure 16. Non-Residential Customer Impacts with Three Units, FY 2026 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $179.80 $34.99
$91.22
$147.45
$203.67
$259.90
$316.13
$372.36
$428.58
$484.81
$541.04
$597.27
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
0 5 10 15 20 25 30 35 40 45 50
Current Proposed Water Use
40 City of Greenfield – 2025 Sewer Rate and Fee Study
5 PROPOSED SEWER CAPACTIY CHARGES
Capacity Charges are designed to ensure that current customers are not paying to maintain or develop capacity for new customers joining the Sewer system. To develop capacity charges, first, system asset value is divided by the corresponding system capacity (number of current units), then, future capacity developing PAYGO is divided by future capacity (number of projected units), finally, the two components, buy-in value and incremental value are summed. The following section describes each of these steps in detail.
5.1 System Demand
The Buy-in approach uses current system demand as the denominator in the Capacity Charge calculation. For the Sewer system, demand was determined by counting the number of current billed units. Table 42 shows the total number of customer and corresponding units for each customer class.
Table 42. Current Sewer Units
Customer Class Accounts Units
Single Family Residential 3,186 3,442
Multi-Family Residential 67 732
Commercial/Institutional 157 234
Industrial 13 13
Hotel/Motel/RV 6 77
Schools 5 91
Total 3,434 4,589
5.2 System Valuation
The sewer system asset list consists of assets purchased and depreciating since 1971. The total original cost of sewer assets is $17.2 million. The sewer assets have accumulated approximately $8.7 million in depreciation since they were originally built, leaving the net book value of system assets at $8.5 million. If the City were to replace their current assets at today’s value, the total cost to replace these assets would be approximately $38.0 million.20 The RCLD valuation of the Sewer system is thus $15,577,672. Sewer system valuation details are shown in Table
43. Table 43. Sewer System Asset Valuation
Description Original Cost Accumulated
Depreciation Net Book Value Replacement Cost Replacement Cost Less Deperciation Total Asset Value $17,174,726 $8,682,209 $8,492,517 $37,986,594 $15,577,672 To ensure equity between current and future customers, adjustments are made to the total buy-in value of the system. Generally speaking, asset values include any reserves held by a utility. Additionally, outstanding debt principal and previously collected impact fee revenue are removed from the asset value calculation. Table 44 shows the calculation used to determine the system value which new customers are buying into. 20 Replacement cost values are based on the increase of the Engineering News Records Construction Cost Index (ENR CCI) between the date that the individual asset was built and today. 41 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 44. Sewer System Valuation Calculation
Category Cost
Asset Value $15,577,672
Debt Principal -$1,842,954
Fee Revenue -$3,068,094
System Buy-in Value $10,666,624
5.3 Buy-in Fee Calculation
To calculate the Buy-in portion of the Sewer Capacity Charge RDN divided the RCLD sewer system value in Table 44 by the total units shown in Table 42. This calculation yields a buy-in per unit equivalent Capacity Charge of $2.324.49 and is shown in Table 45.
Table 45. Buy-in Fee Calculation for Sewer System (per unit) Sewer System Value (RCLD) $10,666,624
Units of service 4,589
Buy-in Fee $2,324.49
Buy-in Calculation
5.4 Future Demand
The planning horizon used for the capacity charge incremental fee portion is based on the City’s 2021 Wastewater Treatment Plant Master Plan.21 The projected 2040 population is 30,050, which is 8,630 greater than 2025. On average there are 4.7 people per SRU (PPSRU) based on the current population and SRU count. Based on the projected 2040 population, an additional 1,849 SRUs will be built during the next 15 years, approximately 29 percent growth. Table 46 summarizes the population and unit growth during the planning period used for this study. The numbers in red are estimated based on values given in the master planning report.
