Agenda packet, regular meeting — Healdsburg City Council, June 21, 2022 (part 2 of 4)

PASSED, APPROVED AND ADOPTED, this 21st day of June 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
__________________________________ ___________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Packet Pg. 134 Attachment: Resolution - Amended NW Trail Easement Acceptance (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Resolution No. XX-2022

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EXHIBIT A

AMENDED NORTHWEST TRAIL EASEMENT

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Packet Pg. 135 Attachment: Resolution - Amended NW Trail Easement Acceptance (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended OAK #4854-9168-4638 v2

RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attn: City Clerk
The City of Healdsburg is Exempt from Recording Fees
(Government Code §27383), and Building Homes & Jobs
Trust Fund Fee (Govt. Code §27388.1(a) (2) (D)).

Assessor’s Parcel #(s):

Space above this line reserved for County Recorder’s use

AMENDED NORTHWEST TRAIL EASEMENT
(PARCEL 1 – SAGGIO HILLS)
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, as of this ____ day of ____________, 2022 (“Effective Date”), OLIVE & OAKS, LLC, a Delaware limited liability company (“Grantor”), owner of certain real property situated in the City of Healdsburg, County of Sonoma, State of California, and legally described as Parcel 1 of Saggio Hills per Map recorded May 23, 2018, in Book 795 of Maps at Pages 31-40, as Instrument No. 2018-037508, in the Official Records of Sonoma County, State of California (“Property”), hereby GRANTS AND CONVEYS to the CITY OF HEALDSBURG, a California municipal corporation (“Grantee”), its successors and assigns, and all those taking by, under or through Grantee, a permanent, nonexclusive easement in gross to enter in, on, over, under and upon, exit from, traverse, and otherwise use the area of the Property legally described in Exhibit “A” and depicted in Exhibit “B” attached hereto and incorporated herein by this reference (the “Easement Area”) for Access Purposes, and the Easement Area plus five feet (5’) on either side of the Easement Area (the “Construction and Maintenance Easement Area”) for Construction and Maintenance Purposes (collectively, the “Easement”). Grantor and Grantee are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

The Easement Area shall be used only for Access Purposes and the Construction and Maintenance Easement Area shall only be used for Maintenance Purposes (collectively, “Easement Rights”). “Access Purposes” means use of the Easement Area as a public pedestrian and hiking corridor and right of way for pedestrian, hiking and associated uses. “Maintenance Purposes” means use of the Construction and Maintenance Easement Area for Construction and Maintenance Work or Routine Maintenance Work as defined herein. “Construction and Maintenance Work” means installing, constructing, improving, repairing, replacing, reconstructing, inspecting, and maintaining (and any work performed in connection therewith), a paved and/or gravel trail for public pedestrian and hiking access, ingress and egress, related drainage improvements, any and all underground utility lines and fixtures for utilities such as water, lighting, emergency telephone call boxes, and other improvements. “Routine

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Packet Pg. 136 Attachment: Amended_Northwest_Trail_Easement_(Parcel 1 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 2 OAK #4854-9168-4638 v2
Maintenance Work” means litter removal, graffiti removal, cleaning, power washing, painting, bulb replacement and electrical repairs. Grantee shall cause all improvements within the Easement Area to be designed, constructed, installed and maintained in accordance with all applicable codes and regulations.

No equestrian uses, bicycles, motorcycles or motorized vehicles shall be permitted to use the Easement Area or Construction and Maintenance Easement Area, save and except for public safety and emergency vehicles (police, fire and ambulance services), and normal construction and maintenance vehicles.

Grantee shall operate, maintain and use the Easement Area and Construction and Maintenance Easement Area with reasonable diligence and care, keep it free of trash and in good condition and repair. Grantee or its designee will in good faith take reasonable steps to resolve any damage or maintenance issue that Grantor brings to Grantee’s attention that relates to improvements constructed and installed on the Property that are impacted by improvements or activities on the Easement Area.

Grantee agrees to indemnify, defend with counsel selected by Grantee, and hold harmless Grantor, its officers, officials, employees, agents, and volunteers (“Indemnitee”), from and against any and all loss, claims, suits, liabilities, actions, damages, or causes of action of every kind, nature and description (“Liabilities”), directly or indirectly arising from any act or omission of City, its employees, agents, or independent contractors in connection with Grantee’s exercise of Easement Rights on the Easement, save and except such Liabilities caused by the sole negligence or willful misconduct of an Indemnitee.

Grantor shall operate, maintain and use the Property with reasonable diligence and care, keep it free of trash and in good condition and repair. Grantor or its designee will in good faith take reasonable steps to resolve any damage or maintenance issue that Grantee brings to Grantor’s attention that relates to improvements constructed and installed on the Easement Area that are impacted by improvements or activities on Grantor’s Property.

Grantor may, with the prior consent of Grantee, intermittently close portions of the Easement Area during construction activities on the Property, if, and for so long as, public safety concerns warrant as determined by Grantee.

Grantor warrants to Grantee that:

A. The Easement Area and Construction and Maintenance Easement Area are, as of the date this Easement is executed, free and clear of all liens or, if it is not, that Grantor has obtained and will record before or concurrently with the recording of this Easement, a legally binding subordination of any mortgage, lien, or other encumbrance affecting the Easement Area and Construction and Maintenance Easement Area as of the date of this Easement.

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Packet Pg. 137 Attachment: Amended_Northwest_Trail_Easement_(Parcel 1 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 3 OAK #4854-9168-4638 v2
B. To the best of Grantor’s actual knowledge, no one has the legally enforceable right (for example, under a lease, easement or right-of-way agreement in existence as of the date this Easement is executed by Grantor) to prevent the use of the Easement burdening the Easement Area and Construction and Maintenance Easement Area for the purposes contemplated by Grantee herein.

C. To the best of Grantor’s knowledge, the Easement Area and Construction and Maintenance Easement Area are not contaminated with materials identified as hazardous or toxic waste under applicable federal or state law and no such materials have been stored or generated within the Easement Area or Construction and Maintenance Easement Area, nor does Grantor have a reasonable basis, as of the date of this Easement, to suspect that such contamination may have occurred previously.

Grantee may assign any of its rights and responsibilities hereunder to design, install, construct, improve, repair, replace, reconstruct, operate, maintain and use the Easement, as permitted herein, to another public entity whose purpose includes the use, operation and maintenance of publicly accessible pedestrian and hiking trails as determined by City (hereinafter, the “Assignee”). Grantee and Assignee shall execute and record an agreement in the official records of Sonoma County wherein Grantee shall assign all rights and obligations of Grantee under this Easement to Assignee, and Assignee shall assume all rights and obligations of Grantee under this Easement and agree to be bound by the terms and conditions set forth in this Easement.

The benefits and burdens of this Easement shall run with the title to the Property and shall inure to the benefit of and bind the Parties hereto, and each of them, as well as their respective heirs, assigns and successors in interest.

Each Party shall have the right (but not the obligation) to prosecute any proceedings at law or in equity against any other Party, or any other person or entity, violating or attempting to violate or defaulting in the performance of any of the provisions contained in this Easement in order to prevent such party, person or entity from violating or attempting to violate or defaulting in the performance of any of the provisions of this Easement or to recover damages for any such violation or default. It is agreed that damages would be an inadequate remedy for violation of this Easement by any Party and, therefore, injunctive or other appropriate equitable relief shall be available to the other Party. The remedies available shall include, by way of illustration but not limitation, ex parte applications for temporary restraining orders, preliminary injunctions and permanent injunctions enjoining any such violation or attempted violation or default, and actions for specific performance of this Easement. The result of every action or omission whereby any covenant, condition or restriction herein contained is violated in whole or in part is hereby declared to be and to constitute a nuisance, and every remedy allowed by law or equity against any party, either public or private, shall be applicable against every such result and may be exercised by any Party.

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No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Easement shall be construed to be a waiver of any succeeding breach of the same or other terms, covenants, agreements, restrictions or conditions hereof.

In the event that any action is brought by either Party hereto as against the other Party for the enforcement or declaration of any right or remedy in or under this Easement or for the breach of any covenant or condition of this Easement, venue for any proceeding to enforce or interpret this Easement shall be in the Superior Court of the County of Sonoma, State of California, and the prevailing Party shall be entitled to recover, and the other Party agrees to pay (in addition to any other relief that may be granted) all fees and costs to be fixed by the court therein including, but not limited to, reasonable attorneys’ fees.

Notwithstanding anything in this Easement to the contrary, including rights of the general public to use the Easement Area for Access Purposes, nothing herein is intended to create any third party benefit and there are no third party beneficiaries of this Easement or the Easement Rights.
[SIGNATURE PAGE TO FOLLOW]

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Packet Pg. 139 Attachment: Amended_Northwest_Trail_Easement_(Parcel 1 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 5 OAK #4854-9168-4638 v2
IN WITNESS WHEREOF, the Parties hereto have executed this Easement as of the Effective Date first written above.

GRANTEE:

CITY OF HEALDSBURG,
a California municipal corporation
By:

Name: Jeff Kay
Its: City Manager
Date:

APPROVED AS TO FORM:

By:

Samantha Zutler, City Attorney
GRANTOR:

OAKS & OLIVES, LLC, a Delaware limited
liability company
By:

Name: ______________________________
Its: _________________________________
Date:

APPROVED AS TO FORM:

By:

Grantor Attorney

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Packet Pg. 140 Attachment: Amended_Northwest_Trail_Easement_(Parcel 1 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of OAK #4854-9168-4638 v2
EXHIBIT “A”

LEGAL DESCRIPTION OF EASEMENT AREA
[to be inserted]
EXHIBIT “B”

DEPICTION OF EASEMENT AREA
[to be inserted]

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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property situated in the City of Healdsburg, County of Sonoma, State of California, conveyed by AMENDED NORTHWEST TRAIL EASEMENT, dated ___________, 2022 (“Easement Deed”), from Oaks & Olives, LLC, a Delaware limited liability company (“Grantor”), to CITY OF HEALDSBURG, a California municipal corporation (“Grantee”), is hereby accepted by the undersigned officer or agent on behalf of the Grantee, pursuant to authority conferred by Resolution No. _____________, adopted by the City Council of the City of Healdsburg on ___________, 2022, and the Grantee consents to recordation of the Easement Deed by its duly authorized officer.

CITY OF HEALDSBURG,
a California municipal corporation
By:

Name: Jeff Kay
Its: City Manager
Date: ______________________, 2022

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Attachment: Exhibits A anb B (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Easements at Saggio Hills)

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Attachment: Exhibits A anb B (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Easements at Saggio Hills) OAK #4830-9554-9907 v5

RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:

Assessor’s Parcel #(s):

Space above this line reserved for County Recorder’s use

AMENDED NORTHWEST TRAIL EASEMENT
(PARCEL 2 – SAGGIO HILLS)
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, as of this ____ day of ____________, 2022 (“Effective Date”), SONOMA LUXURY RESORT LLC, a Delaware limited liability company (“Grantor”), owner of certain real property situated in the City of Healdsburg, County of Sonoma, State of California, and legally described as Parcel 2 of Saggio Hills per Map recorded May 23, 2018, in Book 795 of Maps at Pages 31-40, as Instrument No. 2018-037508, in the Official Records of Sonoma County, State of California (“Property”), hereby GRANTS AND CONVEYS to the CITY OF HEALDSBURG, a California municipal corporation (“Grantee”), its successors and assigns, and all those taking by, under or through Grantee, a permanent, nonexclusive easement in gross to enter in, on, over, under and upon, exit from, traverse, and otherwise use the area of the Property legally described in Exhibits “A” and depicted in Exhibits “B” and “B-1” attached hereto and incorporated herein by this reference (the “Easement Area”) for Access Purposes, and the Easement Area plus five feet (5’) on either side of the Easement Area (the “Construction and Maintenance Easement Area”) for Construction and Maintenance Purposes (collectively, the “Easement”). Grantor and Grantee are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

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Packet Pg. 145 Attachment: Amended_Northwest_Trail_Easement_(Parcel 2 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 2 OAK #4830-9554-9907 v5
Maintenance Work” means litter removal, graffiti removal, cleaning, power washing, painting, bulb replacement and electrical repairs. Grantee shall cause all improvements within the Easement Area to be designed, constructed, installed and maintained in accordance with all applicable codes and regulations.

Grantor warrants to Grantee that:

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Packet Pg. 146 Attachment: Amended_Northwest_Trail_Easement_(Parcel 2 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 3 OAK #4830-9554-9907 v5
B. To the best of Grantor’s actual knowledge, no one has the legally enforceable right (for example, under a lease, easement or right-of-way agreement in existence as of the date this Easement is executed by Grantor) to prevent the use of the Easement burdening the Easement Area and Construction and Maintenance Easement Area for the purposes contemplated by Grantee herein.

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Packet Pg. 147 Attachment: Amended_Northwest_Trail_Easement_(Parcel 2 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 4 OAK #4830-9554-9907 v5
No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Easement shall be construed to be a waiver of any succeeding breach of the same or other terms, covenants, agreements, restrictions or conditions hereof.

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Packet Pg. 148 Attachment: Amended_Northwest_Trail_Easement_(Parcel 2 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of 5 OAK #4830-9554-9907 v5
IN WITNESS WHEREOF, the Parties hereto have executed this Easement as of the Effective Date first written above.

