WASTEWATER RATE
STUDY
City of Grover Beach
Presented By:
Clayton Tuckfield PE
Tuckfield & Associates
March 2025
Purpose of Rate Study
• Evaluate sufficiency of existing sewer revenues to:
• Provide funding for current and future operation and
maintenance expenses and capital improvement spending
• Meet minimum reserve level requirements
• Meet legal obligations associated with outstanding debt (debt coverage ratio)
• Develop rates which will generate sufficient revenue to meet cost of providing essential services
2 3
• On-going financial support for the enterprise system
• O&M expenses continue to increase (benefits, electricity, chemicals, G&A) • Maintain cash reserves at appropriate levels (operating and capital) • Capital needs of the wastewater system (system replacements, improvements) • New debt is proposed to pay for needed capital improvements • $4.2M in FY 25-26
• $1.8M in FY 27-28
• $1.6M in FY 29-30
• New debt will require debt service payments and will require sewer fund to meet minimum debt service coverage ratios
Why Are Rates Changing?
Wastewater Capital Improvement Program
4 Project FY24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Sewer Upgrade/Future Flows $706,000 $550,000
Front St Lift Station Upgrades $50,000 $200,000
Sewer Upgrade/Existing Flow $3,900,000 $2,700,000 $630,000 $2,000,000 S. Oak Park Lift Station Upgr. $190,000
Replace Damage Storm Drain $160,000
Nacimiento Lift Station Upgr. $130,000 $400,000 $3,100,000 Nacimiento Manhole Upgr. $20,000
Total $756,000 $4,650,000 $320,000 $3,100,000 $790,000 $2,020,000 5 Wastewater Financial Plan
17.8% Increases for 5 years
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 $ millions
O&M New Debt Capital Spending
Reserves Rev w/ Incr Rev w/o Incr
End of Year Cash Reserves
Versus Target Reserves
Wastewater Enterprise
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 $ millions
End of Year Cash Reserves Target Reserves
Rates implemented July 1 of each year. Target Reserves = 6 mo. O&M plus $500k CIP Spending 6 Five-Year Projection
of SFR Wastewater
Bi-monthly Bill
SFR Bi-monthly Wastewater Bill with
Treatment Charges Included
• For FY 2025-26 Wastewater Rates
will increase:
• $2.28 Monthly
• $4.56 Bi-Monthly
Proposed
SFR Charges Current FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Fixed Charges $25.64 $30.20 $35.58 $41.92 $49.38 $58.16 SSLOCSD Charge $50.96 $50.96 $50.96 $50.96 $50.96 $50.96 Fixed Charges $76.60 $81.16 $86.54 $92.88 $100.34 $109.12 Dollar Change $4.56 $5.38 $6.34 $7.46 $8.78
Percent Change 6.0% 6.6% 7.3% 8.0% 8.8%
$76.60 $81.16
$86.54
$92.88
$100.34
$109.12
$0
$20
$40
$60
$80
$100
$120
Current FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Fixed Charges
7 Wastewater Bill Comparison with Other Communities
$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 Avila Beach CSD
Morro Bay
Cayucos CSD
Cambria CSD
San Luis Obispo
Paso Robles
Pismo Beach
Atascadero
Grover Beach July 1, 2025 Bill
Grover Beach Current Bill
Oceano CSD
Arroyo Grande
8 Proposed Timeline and Next Steps
Event Date
Rate Study Introduction March 24
City Council Authorization April 14
Last Day to Mail Proposition 218 Notices April 25
Public Hearing June 9
Implement new Rates July 1, 2025
QUESTIONS?
[email protected]
Clayton Tuckfield PE
Tuckfield & Associates
Background
GROVERBEACH.ORG
• Private septic tank systems before
1965
• Core sewer system constructed in
1965 - now 60 years old
• Served 3,600 residents in 1965
• Did not include properties in the
northern portion of city or industrial
area south of Farroll Road
• Industrial area still mostly served by
private septic systems with connection
to City sewer now required
Background
GROVERBEACH.ORG
• City’s sewer collection
system today includes:
35 miles of gravity
sewer mains - 6 to 12-
inches in diameter
Three sewer pump
stations
• Two private sewer pump
stations (Mar Brisa, State
Park)
Sewer System Master Plan
GROVERBEACH.ORG
• Sewer Master Plan: model system, evaluate deficiencies, identify projects and cost, prioritize improvements
• Initial Master Plan developed in 2006 with updated plan in 2018 • Improvements made over time though needs have also increased over time • Significant cost escalation since 2018 with construction projects and inflation • $15 million now needed in capital improvements and system upgrades • Most of this need tied to existing deficiencies caused by aging infrastructure and population growth prior to 2018
10 projects to address
existing deficiencies
• Example:
• Upgrade sewer
main on N. 9th
from 8-inch to
10-inch
• Needed work
before K-14
street repair
project