Table 46. Future SRUs Based on Master Plan Growth Projection Year Population SRUs PPSRU
2025 21,420 4,589 4.67
2040 30,050 6,438 4.67
Difference 8,630 1,849
5.5 Capital Improvement Plan
The City plans to complete approximately $1.0 million a year in rate funded capital expenditures. Near-term (FY 2026 through FY 2035) capital improvements total $10.7 million. Future capital expenditures are projected to maintain a similar level of funding. Capital expenditure projections for FY 2036 to FY 2040 are $6.1 million, or $1.2 million per year.
21 City of Greenfield Wastewater Treatment Plant Master Plan. May 2021. Carollo. 42 City of Greenfield – 2025 Sewer Rate and Fee Study
Table 47. Projected Study Period Rate Funded Capital Expenditures Period Capital
Expenditures
FY 2026 to FY 2035 $10,673,492
FY 2036 to FY 2040 $6,108,180
Total CIP $16,781,671
Not all capital expenditures are completed to accommodate growth. Some capital, especially near-term, is used to maintain the system for current users. RDN calculated a percentage of near-term capital expenditures attributable to future growth based on the percentage of future customers compared to current (28.7 percent).
Table 48 shows the percent of CIP attributable to future growth.
Table 48. Percent of Planned Capital Expenditures Attributed to Future Growth Period Total Capital
Expenditure
Percent to
growth
Growth Related
Capital
FY 2026 to FY 2035 $10,673,492 28.7% $3,065,299
FY 2036 to FY 2040 $6,108,180 100.0% $6,108,180
Total $16,781,671 $9,173,479
5.6 Incremental Fee Calculation
To calculate the incremental portions of the Sewer Capacity Charge RDN divided the projected capital expenditures attributable to future growth value in Table 48 by the additional units shown in Table 46. This calculation yields an incremental unit equivalent Capacity Charge of $4,961.85 and is shown in Table 49.
Table 49. Incremental Fee Calculation for Sewer System (per unit) Capital Projects $9,173,479
Incremental Growth 1,849
Incremental Fee $4,961.85
Incremental Calculation
The proposed capacity charge is calculated by adding the buy-in fee to the incremental fee. Table 50 shows the proposed Capacity Charges. When a new customer joins the sewer system, city engineers should determine how that customer will impact the system compared to a single-family dwelling unit. A capacity charge for non-single family developments should be based on an increment of 60,000 gallons of annual sewer flow (Table 38). The proposed capacity charge should be multiplied by the estimated SRUs to determine the charge for each specific project.
Table 50. Proposed Sewer Capacity Charges
Buy-in Fee $2,324.49
Incremental Fee $4,961.85
Capacity Charge $7,286.34
Capacity Fee Calculation
Finally, RDN recommends that the District continue to update the Capacity Charges each year to keep pace with construction cost inflation. RDN recommends applying the annual adjustment (increase or decrease) in the CDGS 43 City of Greenfield – 2025 Sewer Rate and Fee Study
California CCI22. Additionally, we recommend that the City conduct a review of the Charge every four to five years or when there are significant changes in the physical system, planned capital projects, pace of new development, or other major changes.
22 California Department of General Services Construction Cost Index. https://www.dgs.ca.gov/RESD/Resources/PageContent/Real-Estate-Services-Division-Resources-List-Folder/DGS-California-Construction-Cost-Index-CCCI 44 City of Greenfield – 2025 Sewer Rate and Fee Study
6 CONCLUSION
RDN recommends the following changes and modifications to the current rates and fees based on the findings of the Study:
• Adopt the proposed financial plan which will allow the City to build and maintain a new Sewer Treatment Plant
• Adjust revenues each year of the study period based on which wastewater treatment plant (WWTP) funding option is required
o Option 1 - 65.0 percent in January 2026, 5.0 percent in July 2026, 5.0 percent in July 2027, and
5.0 percent in July 2028 and 4.0 percent in July 2029 to ensure compliance with planned debt issuance requirements by the end of the study period (FY 2030). o Option 2 - 65.0 percent in January 2026, 25.0 percent in July 2026, 20.0 percent in July 2027, July 2028, and July 2029 to ensure compliance with planned debt issuance requirements by the end of the study period (FY 2030).