GRANTEE:

CITY OF HEALDSBURG,
a California municipal corporation
By:

Name: Jeff Kay
Its: City Manager
Date:

APPROVED AS TO FORM:

By:

Samantha Zutler, City Attorney
GRANTOR:

SONOMA LUXURY RESORT LLC, a
Delaware limited liability company
By:

Name: John Ginochio
Its: Chief Financial Officer
Date:

APPROVED AS TO FORM:

By:

Grantor Attorney

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Packet Pg. 149 Attachment: Amended_Northwest_Trail_Easement_(Parcel 2 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of OAK #4830-9554-9907 v5
EXHIBITS “A”

LEGAL DESCRIPTION OF EASEMENT AREA
[to be inserted]
EXHIBITS “B” and “B-1”

DEPICTION OF EASEMENT AREA
[to be inserted]

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Packet Pg. 150 Attachment: Amended_Northwest_Trail_Easement_(Parcel 2 - Saggio Hills) (3584 : Vacation of Northwest Trail Easement and Acceptance of OAK #4830-9554-9907 v5

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property situated in the City of Healdsburg, County of Sonoma, State of California, conveyed by AMENDED NORTHWEST TRAIL EASEMENT, dated ___________, 2022 (“Easement Deed”), from SONOMA LUXURY RESORT LLC, a Delaware limited liability company (“Grantor”), to CITY OF HEALDSBURG, a California municipal corporation (“Grantee”), is hereby accepted by the undersigned officer or agent on behalf of the Grantee, pursuant to authority conferred by Resolution No. _____________, adopted by the City Council of the City of Healdsburg on ___________, 2022, and the Grantee consents to recordation of the Easement Deed by its duly authorized officer.

CITY OF HEALDSBURG,
a California municipal corporation
By:

Name: Jeff Kay
Its: City Manager
Date: ______________________, 2022

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Attachment: Exhibits A, B and B-1 (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Easements at Saggio Hills)

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Attachment: Exhibits A, B and B-1 (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Easements at Saggio Hills)

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Attachment: Exhibits A, B and B-1 (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Easements at Saggio Hills)

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Attachment: Exhibits A, B and B-1 (3584 : Vacation of Northwest Trail Easement and Acceptance of Amended Easements at Saggio Hills)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Amendment to Annual Asphalt Maintenance Contract PREPARED BY: Tyler Kettmann, Utility Technician
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

Adopt a Resolution approving an amendment to the Annual Asphalt Maintenance Contract with Engelke Construction, authorizing the City Manager to execute the amendment increasing the annual not-to-exceed amount by $15,996 to $165,996 for FY 21-22, authorizing the City Manager to execute annual extensions to the Annual Asphalt Maintenance Contract in an amount not to exceed $180,000 in FY 22-23 and FY 23-24, and approving an increase to the Annual Asphalt Maintenance Contract maximum five-year not-to-exceed amount by $75,996 to $825,996.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

On June 3, 2019, by resolution 77-2019, City Council conditionally awarded the annual asphalt maintenance contract to Engelke Construction and authorized the City Manager to execute the contract and four annual extensions for an annual not-to-exceed amount of $150,000, and a maximum five-year cost of $750,000.

In Fiscal Year 2020-2021 the Original Contract was extended for one year in the amount of $150,000 to $300,000. The most recent amendment was made July 1, 2021, extending the Original Contract for an additional year and increasing the not-to-exceed amount by $150,000 to $450,000.

On May 1, 2022, a water main break occurred on Healdsburg Avenue and Sunnyvale Lane.

Public Works crews responded and worked into the night to make the necessary repairs. Due to the severity of the main break much of the road section was lifted and the City contacted Engelke

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Construction to make emergency repairs to the road once the underground repairs were completed. Parts of Healdsburg Avenue were closed due to the brake and ensuing repairs. The costs for this unforeseen emergency repair exceeded the available not-to-exceed amount of the Asphalt Maintenance Contract by $15,996.

DISCUSSION/ANALYSIS:

Staff is recommending that Council approves an amendment to the Annual Asphalt Maintenance Contract with Engelke Construction and authorizes the City Manager to execute the amendment.

This amendment would increase the annual not-to-exceed amount by $15,996 to $165,996 for FY 21-22.

Unit pricing for asphalt paving is higher than in previous years due to ongoing inflation, particularly in the construction industry. The City’s underground infrastructure is aging, and the typical amount of trench paving and asphalt repairs are not expected to decrease. Due to the potential need for emergency repairs, staff also recommends authorizing the City Manager to execute annual contract extensions for fiscal years 22-23 and 23-24 in an amount not-to exceed $180,000 per year, a $30,000 per year increase over what was previously approved by Resolution 77-2019.

These proposed changes require approving an increase to the existing maximum five-year not-toexceed amount by $75,996 to $825,996.

ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

ALTERNATIVES:

Council could choose to deny the amendment. In this case, staff requests further direction.

FISCAL IMPACT:

The fiscal year 2021-2022 adopted budget has sufficient appropriations to cover the amendment as recommended. Budget amendments for contract extensions in subsequent years will be proposed to Council for approval as needed.

ENVIRONMENTAL ANALYSIS:

The repair and maintenance of existing public facilities is categorically exempt per the California Environmental Quality Act Guidelines Section 15301.

ATTACHMENT(S):

Resolution

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CITY OF HEALDSBURG
RESOLUTION NO. ____ - 2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING AN AMENDMENT TO THE

ANNUAL ASPHALT MAINTENANCE CONTRACT WITH

ENGELKE CONSTRUCTION, AUTHORIZING THE CITY

MANAGER TO EXECUTE THE AMENDMENT INCREASING
THE ANNUAL NOT-TO-EXCEED AMOUNT BY $15,996 TO
$165,996 FOR FY 21-22, AUTHORIZING THE CITY

MANAGER TO EXECUTE ANNUAL EXTENSIONS TO THE

ANNUAL ASPHALT MAINTENANCE CONTRACT IN AN
AMOUNT NOT TO EXCEED $180,000 IN FY 22-23 AND FY 23-
24, AND APPROVING AN INCREASE TO THE MAXIMUM
FIVE-YEAR NOT-TO-EXCEED AMOUNT BY $75,996 TO
$825,996.

WHEREAS, on June 3, 2019, by resolution 77-2019, City Council conditionally awarded the annual asphalt maintenance contract to Engelke Construction, and authorized the City Manager to execute the contract and four annual extensions for an annual not-to-exceed amount of $150,000, and a maximum five-year cost of $750,000; and
WHEREAS, in Fiscal Year 2020-2021 the Original Contract was extended for one year in the amount of $150,000 to $300,000; and
WHEREAS, the most recent amendment was made July 1, 2021, extending the Original Contract for an additional year and increasing the not-to-exceed amount by $150,000 to $450,000; and
WHEREAS, costs for an unforeseen emergency repair exceeded the available not-toexceed amount of the Asphalt Maintenance Contract by $15,996; and WHEREAS, staff is recommending that Council approves an amendment to the Annual Asphalt Maintenance Contract with Engelke Construction and authorizes the City Manager to execute the amendment, increasing the annual not-to-exceed amount by $15,996 to $165,996 for fiscal year 2021-22; and
WHEREAS, due to the potential need for emergency repairs, staff also recommends authorizing the City Manager to execute annual contract extensions for fiscal years 2022-23 and 2023-24 in an amount not-to exceed $180,000, increasing the maximum five-year not-to-exceed amount by $75,996 to $825,996; and
WHEREAS, the fiscal year 2021-2022 adopted budget has sufficient appropriations to cover the amendment as recommended; and
WHEREAS, the repair and maintenance of existing public facilities is categorically exempt per the California Environmental Quality Act Guidelines Section 15301.

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NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Approves an amendment to the Annual Asphalt Maintenance Contract with Engelke Construction and authorizes the City Manager to execute the amendment, increasing the annual not-to-exceed amount by $15,996 to $165,996 for FY 21-22.

2. Authorizes the City Manager to execute annual contract extensions to the Annual Asphalt Maintenance Contract for fiscal years 2022-23 and 2023-24 in an amount not-to exceed $180,000.

3. Approves an increase to the Annual Asphalt Maintenance Contract maximum five-year not-to-exceed amount by $75,996 to $825,996.

4. Finds the repair and maintenance of existing public facilities is categorically exempt per the California Environmental Quality Act Guidelines Section 15301.

PASSED, APPROVED AND ADOPTED this 21st day of June 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
_________________________________ ___________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Packet Pg. 159 Attachment: Resolution (3665 : Asphalt Maintenance Contract Amendment)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Adoption of Resolution Authorizing Remote Meetings PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Provide Effective Governance
Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):

Adopt a Resolution authorizing remote meetings of the City Council and other legislative bodies.

COMMUNITY ENGAGEMENT/OUTREACH:

The City has made and continues to engage in extensive outreach to the community regarding the City’s response to COVID-19, including updates at public meetings.

BACKGROUND:

On or about March 4, 2020, as part of the State of California’s response to address the global COVID-19 outbreak, Governor Gavin Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare for broader spread of COVID-19 following one official COVID-19 death.

When the COVID-19 pandemic started, local agency boards struggled to conduct their meetings in compliance with the Brown Act’s public accessibility requirements while still abiding by stayat-home orders. As a result, Governor Newsom signed Orders N-25-20, N-29-20, and N-35-20 to grant local agencies the flexibility to meet remotely during the COVID-19 pandemic. These orders expired on September 30, 2021.

DISCUSSION/ANALYSIS:

On September 16, 2021, Governor Newsom signed into law AB 361 – Brown Act: Remote Meetings During Emergencies. AB 361, codified at Government Code Section 54953(e)(1)(B), amended the Brown Act to allow public agencies to allow local legislative bodies to continue meeting by teleconference during a gubernatorial proclaimed state of emergency if the local

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legislative body determines, by majority vote, that as a result of the emergency, meeting entirely in person without restrictions would present imminent risks to the health or safety of attendees.

By adopting the proposed resolution, the Council would, on behalf of the City Council and all other legislative bodies formed by the Council, make the findings required by AB 361 to meet remotely. Because the Council is required to make these findings every thirty days, staff will place a version of this resolution on the consent calendar at all subsequent meetings, until the Council decides that meeting fully in person will no longer pose an imminent risk to the health or safety of attendees.

The resolution was amended at the February 22, 2022, City Council meeting and further amended at the March 21, 2022 City Council meeting, to amend public meeting protocol in response to the latest COVID-19 conditions, as directed by the City Council.

ENVIRONMENTAL STEWARDSHIP:

This section is not applicable.

ALTERNATIVES:

Because the Governor’s Order authorizing online meetings has expired, if the Council does not adopt the proposed resolution, the Council should immediately return to in-person meetings.

FISCAL IMPACT:

There is not a fiscal impact as a direct result of this action.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15378(b)(5) of the California Environmental Quality Act (“CEQA”) guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Resolution
Public Meeting COVID-19 Protocols for the City of Healdsburg

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CITY OF HEALDSBURG
RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG AND ON BEHALF OF COMMISSIONS AND

COMMITTEES CREATED BY THE CITY COUNCIL

PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTION 54952(b) AUTHORIZING TELECONFERENCE
MEETINGS IN COMPLIANCE WITH AB 361 (GOVERNMENT
CODE SECTION 54953(e)) TO CONTINUE TO ALLOW

MEMBERS OF THE PUBLIC TO SAFELY PARTICIPATE IN

LOCAL GOVERNMENT MEETINGS
WHEREAS, the City Council is committed to ensuring public access to observe and participate in local government meetings; and
WHEREAS, all meetings of the City Council and other legislative bodies created pursuant to Government Code Section 54952(b) are open and public, as required by the Ralph M. Brown Act, so that any member of the public may participate in local government meetings; and
WHEREAS, the recently adopted AB 361, codified at Government Code section 54953(e), makes provisions for remote teleconferencing participation in local government meetings, without compliance with the requirements 54953(b)(3), subject to the existence of certain conditions; and
WHEREAS, on March 4, 2020, Governor Newsom proclaimed a State of Emergency due to the outbreak of respiratory illness due to a novel coronavirus (now known as COVID 19) and that State of Emergency is still in effect in the State of California; and WHEREAS, the Sonoma County Public Health Officer continues to recommend teleconferencing or social distancing during public meetings of all legislative bodies to protect the community’s health against the spread of COVID-19; and WHEREAS, the City Council, acting as a legislative body pursuant to Government Code section 54952(a) and for the benefit of the commissions, committees and other bodies that were created by the City Council pursuant to Government Code section 54952(b) (collectively referred to as “Legislative Bodies”), finds that the current conditions meet the circumstances set forth in Government Code section 54953(e)(3) to allow Legislative Bodies to continue to use teleconferencing to hold open and public meetings if the Legislative Bodies comply with the requirements set forth in Government Code section 54953(e)(2) to ensure the public can safely participate in and observe local government meetings.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Healdsburg that the City Council does hereby:

1. Find that Current Conditions Authorize Teleconference Public Meetings of

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Legislative Bodies. Based on the California Governor’s continued declaration of a State of Emergency and the Sonoma County Public Health Officer’s recommendation to continue teleconferencing or social distancing during public meetings, the City Council finds that the conditions continue to exist pursuant to Government Code section 54953(e)(3) to allow Legislative Bodies to use teleconferencing to hold public meetings in accordance with Government Code section 54953(e)(2) to ensure members of the public have continued access to safely observe and participate in local government meetings.

2. Authorize Legislative Bodies to Conduct Teleconference Meetings. The Legislative Bodies are hereby authorized to take all actions necessary to carry out the intent and purpose of this Resolution, including conducting open and public meetings in accordance with Government Code section 54953(e)(2) and other applicable provisions of the Brown Act.

3. Authorize Legislative Bodies to Conduct Hybrid Meetings. The Legislative Bodies are hereby authorized to conduct meetings in a “hybrid” format, whereby members of the Body and members of the public may elect to be present in person, utilizing appropriate safety procedures, or participate by teleconferencing technology. Such meetings of the Legislative Bodies that occur using teleconferencing technology will provide an opportunity for any and all members of the public who wish to address Legislative Bodies to do so, and will otherwise occur in a manner that protects the statutory and constitutional rights of members of the public attending the meeting via teleconferencing. In-person meetings will be held consistent with the protocols described in Exhibit A to this Resolution.

PASSED and ADOPTED by the City Council of the City of Healdsburg, County of Sonoma, State of California, this 21st day of June 2022, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
________________________________ ___________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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PUBLIC MEETING COVID-19 PROTOCOLS

FOR THE CITY OF HEALDSBURG
SCOPE: These protocols shall apply to all public meetings held in the Council Chamber located at Healdsburg City Hall, 401 Grove Street, Healdsburg, California, by the City Council and by any and all boards, committees and commissions created and/or appointed by the City Council.

APPLICABILITY: These protocols shall apply to all participants, including members of the public, elected officials, appointed members of all boards, committees and commissions, city staff, consultants, applicants, contractors, and any other person or individual attending or participating in a public meeting in the Council Chamber.

In addition to these protocols, the City of Healdsburg will follow all laws, regulations, policies, and orders from all relevant public agencies, including the Center for Disease Control, California Department of Public Health, CalOSHA, and the Sonoma County Public Health Officer.

PURPOSE: The City intends to implement a hybrid public meeting format to allow all participants of a public meeting in the Council Chamber to participate either in-person or remotely via teleconference in a manner consistent with provisions of the Ralph M. Brown Act. Due to the fact that all participants of a public meeting that choose to participate in-person in the Council Chamber will therefore be in a confined indoor space and, the period of confinement will more likely than not be longer than 15 minutes, the City is adopting these protocols to protect the public health, safety and general welfare and thereby limit the potential risks associated with COVID-19.

COMMITMENT TO PUBLIC PARTICIPATION: None of the protocols established herein are intended to limit public participation by participants of a public meeting in the Council Chamber in any way; indeed, the intent is to protect the statutory and constitutional rights of participants appearing before the legislative bodies of the City of Healdsburg, while protecting the public health, safety and general welfare. Any participant of a public meeting that desires to participate in-person in the Council Chamber that is unable or unwilling to comply with the inperson attendance protocol outlined below, or otherwise chooses not to participate in-person in a public meeting in the Council Chamber, will have the right and ability to participate in a public meeting in the Council Chamber remotely via teleconference in a manner consistent with provisions of the Ralph M. Brown Act.

IN-PERSON ATTENDANCE PROTOCOL:

1. Social Distancing and Occupancy Limits: The occupancy limit in the Council Chamber will be reduced by at least 50%.
a. Due to limited capacity, participants who indicate they are only interested in a specific item may be asked to wait outside the Council Chamber until their item is called on the agenda.
b. City staff will monitor occupancy within the Council Chamber to ensure proper social distancing is maintained. All participants of a public meeting permitted entry into the Council Chamber shall obey all directions from City staff provided to ensure proper social distancing is maintained. Any participant of a public meeting permitted entry into the Council Chamber who fails or refuses to obey the directions

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from City staff provided to ensure social distancing, following one or more warning(s) from an appropriate City official, shall leave the Council Chamber upon instruction from an appropriate City official.
c. City staff and outside consultants to the City will, as appropriate or directed by the City Manager, participate in the public meeting remotely via teleconference.

2. Enforcement: In the event a participant of a public meeting in the Council Chamber refuses or fails to obey a decision, direction or instruction of an appropriate City official issued pursuant to these In-Person Attendance Protocols, the Chief of Police, or his or her designee, may in his or her discretion, or at the direction of the City Manager or the Presiding Officer of the public meeting, take appropriate and reasonable steps to enforce the decision, direction or instruction of the appropriate City official and/or remove the offending participant from the Council Chamber. Additionally, the Presiding Officer of the public meeting may, in his or her discretion, suspend and adjourn the public meeting and/or clear the Council Chamber of all participants in the event of a disturbance and/or disruption to the public meeting, and thereafter reconvene the public meeting once the matter is resolved.

CLEANING PROTOCOL: The Council Chamber shall be professionally cleaned after each public meeting. City staff will additionally use an electrostatic cleaner to disinfect the Council Chamber after each use.

AIR FILTRATION: Air control settings in the Council Chamber will be adjusted to allow for maximum fresh air flow during public meetings. When conditions allow, doors may be left open to facilitate additional fresh air circulation.

DISTRIBUTION OF PROTOCOLS TO PARTICIPANTS: A copy of these protocols shall be published and posted on the City’s website and shall be made available at the entry to the Council Chamber for distribution to all participants of a public meeting seeking to gain entry to the Council Chamber.

CHANGES TO PROTOCOL: The City Council may, from time to time, amend, modify, suspend and/or terminate and repeal all or any portion of these protocols as it may determine to be appropriate and necessary in consideration of changes in conditions or the need to protect the statutory and constitutional rights of participants appearing before the legislative bodies of the City of Healdsburg, while protecting the public health, safety and general welfare.

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Packet Pg. 165 Attachment: Public Meeting COVID-19 Protocols for the City of Healdsburg (3666 : Resolution authorizing remote meetings)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Amendment to Professional Services Agreement with Frontier Resource Management
PREPARED BY: Tyler Kettmann, Utility Technician
STRATEGIC INITIATIVE(S):

Effective & Efficient Government
Pursue Initiatives that Promote Environmental Stewardship Maintain and Enhance Public Health and Safety
RECOMMENDED ACTION(S):

Adopt a Resolution approving a Professional Services Agreement Amendment with Frontier Resource Management, extending the term to December 31, 2023, increasing the not-to-exceed amount by $70,000 to $120,000, and authorizing the City Manager to execute the Amendment on behalf of the City.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

The City engaged the services of Frontier Resource Management (“FRM”) in a Professional Services Agreement (PSA), effective June 9, 2021, to provide development, submission, and administration of a California Vegetation Treatment Program (CalVTP).

The initial cost proposal for services provided by FRM was dependent on the amount of cultural and biological resources discovered within the project boundaries.

The treatment types covered by the CalVTP are Wildland-Urban Interface (WUI) Fuel Reduction, Fuel Breaks, and Ecological Restoration. The buffers around the open space preserves and any “calming zones” would fall in to the WUI Fuel Reduction category. The fire roads would fall into the Fuel Breaks category. The remaining portions of the property areas will fall under the Ecological Restoration category. The goal under the Ecological Restoration category is to restore ecosystem processes and resiliency by moderating uncharacteristic wildland fuel conditions (i.e., through vegetation treatment activities).

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The Original PSA was amended twice during the agreement term, for the purposes of continuing ongoing services, and most recently extending the original term expiration date to December 21, 2022. The current not to exceed amount of the PSA is $50,000.

DISCUSSION/ANALYSIS:

Since the most recent CalVTP PSA Amendment with Frontier Resource Management the original scope of services has been expanded due to the need for additional CalVTP administration services. FRM has provided a new proposal for continued administration, mitigation, and monitoring services for the City’s CalVTP through 2023.

The continued consulting services performed will be an extension of the administration and management services performed through the first half of 2022. After the CalVTP was completed in 2021, these services were initiated with the remainder of the funds allocated in the original PSA, along with two amendments to extend the PSA not-to-exceed amount.

Staff is recommending that Council approve an amendment extending the PSA term to provide that it should expire on December 31, 2023, increase the not-to-exceed amount of the PSA by $70,000 to $120,000, and authorize the City Manager to execute the PSA Amendment on behalf of the City.

ENVIRONMENTAL STEWARDSHIP:

The services provided by FRM ensure CEQA compliance for vegetation treatment activities performed by the City and its contractors at the Healdsburg and Fitch Mountain Open Space Preserves, as well as the Callahan property.

ALTERNATIVES:

Council could choose not to approve the proposed amendment and provide further direction to staff on how to proceed.

FISCAL IMPACT:

On June 21, 2021, the City Council approved by resolution the award of grant funding from Sonoma County Fire and the State Coastal Conservancy, and these grant funds were budgeted to cover the costs of the proposed FRM PSA Amendment in the FY 22-23 and FY 23-24 adopted budgets. Funds expended on this PSA will be reimbursed through remaining State Coastal Conservancy grant fuels mitigation grant dollars. Remaining grant expenditures were included in the adopted budget for Fiscal Year 2022-23 and 2023-24.

ENVIRONMENTAL ANALYSIS:

Pursuant to California Environmental Quality Act and Title 14, the California Code of Regulations (“CEQA Guidelines”), Section 15378(b) (2), continued administrative actions do not qualify as a “Project”. Therefore, no further CEQA or environmental review is required.

ATTACHMENT(S):

Resolution
FRM Proposal For Administration Services CalVTP

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CITY OF HEALDSBURG
RESOLUTION NO. _____-2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING A PROFESSIONAL SERVICES

AGREEMENT AMENDMENT WITH FRONTIER RESOURCE

MANAGEMENT, EXTENDING THE TERM OF THE
AGREEMENT TO DECEMBER 31, 2023, INCREASING THE
NOT-TO-EXCEED AMOUNT BY $70,000 TO $120,000, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE THE

PROFESSIONAL SERVICES AGREEMENT AMENDMENT

ON BEHALF OF THE CITY
WHEREAS, the City engaged the services of Frontier Resource Management (“FRM”) in a Professional Services Agreement (PSA), effective June 9th, 2021, to provide development, submission, and administration of a California Vegetation Treatment Program (CalVTP); and WHEREAS, the services provided by FRM ensure CEQA compliance for vegetation treatment activities performed by the City and its contractors at the Healdsburg and Fitch Mountain Open Space Preserves, as well as the Callahan property; and WHEREAS, the initial cost proposal for services provided by FRM was dependent on the amount of cultural and biological resources discovered within the project boundaries; and WHEREAS, the Original PSA was amended twice during the agreement term, for the purposes of continuing ongoing services, and most recently extending the original term expiration date to December 21, 2022; and
WHEREAS, FRM has provided a new proposal for continued administration, mitigation, and monitoring services for the City’s CalVTP through 2023; and WHEREAS, staff is recommending that Council approve an amendment extending the PSA term to provide that it should expire on December 31, 2023, increase the not-to-exceed amount of the PSA by $70,000 to $120,000, and authorize the City Manager to execute the PSA Amendment on behalf of the City; and
WHEREAS, on June 21, 2021, the City Council approved by resolution the award of grant funding from Sonoma County Fire and the State Coastal Conservancy and these grant funds were budgeted to cover the costs of the proposed FRM PSA Amendment in the FY 22-23 and FY 23-24 adopted budgets; and
WHEREAS, Pursuant to California Environmental Quality Act and Title 14, the California Code of Regulations (“CEQA Guidelines”), Section 15378(b) (2), continued administrative actions do not qualify as a “Project”. Therefore, no further CEQA or environmental review is required.

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NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Approves an amendment extending the PSA term to provide that it should expire on December 31, 2023, increasing the not-to-exceed amount of the Professional Services Agreement by $70,000 to $120,000.

2. Authorizes the City Manager to execute the Professional Services Agreement Amendment.

3. Find that pursuant to California Environmental Quality Act and Title 14, the California Code of Regulations (“CEQA Guidelines”), Section 15378(b) (2), continued administrative actions do not qualify as a “Project”. Therefore, no further CEQA or environmental review is required.

PASSED, APPROVED, AND ADOPTED this 21st day of June 2022 by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
__________________________________ ___________________________________ Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Packet Pg. 169 Attachment: Resolution (3674 : Amendment to Professional Services Agreement with FRM) 1 June 12, 2022
Tyler Kettmann
Healdsburg City
550 Westside Rd
Healdsburg, CA 95448
Re: Project Proposal for Ongoing Administration, Mitigation, and Monitoring Services for CalVTP Forest Management
Dear Tyler Kettmann,
Per your request, a project proposal has been prepared by Frontier Resource Management for the above referenced project. The consulting services performed will be an extension of the administration and management services performed through the first half of 2022. After the CalVTP was completed in 2021, these services were initiated with the remainder of the funds allocated in the original contract, along with two amendments to extend the contract value.

The following proposal provides an estimate and scope of services for ongoing administration, mitigation and monitoring during the forest management services prescribed in the CalVTP.

If you have any questions, please do not hesitate to contact me by phone or email.

Sincerely,
Jacob Harrower
Frontier Resource Management
RPF # 3070
707.391.9883

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Packet Pg. 170 Attachment: FRM Proposal For Administration Services CalVTP (3674 : Amendment to Professional Services Agreement with FRM) 2 Project Proposal
June 12, 2022
The City of Healdsburg
550 Westside Rd.

Healdsburg, CA 95448
Scope of Services:

Administration of vegetation treatment activities prescribed in the CalVTP, including Grazing, Manual, Mechanical, and Prescribed fire treatments.

Planning of treatment timing with regards to various environmental constraints as outlined in the CalVTP and California Forest Practice Rules.

Coordination with contractors to complete above listed treatments Communication with contractors, the city, and the fire department regarding mitigations required by CEQA.