• Realign the cost allocation for customers based on the Cost of Service analysis. • Discontinue rates based on ERU counts and bill a single fixed charge to each customer account • Implement variable rates for all customers based on 1,000 gallon increments of water use • Cap variable rates for single family residents based on the average Sewer flow of 5,000 gallons • Institute a variance process for non-single family residential customers who use significant amounts of water which does not go to the treatment plant
• Develop Capacity Charges which increase the equitable distribution of holding/developing capacity for new customers
• Annually adjust Capacity Charges based on the California Department of General Services California Construction Cost Index
Proposed Sewer Rates
RDN recommends that the City implement a Sewer rate structure which includes both a fixed and variable component. Fixed rates will be applied equally to all customers and will be assessed at one per account per month.
Variable rates will be billed in 1,000 gallons increments based on each customer’s monthly water use. Variable rates for single family residential customers will be capped at 5,000 gallons of water use per month to reflect the average indoor sewer flow from those customers. The rates for non-single family residential customers will not be capped; however, if a non-residential customer uses significant amounts water that is not delivered to the treatment plant, the sewer variable rate should reflect that though a variance process. The recommended rates allow the City to maintain healthy reserve fund balances, maintain planned debt service requirements and execute necessary capital improvement projects over five-year study period. In addition to the proposed revenue adjustments, the proposed rates reallocate the City’s costs based on a detailed COS analysis which increases the equitability of the proposed rates by allocating City costs based on the relative wear each customer places on the system based on the total Sewer flow attributed to the customer class. Thus, each customer will have different overall rate adjustments. Proposed option 1 annual revenue adjustments presented in this Study are 65.0 percent in January 2026, 5.0 percent in July 2026, July 2027, and July 2028, and 4.0 percent in July 2029. The proposed 45 City of Greenfield – 2025 Sewer Rate and Fee Study
option 1 adjustments will balance the budget at the end of the five-year study period. Table 51 and Table 52 show the proposed option 1 revenue adjustments and rates for the study period, respectively.
Table 51. Proposed Option 1 Revenue Adjustments
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue Adjustment 65.0% 5.0% 5.0% 5.0% 4.0%
Table 52. Proposed Option 1 Sewer Rates
Rate Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Fixed Charge $34.99 $36.74 $38.58 $40.51 $42.13
Variable Charge (per 1,000 gallons) $11.25 $11.81 $12.40 $13.02 $13.54 Proposed option 2 annual revenue adjustments presented in this Study are 65.0 percent in January 2026, 25.0 percent in July 2026, and 20 percent in July 2027, July 2028, and July 2029. The proposed adjustments will balance the budget at the end of the five-year study period. Table 53 and Table 54 show the proposed option 2 revenue adjustments and rates for the study period, respectively.
Table 53. Proposed Option 2 Revenue Adjustments
FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Revenue Adjustment 65.0% 25.0% 20.0% 20.0% 20.0%
Table 54. Proposed Option 2 Sewer Rates
Rate Category FY 2026 FY 2027 FY 2028 FY 2029 FY 2030
Fixed Charge $34.99 $43.74 $52.49 $62.98 $75.58
Variable Charge (per 1,000 gallons) $11.25 $14.06 $16.87 $20.24 $24.29 Proposed Capacity Charges
Table 55 shows the proposed Sewer Capacity Charges which are designed to both reimburse current customers for the additional capacity, which is being carried in the sewer system, as well as ensure that new customers are paying for the additional capacity produced by future rate funded capital improvement projects. When a new customer joins the sewer system, city engineers should determine how that customer will impact the system compared to a single family dwelling unit. A single family dwelling unit was determined to generate an average of 5,000 gallons of sewer on a monthly basis, thus one SRU for non-single family development should be based on an increment of 60,000 gallons of annual sewer flow. The proposed capacity charge should be multiplied by the estimated SRUs to determine the charge for each specific project.
Table 55. Proposed Sewer Capacity Charges
Connection Fee Unit Fee
Capacity Charge Standard Residential Unit $7,286.34
46 City of Greenfield– 2025 Sewer Rate and Fee Study