Monitoring of seasonally required mitigations, such as treatment restrictions and erosion control during the wet weather period, as prescribed in the CalVTP and Forest Practice Rules Nesting bird surveys prior to treatments within open space properties (March – August) Flagging protection buffers around the following Special Treatment Areas prior to treatment:

Discovered nesting birds
Watercourses
Geologically unstable areas
Sensitive species habitat
Communication and consultation with Ag and Open Space prior to treatments within the easement properties
Mapping of completed treatments and maintenance of CalVTP Geodatabase Consultation with Professional Archaeologist during treatment within identified historical site Biological training with city contractors prior to vegetation treatments within sensitive species habitat
Estimated Consulting Fees: $ 50,000 - $70,000
Above fees reflect the estimated cost through 2023.

All Services shall be billed at Time & Materials plus expenses and invoiced every 30 days (see the attached schedule of fees)
Payment is due 10 working days after postmarked date on invoice.

Account balances that are not timely paid shall be subject to a 1.50% per month(18.0% per year) service charge, calculated from the date of first invoicing.

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Packet Pg. 171 Attachment: FRM Proposal For Administration Services CalVTP (3674 : Amendment to Professional Services Agreement with FRM) 3 Schedule of Fees
Registered Professional Forester (RPF)……………………………………………………….……. $110/hour Expenses:

Mileage…………………………………………………………………………………………………………… $0.58/mile ATV Use (If Applicable)…………………………………………………………………………..……….. $40/day

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Packet Pg. 172 Attachment: FRM Proposal For Administration Services CalVTP (3674 : Amendment to Professional Services Agreement with FRM)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Professional Services Agreement with Burbank Housing Development Corporation, L&M Village
PREPARED BY: Stephen Sotomayor, Housing Administrator
STRATEGIC INITIATIVE(S):

Expand Affordable Housing Opportunities
RECOMMENDED ACTION(S):

Adopt a Resolution approving a Professional Services Agreement (PSA) with Burbank Housing for Construction Management services for the design and construction of the L&M Village.

COMMUNITY ENGAGEMENT/OUTREACH:

The Professional Services Agreement with Burbank Housing Development Corporation will be heard during a Regular City Council meeting which provides a forum for public comment and participation. In addition, as a part of the larger L&M Village project, City staff and Reach for Home have conducted extensive outreach with the project’s neighbors and stakeholders. City staff and Reach for Home will continue to keep an open dialog with affected parties throughout the duration of the project. The City will host a community meeting in August prior to the commencement of construction.

BACKGROUND:

In July of 2020, the State of California launched a $750 million program called “Project Homekey,” with the aim of helping local communities rapidly acquire hotels, motels, commercial buildings, and other creative housing types to rapidly house people experiencing homelessness during the COVID-19 pandemic. Project Homekey resulted in 8,264 individuals housed across 120 unique properties
Given the success of Project Homekey, the State of California budged an additional $1.45 billion for Fiscal Year (FY) 2021-2022. Of the $1.45 billion in Homekey funding, $1.2 billion is derived from the Coronavirus State Fiscal Recovery Fund (CSFRF) established by the American Rescue Plan Act (ARPA) of 2021 and $250 million is State General Fund.

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On October 18, 2021, the City Council authorized City staff, in collaboration with Reach for Home (Reach) and Burbank Housing (Burbank), to apply for the FY 2021-2022 Project Homekey program for the acquisition by the City of the Project Site for use as interim housing for those experiencing homelessness.

On October 27, 2021, the City, Reach and Burbank submitted an application to the State of California for $5,720,000 in Project Homekey capital funding and $1,328,800 in operating subsidy for a total of $7,048,800 in State funds.

On December 21, 2021, the State of California announced that the City, Reach and Burbank were successful in their application for Project Homekey funding and conditionally awarded the requested funding pending the execution of the State’s Standard Agreements.

On February 16, 2022, the City executed a State Standard Agreement with the State of California and on March 23, 2022, the City received the Project Homekey 2 program funds for both capital and operational costs.

On May 3, 2022, the City closed escrow on the L&M Motel and the property is now under City ownership.

DISCUSSION/ANALYSIS:

Staff recommends that the City Council adopt a Resolution to approve a Professional Services Agreement (PSA) with Burbank Housing for Construction Management services for the design and construction of the L&M Village.

As a part of the City of Healdsburg’s Project Homekey award, the City is required to make several improvements to the L&M Village’s existing infrastructure. These improvements include fire alerting and suppression systems, accessibility improvements to six units to accommodate mobility, auditory and visual needs, and other physical improvements including the installation of City sidewalks and the conversion of a single-family home into four individual units.

As outlined in Attachment A (PSA Scope of Work), Burbank Housing will manage the construction process and will assist in other related activities associated with the Project Homekey Grant, such as milestone reporting and subcontractor monitoring.

It is necessary to contract with Burbank Housing in advance of awarding a bid to a general contractor in order to have Burbank review the bids for accuracy, cost, and feasibility. Once a contractor is selected, Burbank will manage the contractor and subcontractors with oversight from the City’s project manager.

The City has posted a notice of bids on June 15th for the L&M Village construction and anticipates seeking Council approval of the selected contractor at the August 1, 2022 Regular City Council meeting. It is anticipated that that construction will begin in mid-August and occupancy will begin in late August and will continue on a rolling basis through November.

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It should also be noted that the City of Healdsburg and its project partners have submitted an extension request to the California State Department of Housing and Community Development (HCD) to recapture the time between the City’s date of award and the date funding. If granted, the City would have until November 21, 2022, to achieve full occupancy.

The PSA provides a contract amount of $400,000 with a 20% contingency. Staff is recommending that the Council also authorize the City Manager to execute amendments and contingency funding. The total contract with contingency is for $480,000.

ENVIRONMENTAL STEWARDSHIP:

As a part of the site improvements, the City and its partners will be making upgrades to the L&M village that will directly reduce the energy usage and water usage of the site.

ALTERNATIVES:

The City Council may choose:

1. Not to approve the PSA. If this option is chosen, staff would seek additional Council direction.

2. To request that staff modify the terms of the actions requested.

FISCAL IMPACT:

The funding for the capital improvements for the L&M Village was adopted as part of the fiscal year 2022-23 budget. This includes $1,657,970 in capital funds for the L&M Village. This is a combination of State Homekey Funding capital funds in the amount of $707,970 and $950,000 in County early capital match funding. The PSA with Burbank Housing will be paid from these grant sources as an eligible expense.

ENVIRONMENTAL ANALYSIS:

The proposed Project involves the acquisition and rehabilitation of an existing and operational motel, which shall then be used to provide interim housing on the Property and accordingly does not involve any change in land use or density, nor any expansion of use. Accordingly, the proposed Project is exempt from review under the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, which exempts the repair and minor alteration of existing public or private structures involving negligible or no expansion of use, as well as Section 15061(b)(3), commonly known as the common sense exemption, which acknowledges that CEQA applies only to projects which have the potential for causing a significant effect on the environment and in this instance there is no possibility that the Project may have a significant effect on the environment, given that there is no change in the land use, density, nor any expansion of use. Therefore, the proposed Project is not subject to CEQA.

ATTACHMENT(S):

Resolution
Attachment A

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CITY OF HEALDSBURG
RESOLUTION NO.___2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF HEALDSBURG APPROVING A PROFESSIONAL

SERVICES AGREEMENT WITH BURBANK HOUSING

DEVELOPMENT CORPORATION FOR CONSTRUCTION

MANAGEMENT SERVICES FOR THE DESIGN AND

CONSTRUCTION OF THE L&M VILLAGE IN THE AMOUNT
OF $400,000 WITH A 20% CONTINGENCY AND

AUTHORIZING THE CITY MANAGER TO EXECUTE SAID

AGREEMENT AND ANY AMENDMENTS AND

CONTINGENCY NECESSARY TO COMPLETE THE SCOPE

OF WORK
WHEREAS, the State of California Department of Housing and Community Development (Department) issued a Notice of Funding Availability (NOFA), dated September 9, 2021, for the Homekey Program. The Department has issued the NOFA for Homekey grant funds pursuant to Health and Safety Code section 50675.1.3 (Assembly Bill No. 140 (2021-2022 Reg. Sess.), § 20.); and
WHEREAS, on October 18, 2021, the City Council authorized City staff, in collaboration with Reach for Home (Reach) and Burbank Housing (Burbank), to apply for the FY 2021-2022 Project Homekey program for the acquisition of the L&M Motel, 70 Healdsburg Avenue, Healdsburg, California (APN 002-304-009) (“L&M Village”), for use as interim housing for those experiencing homelessness; and
WHEREAS, on October 27, 2021, the City, Reach and Burbank applied to the State of California for $5,720,000 in Project Homekey capital funding and $1,328,800 in operating subsidy for a total of $7,048,800 in State funds; and
WHEREAS, on December 21, 2021, the State of California announced that the City, Reach and Burbank were successful in their application for Project Homekey funding; and WHEREAS, on January 18, 2022, the City Council accepted the Project Homekey Grant funding and authorized the City Manager to enter a contract with the Department to receive program funding for the L&M Village; and
WHEREAS, on February 16, 2022, the City executed a State Standard Agreement with the State of California for the acquisition and operation of the L&M Village; and WHEREAS, on March 23, 2022, the City received funding from the Department for the acquisition and operation of the L&M Village; and

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WHEREAS, on May 3, 2022, the City closed escrow on the Property and now is ready to make the contractual improvements to the property as represented in the City’s Homekey application; and
WHEREAS, the City desires to retain professional services for construction management and design related services for the L&M Village; and
WHEREAS, Burbank Housing desires to provide such services and can accomplish the scope of work; and
WHEREAS, the City Council adopted the City of Healdsburg’s FY 2022-2024 Budget, which included funding in the amount of $1,657,970 for the L&M Village; and WHEREAS, the Professional Services Agreement for construction management services is an eligible use of Homekey Grant funding and County early capital match funding.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Determines that the approval of a Professional Services Agreement for construction management services involving the acquisition and rehabilitation of an existing and operational motel, which shall then be used to provide interim housing on the Property and accordingly does not involve any change in land use or density, nor any expansion of use. Accordingly, the proposed Project is exempt from review under the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) of the CEQA Guidelines, which exempts the repair and minor alteration of existing public or private structures involving negligible or no expansion of use, as well as Section 15061(b)(3), commonly known as the common sense exemption, which acknowledges that CEQA applies only to projects which have the potential for causing a significant effect on the environment and in this instance there is no possibility that the Project may have a significant effect on the environment, given that there is no change in the land use, density, nor any expansion of use. Therefore, the proposed Project is not subject to CEQA.

2. Approves a Professional Services Agreement with Burbank Housing Development Corporation for $400,000 with a 20% contingency for a total contract amount up to $480,000; and

3. Authorizes the City Manager to execute the Agreement; and

4. Authorizes the City Manager to authorize any amendments or contingency funding necessary to complete the scope of work under this Professional Services Agreement.

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PASSED, APPROVED AND ADOPTED this 21st day of June 2022, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:

Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Packet Pg. 178 Attachment: Resolution (3675 : Burbank PSA L&M Village) 1 Scope of Services
L&M Village
Burbank Housing

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Packet Pg. 179 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 2 Section A - Introduction

1. DEFINITIONS
The following definitions for words of phrases shall apply when used in this Agreement. “Agreement” or the “Contract” or the “Contract Documents”: The City of Healdsburg Professional Services Agreement and City’s approved modification(s) thereto. “Architect”: The architect(s) that the Consultant designates as being the architect(s) for all or a portion of the Project, including all consultants to the architect(s). The Architect is a member of the Design Team.
“Bid”: As used herein, any procurement document that the City utilizes to procure construction services from a Contractor, which may be a request for proposal, a request for qualifications, a formal bid, a solicitation, or other method. “Construction Cost”: The total cost to the City of all elements of the Project’s construction which is designed or specified by the Design Team.
“Construction Manager” or “Consultant”: The individual, partnership, corporation, association, joint venture, or any combination thereof, that has entered into the Agreement with the City to do the Work, identified as such in the Agreement, and referred to throughout the Agreement as if singular in number, including all Subconsultant(s) to the Construction Manager
“Contractor”: The entity, including its subcontractors, and their sub-subcontractors that the City designates as being the entity that will construct the Project. “City”: The City of Healdsburg, California.
“Day(s)”: Unless otherwise designated, “day(s)” means calendar day(s). “Design Team”: The architect(s), engineer(s), and other designer(s) that the City designates as designing all or a portion of the Project, including a Design/Build contractor, if applicable, along with all consultants to the architect(s), engineer(s) or other designer(s), who have a responsibility to the City to design all or a portion of the Project either directly or as a subconsultant or subcontractor
“Phase(s)”: One or more of the time frames within which the Services may be authorized and performed. The potential Phases of this Project are as follows: Working Drawings Phase and Construction Phase.
“Project”: Means the improvements made to the L&M Village as outlined in this Agreement. “Project Budget”: The total amount indicated by the City for the Project including design, construction management, construction, administration, financing, and all other costs. The Construction Cost is a component of the Project Budget. “Project Manager”: The City’s project manager and authorized representative for this Project. The Project Manager is the point of contact for the Construction Manager in its

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Packet Pg. 180 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 3 communications with the City. The City’s initial Project Manager for this Project is Stephen Sotomayor, Housing Administrator.
“Service(s)” or “Work”: All labor, materials, supervision, services, tasks, and work that the Construction Manager is required to perform and that are required by, or reasonably inferred from, the Agreement.
“Subconsultant(s)”: Any and all consultant(s), subcontractor(s), vendors or agent(s) employed by, retained by, or under contract(s) with the Construction Manager for any portion of the Work.

2. SCOPE, RESPONSIBILITIES AND SERVICES OF CONSTRUCTION MANAGER Scope: Construction Manager must provide the Services described herein and under Section “B” for the Project. The Parties agree that the Construction Manager’s Services described herein will be based on the Construction Manager administering the work of the Project. The City reserves the right to choose the delivery method for the Project.

Coordination: In the performance of Construction Manager’s Services under this Agreement, Construction Manager shall maintain direct communication with the City’s Project Manager as the primary point of contact with the City.

The Construction Manager must coordinate its Work with other City personnel and/or City’s designated representatives as may be requested and desirable but must take primary direction from the Project Manager.

Construction Manager must also coordinate with all members of the Design Team, and City staff. If the Construction Manager employs Subconsultant(s), the Construction Manager must ensure that its contract(s) with its Subconsultant(s) include language notifying the Subconsultant(s) of the City’s insurance, safety, and labor compliance programs, if any.

3. SCHEDULE OF WORK
The Construction Manager must commence the Work under this Agreement upon execution of this Agreement and must prosecute the Work diligently as described in Section “B” in accordance with the schedule attached as

4. FEE AND METHOD OF PAYMENT
City will pay Construction Manager a fee for services rendered and procured in an amount up to $400,000 for services provided with a fixed Developer fee of $280,000.

The Construction Manager’s Fee includes, without limitation, all costs for overhead; personnel; project delivery; administration; profit; travel within two hundred (200) miles of the Project location; offices; per diem expenses; and all deliverables, printing, and shipping, under the Agreement.

5. STANDARD OF CARE
Construction Manager, its officers, agents, employees, subcontractors, Subconsultants and any persons or entities for whom Construction Manager is responsible, must provide all Services pursuant to this Agreement in accordance with the requirements of this Agreement and in a manner consistent with the standard of care under California law applicable to

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Packet Pg. 181 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 4 those who specialize in providing the same services for projects of the type, scope, and complexity of the Project.

SECTION B. RESPONSIBILITIES AND SERVICES OF CONSTRUCTION MANAGER FOR CONSTRUCTION OF THE L&M Village
Construction Managershall provide professional construction managementservicesrelating to the following Project:

1. GENERAL DESCRIPTION OF THE PROJECT

1.1. The Project is the site development of a former motel located at 70 Healdsburg Avenue in Healdsburg, CA. The building plus off-site improvements include but are not limited to all building structures, enclosures, interior improvements, mechanical, electrical, telecommunication, audio visual, and security systems.

1.2. The Project includes site development, including, but not limited to site preparation, utilities, landscape, hardscape, vehicular drives, surface parking, security barriers, fencing, gates, motel units, and ancillary offices.

1.3. Project Goals. The following goals are for the overall design, construction and commissioning of the new interim housing shelter consisting of 22-units to serve those experiencing chronic homelessness under the guideline of the State of California Project Homekey program. Construction Manager’s scope of Services is intended to further these goals, whether or not the Construction Manager is primarily responsible for achieving all of these goals.

1.3.1. Design – The Project will serve as a 22-unit interim housing facility.

1.3.2. Schedule and Cost – The Project design and construction will be completed within the approved schedule and within the authorized funds. Where possible, project tasks should be concurrent.

1.3.3. Security – The City or it partners will be responsible for providing security during the construction period of the L&M Village.

1.4. Project Funding

1.4.1. Funding of this Project is provided through the State of California Project Homekey Program and through the County of Sonoma Early Capital Match Program.

1.4.2. Project Budget for this project is $1.0 to $1.4 million dollars

1.5. Preliminary Project Schedule [Estimated dates]

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Packet Pg. 182 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 5 1.5.1. Construction Phase
▪ Estimated start date of Construction: August 2, 2022
▪ Estimated date for end of Construction: November 21,2022.

2. GENERAL SERVICES

2.1. Oversight:

2.1.1. Construction Manager must work with the Design Team; manage work related to the Project; monitor the Contractor(s); and advise the Project Manager as to all material developments in the Project.

2.1.2. Construction Manager must develop reporting and forecasting methods.

Reports include but are not limited to: monthly progress reports, review of schedules, cost control reports, and budget status reports. All proposed reporting and forecasting methods and report formats must be approved by the Project Manager, and after that approval, Construction Manager must implement the approved reporting and forecasting methods.

2.1.3. Construction Manager must consult with and advise the Project Manager regarding possible construction delivery methods.

2.2. Communication. As directed by the Project Manager, Construction Manager will be the primary point of contact with the Contractor(s) and will either initiate, respond to, or be part of all communications between City, the Contractor(s) and the Design Team. In consultation with the Project Manager and according to City approved policies, procedures, forms, and reporting requirements for the Project, Construction Manager will establish a communications procedure for the Project that allows for decision making at appropriate levels of responsibility and accountability.

2.3. Coordination

2.3.1. Design. Construction Manager is not the Architect of the Project, but as indicated further herein, Construction Manager will perform specific Services during all Phases of the Project to assist, review, coordinate, opine and cooperate with the Design Team and all other design professional(s) of the Project, and Contractor(s), if applicable.

2.3.2. Construction. Construction Manager is not the Contractor of the Project.

As provided for herein, City will contract with the Contractor(s) for the actual construction of the Project. Construction Manager will perform the specific Services set forth herein during all Phases of the Project to manage the construction of the Project and review, coordinate, and

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Packet Pg. 183 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 6 cooperate with the Contractor(s) of the Project.

2.3.3. Plan Review. In addition to performing its own plan reviews, constructability reviews, and value analyses, Construction Manager must analyze the City’s third-party code review and work with Design Team and City to finalize and correct deficiencies and mistakes in the design documents.

2.3.4. Risk Management. Construction Manager must meet with the Project Manager and with the City’s Risk Management representative prior to the commencement of construction to discuss, and make
recommendations regarding, the development and implementation of an effective risk management program for the Project.

2.4. Subconsultants. Construction Manager may be required to contract for subconsultants, to the extent deemed necessary for performance of Construction Manager’s Services. Nothing in the foregoing shall create any contractual relationship between the City and any Subconsultants employed by the Construction Manager under terms of this Agreement. Contractor may invoice City for Subconsultant costs not covered in the accepted bid with Project Manager approval.

2.5. Cooperation. Construction Manager must cooperate with others employed by or contracted with the City for the design, coordination or management of other work related to the Project. These Services include but are not limited to establishing schedules for these entities (e.g., soils consultant(s), hazardous materials testing and other consultant(s), etc.), and review of costs, estimates, and invoices of each. Construction Manager must schedule and attend regular meetings with the Project Manager, the Design Team, and the Contractor(s).

2.6. Design Components. Construction Manager must consult with the Project Manager and Design Team in the selection of materials, building systems, and equipment. Provide recommendations on construction feasibility actions designed to minimize adverse impacts of labor or material shortages, time requirements for procurement, installation and construction completion, and factors related to construction cost, including estimates of alternative designs and materials.

2.7. Taking Minutes. Construction Manager must chair, conduct, and take minutes of periodic meetings between Project Manager and its design professional(s), and or attend meetings hosted by City on for the same purpose. This provision does not apply to meetings in which the Contractor is responsible for keeping records.

2.8. Accuracy of Work Product. Construction Manager is responsible for the professional quality and technical accuracy of all cost estimates, constructability reviews, studies, reports, projections, opinions of the probable cost of

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Packet Pg. 184 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 7 construction, and other Services furnished by Construction Manager under this Agreement as well as coordination with all Master Plans, studies, reports, and other information provided by the City to Construction Manager. Construction Manager must, without additional compensation, correct or revise any errors or omissions in the deliverables it generates.

2.9. Monthly Reports. Construction Manager must provide to the Project Manager with a monthly Project report. Monthly reports that include, without limitation:

2.9.1. The status of the Project and an update on Project activities;

2.9.2. A comparison of the Project Budget to costs incurred through the date of the report;

2.9.3. A comparison of the Project schedule to the work actually completed through the date of the report;

2.9.4. Any revision to the Projectschedule or Project Budget made during the month covered by the report;

2.9.5. A summary of change orders made during the month covered by the report;

2.9.6. A list of all pending change orders and all outstanding issues requiring action or approval by the City;

2.9.7. The status of RFIs;

2.9.8. The status of submittals;

2.9.9. The status of any governmental requirements and activities required to facilitate approval of the Project; and

2.9.10. Any other reports concerning the Project as the City may reasonably request.

2.9.11. Pictures, videos and other documentation to form the basis for a visual representation and record of the progress.

2.10. Construction Cost. In addition to its other duties related to budgeting and estimating, the Construction Manager must perform the following tasks related to the Construction Cost.

2.10.1. Construction Manager must independently develop, review, validate and reconcile the Construction Cost with the Design Team, the Project Manager and, if selected at that time, the Contractor(s), at the completion of each of the following Phases. following times:

2.10.1.1. Prior to certification that Working Drawings are 100% complete.

2.10.1.2. If Contractor submits proposed change orders or proposed requests for use of Project Contingency or similar contingency in the Construction Documents, Construction Manager must perform the same review and validation of the costs of those items so that the City can evaluate the sufficiency and necessity of each proposed change order or request for use of contingency funds.

2.10.2. The Construction Cost may include allowances, contingencies, and other amounts.

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Packet Pg. 185 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 8 2.10.3. Construction Manager must work cooperatively with the Design Team and the Contractor(s) so that the construction cost of the work designed by the Design Team will not exceed the Construction Cost, as may be adjusted with the Project Manager’s written approval.

2.10.4. Construction Manager must notify the Project Manager if Construction Manager believes the construction cost of the work as designed by the Design Team will exceed the Construction Cost.

2.11. Project Budget. At the same time that it is developing, reviewing and reconciling the Construction Cost, the Construction Manager must perform the same for the Project Budget. The Construction Manager must coordinate with the Design Team and the Project Manager while performing these activities.

2.12. Independent Estimate. Construction Manager must prepare an independent estimate of all components of the Project Budget at the end of each Phase. This estimate must be based on all costs that a prudent and experienced designer and contractor would incur, as well as known facts, construction tasks, supplemental judgments, and other economic analyses necessary to support the design decision. The cost estimate submitted for 100% Working Drawings Phase will be used as the basis to determine if the Contractor(s)'s proposed price to construct the Project is fair and reasonable and reflects the understanding of the Project requirements and the terms and conditions of the Construction Phase contract.

2.13. Contractor Selection. When City selects a Contractor Construction Manager must assist on a limited basis the City in selecting and retaining the Contractor including, without limitation:

2.13.1. Reviewing and revising the request for qualifications or other solicitation documents;

2.13.2. Assisting the City in negotiating and drafting the Contractor agreement with the City to construct the Project.

2.14. Subcontractor Bidding and Negotiation of Guaranteed Maximum Price. If the City utilizes a Contractor, Construction Manager must assist the City throughout the subcontractor bidding process, including, without limitation, a review and analysis of subcontractor bids and assisting the City regarding the negotiations with the Contractor.

2.15. Selection of Contractor . When the City awards a bid for the construction of the Project, the Construction Manager will perform the following scopes of work:

2.15.1 Develop master bid/award schedule(s) and construction milestones for the Project through the completion of construction, as directed by City, in

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Packet Pg. 186 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 9 coordination with the Design Team. Construction Manager must review, and if appropriate accept, contractor(s)’ schedules on behalf of the City but must not dictate Contractor(s)’s means and/or methods of performance.

2.15.2 Work with the Project Manager and the Design Team to separate the Construction Phase for the Project into bid packages.

2.15.3 Make recommendations to the Project Manager for prequalification of potential bidders and if needed manage all aspects of the bidder prequalification process.

2.15.4 Conduct pre-bid conferences to familiarize potential bidders with the bid documents, and any special systems, materials or methods and with Project procedures. Receive questions from potential bidders coordinate responses to questions with the Project Manager and the Design Team and respond to bidder questions by addenda.

2.15.5 Prepare bid analyses and advise the Project Manager on compliance of bidders with City requirements and bid requirements. Report and make recommendations to the Project Manager after review and evaluation regarding Contractor selection.

2.15.6 Conduct with the Project Manager, pre-award conferences with successful bidder including discussion of Contractor(s)’s team members and key success factors for the Project. Construction Manager must advise the City on the acceptability of contractor(s) for the Project.

2.16. Consultant Selection. If requested by the Project Manager, Construction Manager must assist the Project Manager and the City with the process of identifying, soliciting proposals from, and negotiating contracts and/or amendments to contracts with consultants necessary for the completion of the Project. If requested by the Project Manager, Construction Manager must advise City and make recommendations concerning the scope ofservices, the fees and the administration of consultants.

2.17. Project Information. Construction Manager must provide documentation, pictures, and other information and assistance to the City for the City’s use on a website for public accessto show Projectstatus.

2.18. Labor Code Compliance.

2.18.1. Construction Manager acknowledges and understands that the State monitors and enforces compliance with Labor Code requirements through statutorily authorized programs. Construction Manager must ensure that the Contractor(s), its subcontractors, and other consultant's providing labor are in compliance with the State's requirements for contractor registration, payment of prevailing wages and use of apprentices in the

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Packet Pg. 187 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 10 design and construction of the Project.

2.18.2. Construction Manager also acknowledges that, for purposes of Labor Code section 1725.5, some of its Services may be a public work to which Labor Code section 1771 applies. That portion of the Services is therefore subject to compliance monitoring and enforcement by the Department of Industrial Relations. Construction Manager must comply with Labor Code section 1725.5, including without limitation the registration requirements.

2.19. Safety. Construction Manager must provide a qualified person to initially and continually review and from time-to-time monitor, the Contractor(s)’s Safety Program.

2.19.1. This shall include a review of all submittals and implementation of the Contractor(s)’s Safety Program and Contractor(s)’s compliance with the safety requirements of the Contractor(s)’s contract documents.

2.19.2. The Construction Manager must report to the appropriate Contractor(s) personnel, the Project Manager, and the City's Risk Manager any observed deviations from the Contractor(s)’s Safety Program, the OCIP; applicable CalOSHA requirements.

2.19.3. Construction Manager hasthe responsibility and authority to follow-up with a written safety notice to the Contractor(s) and must provide copies of those to the Project Manager and City’s Risk Manager.

2.20. Scheduling. Construction Manager shall prepare, track and report on schedule status for the Project throughout the design and construction phases. If the City has not provided Construction Manager with a standard format for this purpose Construction Manager must develop master schedules and milestone schedules for the Project and must report on same each month to the Project Manager.

2.20.1. Construction Manager must ensure that the Contractor fully complies with all its contractual requirements related to providing ongoing schedules, updated schedules, recovery schedules, and related documentation.

2.20.2. Construction Manager must evaluate Contractor’s schedules for compliance with City’s deadlines, milestones, and completion dates; for logical ties between tasks; for accurate projections for the duration of specific tasks and activities; and related impacts on cost-loaded items and/or earned-value items.

2.21. Payment Applications. Construction Manager must review for accuracy, and prepare a recommendation, and forward to the Project Manager for payment the invoices from the Design Team, the Contractor(s) and other consultants. Construction Manager must provide its reports and information in an electronic format in a form acceptable to the City.

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Packet Pg. 188 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 11 2.22. Cost Controls. Construction Manager must prepare and implement methods to budget and track all expenditures on the Project. Construction Manager must generate monthly reports to the Project Manager reflecting this information.

2.23. Not in Scope / Coordination with Special Consultants. Construction Manager may be responsible to perform the following scopes of work orservices, but Construction Manager must coordinate the City’s other consultants and vendors that are performing these services (e.g., Construction Manager must establish and maintain a schedule of all environmental and archeological investigations, testing, etc.). In addition, Construction Manager will assistthe City in procuring these scopes of work or services when required.

2.23.1. Ground contamination or hazardous material analysis.

2.23.2. Any asbestos testing, design or abatement.

2.23.3. Historicalsignificance report.

2.23.4. Soilsinvestigation.

2.23.5. Geotechnical hazard report.

2.23.6. Topographic survey, including utility locating services.

2.23.7. Other items specifically designated asthe City’sresponsibilities under this Agreement.

2.23.8. As-built documentation from previous construction projects.

3. WORKING DRAWINGS PHASE

3.1. Provision of Services. Construction Manager must provide all of the Services in this Article with respect to the Working Drawings Phase, including bidding and negotiations with the Contractor.

3.2. Meetings. Construction Manager must attend all planning, programming and site planning meetings related to the Project.

3.3. Constructability and Plan Reviews.

3.3.1 The Construction Manager must conduct constructability reviews and site verifications of the Project when Working Drawings are 100% complete and as bid packages are being prepared by Contractor and approved by the City.

3.3.2 The Construction Managermust review the design documentsfor code

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Packet Pg. 189 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 12 compliance, clarity, consistency, constructability, and coordination. The Construction Manager must also make recommendationsto the Project Manager with respectto constructability, construction cost sequence of construction, construction duration and separation of the contracts for various projectsinto categories of the work and separate Bid trade packages. However,the Construction Manageris notresponsible for providing, nor doesthe Construction Manager control, the Project design, orthe contents of the design documents.

3.4. Site Logistics and Traffic Analysis. Construction Manager must review Contractor(s)’s site logistics plans, traffic flow diagrams and plans for the performance of the Project, showing the use of designated roadways or streetlights, the closing of any roadways, streets and/or sidewalks, and the rerouting of any traffic. Construction Manager must assist in obtaining necessary government approvals required to implement traffic plans.

4. CONSTRUCTION PHASE

4.1. Administer Construction Phase Activities. Construction Manager must administer the contract(s) between the City and the Contractor(s) and all other contracts between the City and other contractors, consultants, suppliers, and vendor performing work on the Project site, if any. Although Construction Manager’s Services include actions indicated herein, the Construction Manager acknowledges that it must consult with, inform, coordinate, and when appropriate seek prior approval of its activities with the Project Manager.

4.2. Monitor Project. Construction Manager must monitor the Contractor(s)’s activities and operations to verify that tools, equipment, and labor are furnished, and work is performed and completed within the time as required or indicated in the Contractor(s)’s Contract Documents, to achieve the City’s objectives in relation to cost, time and quality, and to the satisfaction of the City. Construction Manager expressly agrees to verify that the requirements of the Contractor(s)’s contract documents are met, observed, performed, and followed.

4.3. Meetings. Construction Manager must conduct construction meetings for the Project to discuss and resolve such matters as progress, quality, and scheduling.

These meetings must be held weekly unless Project conditions do not require that frequency. Construction Manager will determine the method and recording keeping requirements for these meetings and inform Project Manager of such methodology.

4.4. Schedule. Construction Manager shall ensure Contractor(s) provides construction schedules as required by its Contractor’s contract documents, including activity sequences and durations, submittal schedule, and procurement schedule for products that require long lead time. Construction Manager must review Contractor(s)’s construction schedules for conformity with the requirements of the Contractor(s)’s contract documents and conformity with the

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Packet Pg. 190 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 13 overall schedule for the Project. Where Contractor(s)’s construction schedules do not so conform, Construction Manager must take appropriate measures to secure Contractor(s)’s compliance with the requirements of its contract documents for updating, revising, and other obligations relative to its construction schedule. Construction Manager must incorporate Contractor(s)’s construction schedule updates and revisions into the master Project construction schedule.

4.5. Contractor(s)’s Contractual Requirements. Construction Manager must continually monitor whether Contractor(s)’s contract requirements are being fulfilled and recommend courses of action to the Project Manager when Contractor(s) fails to fulfill contractual requirements including, without limitation, the adequacy of the Contractor(s)’s personnel and equipment, and the availability of materials and supplies to meet the Contractor(s)’s schedules in relation to the Project schedule.

4.5.1. Construction Manager must notify the Project Manager in writing if Construction Manager becomes aware that the work of Contractor(s) is not being performed in accordance with the requirements of the Contractor(s)’s contract documents. Construction Manager must review any and all test and inspection reports and notify the Project Manager, the City and the Design Team, as appropriate, of deficiencies in the work of which Construction Manager becomes aware and must advise the City of projected consequences of that deficiency and make
recommendations to the City with respect to appropriate remedies to cure that deficiency.

4.5.2. As appropriate, Construction Manager shall have authority, with written authorization from the City, to require additional inspection or testing of the work in accordance with the provisions of the Contractor(s)’s contract documents, whether or not such work is covered, installed or completed.

4.5.3. As appropriate, Construction Manager shall have authority, with written authorization from the City, and after consultation with the Project Manager to reject work which does not conform to the requirements of the applicable Contractor(s)’s contract documents.

4.6. Minor Variations. Construction Manager, with the prior written approval of the Project Manager, may authorize minor variations in the Contractor(s)’s work from the requirements of the Contractor(s)’s contract documents that do not involve an adjustment in the Contractor(s)’s contract price or the Contractor(s)’s contract time or design and which are consistent with the overall intent of the Project’s design. The Construction Manager must provide to the Design Team and the Project Manager copies of these written waivers to the Contractor(s). The Construction Manager’s indemnity obligations as indicated herein are applicable to all unforeseen costs and/or schedule impacts to the Project that result from the Construction Manager’s authorization(s) made pursuant to this subsection.

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Packet Pg. 191 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 14 4.7. Payment Applications.

4.7.1. Construction Manager must review for accuracy, and prepare a recommendation, and forward to the Project Manager for payment the invoices from the Design Team, the Contractor(s) and other consultants.

Construction Manager must provide its reports and information in an electronic format in a form acceptable to the City.

4.7.2. Construction Manager shall certify certificates for payment to Contractor(s) and make written recommendations to the Project Manager concerning payment. Construction Manager’s certification for payment will constitute a representation to the City that, to the best of the Construction Manager’s knowledge, information and belief, the Contractor(s)’ work has progressed to the point indicated and the quality of the work is in accordance with the requirements of the Contractor(s)’ contract documents. The issuance of a certificate for payment will further constitute a representation by the Construction Manager that the Contractor(s) are entitled to payment in the amount certified.

4.7.3. Construction Manager will adhere to the City’s procedures for review and payment of Project costs and expenses, including fees for the Design Team and consultants.

4.8. Budgets. Construction Manager must monitor ongoing Project costs to verify that projected costs do not exceed the approved budgets and provide the Project Manager timely notice of any potential increase in costs in excess of approved budgets provided to Construction Manager.

4.9. Changes. Construction Manager must evaluate Contractor(s)’s proposals, proposed change orders, requests to use contingency funds (if any) and review proposed changes prepared by the Design Team, with the Design Team’s input as needed, for approval by the Project Manager. Construction Manager must advise the Project Manager concerning the necessity for, scope of and recommended cost of change orders or the use contingency funds.

4.10. Change Order Log. Construction Manager must maintain a change order log for the Project in the format provided by Construction Manager.

4.11. Project Contingency Log. If there is a Project Contingency or similar contingency in the Construction Documents, Construction Manager must maintain a Project contingency log for the Project.

4.12. Claims. Construction Manager must assist the Project Manager in resolution of actual or potential disputes and claims of the Contractor(s) and other entities performing work or services on the Project.

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Packet Pg. 192 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 15 4.13. Testing & Inspection. Construction Manager must, with the assistance of the Project Manager, the Design Team, Contractor(s), City's Risk & Quality Compliance Unit and the Inspector(s), establish a schedule of, and procedure for, requesting, required inspections and material testing as required by applicable building codes, the Contractor(s)’s contract documents and other applicable industry standards.

4.14. Quality Assurance Program. Construction Manager must establish and implement, in consultation with the Inspector, a quality assurance program to review the Contractor(s)'s quality management program, and monitor the quality and workmanship of construction for conformity with:

4.14.1. Accepted industry standards;

4.14.2. Applicable laws, rules, codes, or ordinances;

4.14.3. The Contractor(s)’s contract documents; and

4.14.4. The established or approved inspection and testing schedule.

4.14.5. Where it has been determined by the Design Team and/or Inspector(s) that the work of a Contractor(s) does not conform as set forth above, Construction Manager must notify the Project Manager and:

4.14.5.1. Notify the Contractor(s) of the non-conforming work, even if the Inspector(s) already notified the Contractor(s); and

4.14.5.2. Take any and all action(s) permitted by, and in accordance with, the Contractor(s)’s contract documents and California law to compel the Contractor(s) to correct the work.

4.15. RFIs. Construction Manager must maintain, coordinate, and manage a log of requests for information (“RFI”) submitted by the Contractor(s) to the Construction Manager or any member of the Design Team.

4.16. Submittals. Construction Manager must establish and implement procedures, in collaboration with the Project Manager and the Design Team, for processing and approval of shop drawings, product data, samples, and other submittals for each contract. Construction Manager will receive and transmit all submittals from the Contractor(s) to the Design Team and other reviewers for review and approval.

Construction Manager must maintain, coordinate and keep the submittal tracking log current. Construction Manager is also responsible for identifying, managing, and tracking all submittals requiring concurrent review and approval (parallel submittals) and ensuring that all review comments and approvals are coordinated prior to returning the submittal(s) to the Contractor(s).

4.17. Project Documents. Construction Manager must maintain at the Project site and, if necessary, at the City’s offices, a current copy of all approved

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Packet Pg. 193 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 16 documents, drawings, specifications, addenda, change orders, use of allowance(s), use of contingency(s) and other modifications, and drawings marked by the Contractor(s) and its subcontractor(s) to record all changes made during construction.

4.17.1. These documents include, but are not limited to, shop drawings, product data, samples, submittals, field surveying notes, applicable handbooks, maintenance and operating manuals and instructions, and other related documents and revisions which are relevant to the Project work.

4.17.2. Construction Manager must collaborate with City’s consultants to ensure there is not unnecessary duplication of Project documentation and must make available its records to all of City’s consultants when appropriate.

4.17.3. At the completion of the Project, Construction Manager must deliver all these records to the Project Manager, at a location(s) directed by the Project Manager.

5. Project Completion/Closeout.

5.1 Construction Manager must observe all the Project’s check-outs of utilities, operational systems and equipment, and start-up and testing. Construction Manager shall observe those events with the Project Manager. Construction Manager must maintain records of these events. Construction Manager shall ensure the City that those events were done in compliance with applicable provisions of the Contractor(s)’s contract that all work has been performed and accepted, and that all systems are complete and operative.

5.2 Prior to starting the punch list for the Project, or portions thereof, Construction Manager must, in consultation with the Project Manager, the Design Team, all project inspectors, and the Contractor(s) ensure the preparation of a list of incomplete work. All items of incomplete work must be added to the punch list. No punch list will be created until the City has determined that all incomplete items are of minor significance.

5.3 At the punch list phase of the Project or designated portions thereof, the Construction Manager shall, in consultation with the Project Manager, the Design Team and all project inspectors, ensure the preparation of a list of incomplete or deficient work which does not conform to the requirements of the Contractor(s)’s contract documents (“punch list work”) and a schedule for the completion of the punch list work. The Construction Manager must provide this list to the Contractor(s). The Construction Manager must coordinate Contractor(s)’s performance and completion of punch list work.

The Construction Manager must review the completed punch list work with the Project Manager, the Design Team and all project inspectors. The

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Packet Pg. 194 Attachment: Attachment A (3675 : Burbank PSA L&M Village) 17 Construction Manager must ensure, with input from these entities, that the completed punch list work complies with applicable requirements of the Contractor(s)’s contract documents.

5.4 Construction Manager must advise the Project Manager when the Construction Manager determines that the Project or designated portions thereof are complete and all punch list items have been completed.

5.5 Construction Manager must conduct, with the Project Manager, the Design Team and all project inspectors, final inspections of the Project or designated portions thereof. The Construction Manager must advise the Project Manager when the Construction Manager determines that the Project is at final completion, including the completion of all outstanding punch list items.

5.6 Construction Manager must assist with the issuance of a Certificate of Final Completion and must provide to the City a written recommendation regarding final payment to the
Contractor(s).

Final Project Documents

5.7 Construction Manager must review, monitor and approve all as-built drawings, maintenance and operations manuals, and other closeout documents and ensure all required final documents submitted by the Contractor(s) meet the requirements of the Contractor(s)’s contract documents.

5.8 The Construction Manager must, secure and deliver to the Project Manager or the Project Managers designee, all required guarantees, keys, manuals, record drawings, daily logs, Project files, and all other electronic and physic Project records.

5.9 Construction Manager must use its best efforts and all due diligence to ensure all Project participants provide all required closeout documents and information on a timely basis and to not cause a delay in Project completion or approval of the Project.

5.10 Final Report. The Construction Manager must, within ten (5) weeks of final completion of the Project, submit a final Project report to the Project Manager.

5.11 Warranty Documents. The Construction Manager shall ensure that all documentation for all warranties and guarantees are provided by the Contractors(s).

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Packet Pg. 195 Attachment: Attachment A (3675 : Burbank PSA L&M Village)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Villa Chanticleer Operating Agreement
PREPARED BY: Mark Themig, Community Services Director
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
Provide Resident-Driven Community Services
RECOMMENDED ACTION(S):

Adopt a Resolution authorizing the City Manager to enter into an agreement with Milestone Events Group for management and operation of the Villa Chanticleer.

COMMUNITY ENGAGEMENT/OUTREACH:
• Staff distributed information about the upcoming transition of the Villa Chanticleer’s operation as part of the Request for Interest and Request for Proposal processes through the City’s website and social media platforms, along with a direct email to potential operators. • The Healdsburg Tribune wrote an article on the upcoming transition that was published in their February 3 online portal and February 10 print edition. • The Parks and Recreation Commission discussed the future of the Villa Chanticleer operations at their November 17, 2021, December 8, 2021, and February 9, 2022 meetings. • The City Council discussed the future of the Villa Chanticleer operations at their December 6, 2021, February 22, 2022, and May 16 meetings.
• Staff has responded to calls from residents and other interested parties about the status of the Villa Chanticleer and the operational transition.

BACKGROUND:

On August 4, 2014, City Council approved a Master Services Agreement (lease) with Tayman Golf Group Inc. (Tayman) for the purposes of operating the Villa Chanticleer as an event center.

This agreement came about after extensive analysis of Villa Chanticleer’s operational efficiencies, revenue opportunities, and marketing strategies. The analysis led to the City issuing a Request for Proposals (RFP) to contract with a service provider to operate the Villa on behalf of the City. Following the review of proposals, the City determined that Tayman’s proposal was the best fit. (See attached staff report.)

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The City transitioned the operation of Villa Chanticleer to Tayman in September 2014. In addition to assuming the Villa event operations, the City also assigned Tayman the responsibility for coordinating use of the Villa Annex by the American Legion Sotoyome Post No. 111 that is operated under a separate lease agreement. Under the terms of the lease, the City assigned Tayman responsibility for the full facility operation of the Villa and coordinating use of the Villa Annex with the American Legion. As allowed under the lease agreement and subsequent amendments, Tayman Group will be terminating their operating lease on June 30, 2022.

In January 2022, staff issued a non-committal “Request for Interest” (RFI) to gauge interest from parties that might operate the Villa Chanticleer on behalf of the City. The RFI process resulted in 10 responses. In March, staff issued a formal “Request for Proposals” (RFP, attached) to seek proposals from potential operators. The City received two proposals: Leilani Martin and Milestone Events Group. During the proposal review process Marshall Bauer, President of Milestone Events Group, initiated conversations with Ms. Martin regarding her role as the current Reservations and Operations Coordinator of the Villa. Mr. Bauer was interested in the feasibility of bringing Ms. Martin on the Milestone team to continue her role managing the Villa as an employee of Milestone. Mr. Bauer and Ms. Martin have since come to agreement on a framework that would continue Ms. Martin’s role in overseeing the Villa venue as part of the Milestone Events Group team.

As a result, staff is recommending the Council approve an agreement with Milestone Events Group to operate the Villa Chanticleer on behalf of the City.

DISCUSSION/ANALYSIS:

Staff has worked with representatives of Milestone Events Group and the City Attorney to develop a proposed agreement to operate the Villa Chanticleer on the City’s behalf. Under the terms of the agreement the operation would transition to Milestone on July 1, 2022. All events currently booked would be honored under the existing terms and conditions, and staff and Milestone anticipate a seamless transition.

The agreement is proposed to be a five-year term with a five-year extension option. There would also be a review of the operation at the end of the first year. Key elements of the agreement include the following:
• Milestone Responsibilities
o Full responsibility for event marketing, planning, and delivery. o Honor all previously scheduled events at the agreed upon terms and conditions. o Provide day-to-day maintenance and upkeep of the buildings and grounds. o Provide staffing, financial management, and administration of the operation. o Coordinate food and beverage services, including licensing and operation of the bar. o Commit to work with the City to develop a long-term capital expenditure plan. • City Responsibilities
o Transfer all payments and deposits for events occurring after July 1, 2022 to Milestone. o Perform specified facility inspections and improvements by September 30, 2022.

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o Maintain the structural components of the property, the major kitchen equipment, the major mechanical systems, and other building components like windows and doors. o Commit to work with Milestone to develop a long-term capital expenditure plan. • Community Benefits
o Milestone will waive the rental fee for five events in the Villa hosted by the City each calendar year. (The City has access to the Annex for events at no charge when not in use for other events.) Rentals would be subject to cleaning fees and damage deposits, if applicable.
o Milestone will waive the rental fee for five events in the Villa hosted by Healdsburg Unified School District (HUSD) each calendar year. Rentals would be subject to cleaning fees and damage deposits, if applicable.
o Milestone will waive the rental fee for six events in the Villa hosted by Healdsburg American Legion Sotoyome Post No. 111 each calendar year. Rentals would be subject to cleaning fees and damage deposits, if applicable.
o Individuals residing within Healdsburg City Limits as of the date they reserve an event shall be eligible to receive a 20% discount off the regular rental fee in effect on the date the event is reserved. Rentals would be subject to cleaning fees and damage deposits, if applicable.
o Nonprofit organizations that are registered with the State of California with a business address within the Healdsburg City Limits as of the date they reserve an event shall be eligible to receive a discount of 50% to 70% off the regular facility rental fee for events in effect on the date the event is reserved. Rentals would be subject to cleaning fees and damage deposits, if applicable.

ENVIRONMENTAL STEWARDSHIP:

The agreement requires that the operation comply with all applicable with all federal, state and local statutes, ordinances, codes, rules, and regulations. Staff will work with Milestone to incorporate any new required environmental initiatives that are enacted during the agreement period.

ALTERNATIVES:

Do not enter into an agreement with Milestone and provide direction to staff.

FISCAL IMPACT:

The City’s adopted FY22-23 and FY23-24 budget includes $25,000 each year for ongoing maintenance and upkeep of the property. Staff deems this amount sufficient to meet all of the City’s maintenance and repair options in the current year. Some of that work will be done inhouse by City staff. The agreement requires that the City and Milestone work together to develop a long-term capital expenditure plan that City Council would consider in the future.

The value of the community benefit associated with the agreement is estimated as follows:

Benefit Estimated Value Notes
City’s five free events $25,000 Based on average $5,000/rental HUSD’s five free events $25,000 Based on average $5,000/rental Legion’s six free events $30,000 Based on average $5,000/rental

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Discount for non-profit fundraiser events $36,750 2019 actuals Discount for community use events $86,595 2019 actuals
Total Value $203,345
This estimate does not include the value of Healdsburg resident private booking discounts as those were not tracked separately in the Villa’s booking software and are not readily available.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, approval of this resolution is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Resolution

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CITY OF HEALDSBURG
RESOLUTION NO. -2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG AUTHORIZING THE CITY MANAGER TO

ENTER INTO AN AGREEMENT WITH MILESTONE EVENTS

GROUP FOR MANAGEMENT AND OPERATION OF THE

VILLA CHANTICLEER
WHEREAS, Tayman Park Golf, Inc. (Tayman) and the City of Healdsburg (City) entered into a Master Services Agreement (“Agreement”) for operation of the Villa Chanticleer as an event center and related purposes in August 2014; and
WHEREAS, Tayman is terminating the Agreement, effective June 30, 2022; and WHEREAS, the City completed a Request for Interest and Request for Proposal process to solicit a new operator for the Villa Chanticleer; and WHEREAS, the City has selected Milestone Events Group to be the new operator of the Villa Chanticleer; and
WHEREAS, Milestone has agreed to assume responsibility for all previously scheduled events, such that the transition to Milestone is expected to be seamless; and WHEREAS, Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, approval of this resolution is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:
1) Finds that Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act (“CEQA”) guidelines, approval of this resolution is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.
2) Authorizes the City Manager to enter into an agreement with Milestone Events Group for management and operation of the Villa Chanticleer that includes the following terms:
• Five year term with a potential five year extension;
• Milestone assumes responsibility for event marketing, planning, and execution; • Milestone will provide day to day maintenance and upkeep of the building and grounds;
• The City will perform specified facility improvements by September 30, 2022;

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Packet Pg. 200 Attachment: Resolution (3593 : Villa Chanticleer Operating Agreement) Resolution No. -2022

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• The City will maintain the structural components of the property and the major kitchen equipment and mechanical systems;
• Milestone will waive the rental fee for five events in the Villa hosted by the City, five events hosted by the Healdsburg Unified School District, and six events hosted by Healdsburg American Legion Sotoyome Post No. 11, each year; • Healdsburg residents will receive a 20% discount on rental fees; • Nonprofits will receive a 50% to 70% discount on rental fees; and • The parties will work together to develop a long-term capital expenditure plan.

PASSED, APPROVED AND ADOPTED, by the City Council of the City of Healdsburg, this 21st day of June, 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:

Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Packet Pg. 201 Attachment: Resolution (3593 : Villa Chanticleer Operating Agreement)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Partnership With The Healdsburg Unified School District (PEG) PREPARED BY: Malinalli Lopez, Public Info and Community Outreach Coordinator STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Adopt a resolution approving a Professional Services Agreement with the Healdsburg Unified School District for the operation of public access Channel 26 in the amount of $61,425, authorizing the City Manager to execute the agreement on behalf of the City.

COMMUNITY ENGAGEMENT/OUTREACH:

City Staff proposes continuing the partnership with the Healdsburg Unified School District (HUSD) to broadcast or re-broadcast all City Council meetings via local public access channel

26. The goal is to create community engagement and make the meetings accessible to the public who cannot be present and who do not have access to the meetings via the City’s website, Zoom or Facebook.

BACKGROUND:

The Media Center that is currently operating the Public, Education, and Government Operations (PEG) public access channel is located on the Healdsburg High School campus. The PEG program has been managed by staff and students since 2002. In the past, staff of the Healdsburg Unified School District have taught advanced media production classes through which students have had the opportunity to learn and manage broadcasting services. While the PEG operations have run on two channels in the past, staff now proposes to consolidate to one channel due to a lack of available content for two channels as well as the costs of a more expensive server.

DISCUSSION/ANALYSIS:

Under the proposed agreement, PEG Operations will be offered on Channel 26 and the Healdsburg Unified School District will re-broadcast all Healdsburg City Council meetings.

Students will have the opportunity to learn the technical aspects of television production with guidance from the staff of the HUSD.

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In exchange for these services, the City of Healdsburg will help to offset the cost of the class and the server replacement that is needed for the continued operation of PEG.

The operation of Channel 26 also offers an opportunity to have the students create Public Service Announcement (PSA) videos around City of Healdsburg-themed content. In addition, HUSD staff will make themselves available to broadcast PSA videos during times of City-declared emergencies within a 4-hour window of time. HUSD staff will work with students of the advanced video production class to broadcast or re-broadcast all City Council meetings and to provide at least two videos with City-themed content at the rate of at least one video per semester. By continuing this partnership, the City has the opportunity to share video content that is formatted as public services announcements and make City Council meetings more accessible to the public.

ENVIRONMENTAL STEWARDSHIP:

The PEG will not result in a direct or indirect physical impact on the environment. Operations of the public access channel have the potential to offer information on environmental topics including water conservation, upcoming events, and other programming.

ALTERNATIVES:

The City Council could choose not to approve this agreement and direct staff to make changes to the terms, bring the operations of the public access channel in-house, or discontinue the operations of the channel.

FISCAL IMPACT:

Per the proposed agreement, the City would commit $25,000 per fiscal year to offset the costs of one video production class. Additionally, the City would contribute $11,585 toward the cost of a new server that is required for the channel operations in the first year. The combined total cost of the contract is $61,585.

ENVIRONMENTAL ANALYSIS:

The Professional Services Agreement with Healdsburg Unified School District is not a “project” pursuant to California Environmental Quality Act (CEQA) Guidelines 15378(b)(4)(5) because the Professional Services Agreement does not involve a commitment to any specific project that may impact the environment. Therefore, no environmental review is required.

ATTACHMENT(S):

Resolution
Peg Agreement__2022_120721 (003)
EXHIBIT_A_CITY OF HEALDSBURG PEG OPERATIONS

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CITY OF HEALDSBURG
RESOLUTION NO. -2022

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING A PROFESSIONAL SERVICES

AGREEMENT WITH THE HEALDSBURG UNIFIED SCHOOL

DISTRICT FOR THE OPERATION OF PUBLIC ACCESS
CHANNEL 26 IN THE AMOUNT OF $61,425 AND

AUTHORIZING THE CITY MANGER TO EXECUTE THE

AGREEMENT ON BEHALF OF THE CITY
WHEREAS, City Staff proposes continuing the partnership with the Healdsburg Unified School District with the objective of enhancing community engagement and making City Council meetings accessible to the public via public access Channel 26; and WHEREAS, The Media Center that is currently operating the Public, Education, and Government Operations (PEG) public access channel is located on the Healdsburg High School campus and the PEG program has been managed by staff and students since 2002, giving students the opportunity to take advanced media production and learn broadcasting services; and WHEREAS, City staff would like to continue the existing partnership and consolidate the previous two public access channels to one channel offered as Channel 26, and the Healdsburg Unified School District will re-broadcast all Healdsburg City Council meetings, in exchange for these services, the City of Healdsburg will help to offset the cost of the class and the server replacement needed for the continued operation of PEG; and WHEREAS, the operations of Channel 26 offer an opportunity to have the students of Healdsburg High School create Public Service Announcements; and WHEREAS the Healdsburg Unified School District staff will make themselves available to broadcast videos during times of City-declared emergencies.

NOW, THEREFORE, BE IT RESOLVED, the City Council of the City of Healdsburg hereby:

1. Approves the Professional Services Agreement with the Healdsburg Unified School District in the amount of $61,425 to manage the PEG Operations for two years.

2. Authorizes the City Manager to execute the Professional Services Agreement on behalf of the City.

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Packet Pg. 204 Attachment: Resolution (3670 : Partnership with the Healdsburg Unified School District) Resolution No. -2022

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PASSED, APPROVED AND ADOPTED, this 21st day of June 2022, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:

Osvaldo Jimenez, Mayor Raina Allan, City Clerk

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Packet Pg. 205 Attachment: Resolution (3670 : Partnership with the Healdsburg Unified School District) 1 CITY OF HEALDSBURG

PROFESSIONAL SERVICES AGREEMENT

AGREEMENT
This Agreement is made and entered into this 1 day of July, 2022, by and between the City of Healdsburg, a California Municipal Corporation, 401 Grove Street, Healdsburg, California, 95448, hereinafter referred to as "City," and Healdsburg Unified School District hereinafter referred to as "Consultant."

RECITALS
WHEREAS, the City has determined that it requires the following professional services from the Consultant: the consultant will provide re-broadcasting services on Channel 26 managed by HUSD staff and students and also provide video production services as needed.

WHEREAS, Consultant represents and warrants that it is fully qualified to perform such professional services by virtue of specialized experience and training, education, and expertise of its principals and employees. Consultant further represents that it is willing to accept responsibility for performing such services in accordance with the terms and conditions set forth in this Agreement; and WHEREAS, the legislative body of the City on June 21, 2022 by Resolution No. __-2022 authorized the execution of this Agreement on behalf of the City in accordance with the City Municipal Code and/or other applicable law.

NOW, THEREFORE, City and Consultant, for the consideration hereinafter described, mutually agree as follows:

1. DESCRIPTION OF SERVICES OR SCOPE OF WORK
The services to be performed under this Agreement (the “Services”) are as follows: the consultant will provide broadcasting or re-broadcasting services of City Council meetings and Public Service Announcements on Channel 26 supervised by HUSD staff and managed by the students of the advanced video production class. The Services are further described in the Consultant’s proposal (the “Proposal”), which is attached to and made a part of this Agreement as Exhibit A.

2. TERM
The Agreement term will commence on the date of execution and expire on June 30, 2024 unless the Agreement term is amended with a one-year extension, or the Agreement is terminated in accordance with its terms.

3. PAYMENT TERMS AND NOT TO EXCEED AMOUNT
A. City agrees to pay Consultant for Services that are performed in accordance with this Agreement. To be eligible for payment, Consultant invoices must be submitted not more often than monthly to City and list the Services performed and the amounts to be paid according to the cost categories and prices in the Proposal. Invoices from Consultant shall be clearly marked with Consultant’s name, project name, an itemized description of services rendered during the period covered by the invoice, and City’s project account number, if applicable. Invoices shall also contain the total number of hours of work performed under the Agreement by the Consultant and each employee, agent, and

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Packet Pg. 206 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 2 subcontractor of the Consultant performing services hereunder. When the total number of hours of work by the Consultant and any individual employee, agent or subcontractor of the Consultant reaches or exceeds 800 hours, a separate notice shall be provided which shall include an estimate of the time necessary to complete the work described in Exhibit A.

B. In no event will City’s obligation to pay the Consultant under this Agreement exceed $61,585, (the “Not to Exceed Amount”) unless this Agreement is first modified in accordance with its terms. Where the Proposal provides for compensation on a time and materials basis, the Consultant must maintain adequate records to permit inspection and audit of the Consultant's time and material charges under this Agreement. The Consultant will make such records available to City during normal business hours upon reasonable notice. In accordance with California Government Code Section 8546.7, if the Not to Exceed Amount exceeds TEN THOUSAND DOLLARS ($10,000.00), this Agreement and the Consultant’s books and records related to this Agreement shall be subject to the examination and audit of the State Auditor, at the request of City or as part of any audit of the City, for a period of three (3) years after final payment under the Agreement.

4. TIME OF COMPLETION
The Consultant must commence performance of the Services upon receipt of written direction to proceed from the City. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary to meet the standards of performance provided in Section 7 below and to satisfy Consultant’s obligations hereunder. The Consultant will complete the Services in accordance with this Agreement by June 30, 2024 (the “Time of Completion”). The Time of Completion may only be modified by an amendment of the Agreement in accordance with its terms.

5. INDEPENDENT CONTRACTOR
Consultant and City agree that the Consultant will perform the Services as an independent contractor and not as an employee or agent of the City. Consultant expressly warrants not to represent, at any time or in any manner, that Consultant is an employee of the City. Persons employed or utilized by Consultant in the performance of the Services will not be employees or agents of the City. The Consultant is solely responsible for the payment of employment taxes incurred under this Agreement and any similar federal or state taxes.

6. SUBCONTRACTING
Consultant may subcontract portions of the Services upon the prior written approval of the City. The Consultant will be solely responsible for payment for such subcontract services. No contractual relationship will exist between any such subcontractors of the Consultant and the City.

7. STANDARD OF PERFORMANCE
A. Consultant will perform the Services in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices its profession and will prepare all work products required by this Agreement in accordance with those standards. The City shall not control or direct the manner in which Consultant’s services are to be performed. Consultant will comply with all federal, state and local laws and regulations applicable to performance of the Services, including, but not limited to, the California Building Code, the Americans with Disabilities Act, any copyright, patent or trademark

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Packet Pg. 207 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 3 law, and any air pollution control law(s) or regulation(s). Consultant’s failure to comply with any law(s) or regulation(s) applicable to the performance of the work hereunder shall constitute a breach of contract.

B. Consultant shall assign only competent personnel to perform services pursuant to this agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the reassignment of any such persons, Consultant shall, immediately upon receiving notice from the city of such desire of City, reassign such person or persons.

8. OTHER GOVERNMENTAL REGULATIONS
To the extent that this Agreement may be funded by fiscal assistance from another governmental entity, Consultant and any subcontractors shall comply with all applicable rules and regulations to which City is bound by the terms of such fiscal assistance program.

9. USE OF RECYCLED PRODUCTS
Consultant shall endeavor to prepare and submit all reports, written studies, and other printed material on recycled paper to the extent it is available at equal or less cost than virgin paper.

10. INDEMNITY
To the maximum extent permitted by law, Consultant shall, at its own expense, indemnify, defend with counsel acceptable to the City, (which acceptance will not be unreasonably withheld), and hold harmless City and its officers, officials, employees, agents and volunteers ("Indemnitees") from and against any and all liability, loss, damage, claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, civil penalties and fines, expenses and costs (including, without limitation, claims expenses, attorney's fees and costs and fees of litigation) (collectively, "Liability") of every nature, whether actual, alleged or threatened, arising out of or in connection with the Services or Consultant's failure to comply with any of the terms of this Agreement, regardless of any fault or alleged fault of the Indemnitees.

The Consultant's obligation to indemnify, defend and hold harmless under this provision shall not be excused because of the Consultant's inability to evaluate Liability, or because the Consultant evaluates Liability and determines that the Consultant is not or may not be liable. The Consultant must respond within 30 calendar days to any tender for defense and indemnity by the City unless the time for responding is extended by an authorized representative of the City in writing. If the Consultant fails to accept the tender of defense and indemnity within 30 calendar days, in addition to any other remedies authorized by law, so much of the money due or that may become due the Consultant under this Agreement as shall reasonably be considered necessary by the City, may be retained by the City until disposition has been made of the matter subject to tender, or until the Consultant accepts the tender, whichever occurs first.

The Consultant waives any and all rights to express or implied indemnity against the Indemnitees concerning any Liability of the Consultant arising out of or in connection with the Services or Consultant's failure to comply with any of the terms of this Agreement.

Notwithstanding the foregoing, to the extent this Agreement is a "construction contract" as defined by California Civil Code § 2783, as may be amended from time to time, the Consultant's duty to indemnify under this provision shall not apply when to do so would be prohibited by California Civil Code § 2782, as may be amended from time to time.

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Packet Pg. 208 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 4 Notwithstanding the foregoing, to the extent that the Services include design professional services subject to Cal. Civil Code § 2782.8, as amended from time to time, Consultant's duty to indemnify shall only be to the maximum extent permitted by Civil Code § 2782.8.

In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

The defense and indemnification obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement.

Consultant/Subcontractor's responsibility for such defense and indemnity obligations shall survive the termination or completion of this Agreement for the full period of time allowed by law.

11. INSURANCE
a. All required insurance must be provided in the form of “occurrence”-type policies underwritten by admitted insurers in the State of California with a rating of A or better from the current year Best Rating Guide. All policies must be issued at the expense of the Consultant and must be maintained at the Consultant’s expense throughout the performance of the Work. Consultant shall maintain insurance as required by this contract to the fullest amount allowed by law. The City may request a declaration page of the policy.
b. The limits of the Commercial General Liability (including bodily injury, personal injury and property damage) insurance shall be:
$2,000,000 per occurrence
$2,000,000 aggregate
c. If the work to be performed involves vehicles or vehicular equipment, the Automobile insurance limit shall be:
$1,000,000 per accident for bodily injury and property damage Automobile coverage should be at least as broad as Insurance Services Automobile Liability form CA 0001 Code 1 (“any auto”). No endorsement may be attached limiting the coverage.

Anything less than ‘any auto’ coverage must be approved by the Risk Manager prior to approval.

If the Risk Manager accepts anything less than ‘any auto’, additional information such as schedule of covered autos or proof of personal auto liability coverage, may be required by the City.
d. Worker’s Compensation Insurance. Proof of Workers Compensation and Employers Liability insurance as required by any applicable law, regulation, or statute, including the provisions of Division IV of the Labor Code of the State of California, and any act or acts amending it.

Worker's compensation insurance must be for Statutory Limits and must cover the full liability

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Packet Pg. 209 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 5 of the Consultant. The Consultant’s Employer’s Liability Insurance must be in an amount no less than $1,000,000.00 per occurrence. The workers’ compensation policy must be endorsed with a waiver of subrogation. The insurance company, in its endorsement, must agree to waive all rights of subrogation against the City, its officers, officials, employees, agents, and volunteers for losses paid under the terms of such policy.
e. Umbrella/Excess Policy. The limits of insurance required under this Contract may be satisfied by a combination of primary and umbrella or excess Insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a provision that such coverage shall also apply on a primary and non-contributory basis for the benefit of the City (if agreed to in a written contract or agreement) before the City’s own insurance or self-insurance shall be called upon to protect it as a named insured.
f. If applicable, the Consultant, at its own cost and expense, must maintain for the period covered by this Agreement professional liability insurance in an amount not less than TWO MILLION DOLLARS ($2,000,000) covering errors and omissions. Any deductible or self-insured retention under the required professional liability insurance may not exceed $150,000 per claim. g. The City’s Risk Manager may increase or decrease the insurance requirements and limits set forth in those cases in which he/she determines that special circumstances justify such an increase or decrease.
h. Both the General Liability and Auto endorsements must add the City, its officials, officers, employees, agents, and volunteers as an additional insured (“Additional Insured”). The Additional Insured coverage under the Consultant’s general liability policy shall be “primary and non-contributory” and the Consultant’s coverage will not seek contribution from the City’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13. i. It shall be a requirement under this Agreement that any available insurance proceeds broader than or in excess of the specified minimum insurance coverage requirements and/or limits shall be available to the Additional Insured. Furthermore, the requirements for coverage and limits shall be (1) the minimum coverage and limits specified in this Agreement; or (2) the broader coverage and maximum limits of coverage of any insurance policy or proceeds available to the named insured; whichever is greater.
j. The Consultant shall provide the City with a 30-day written notice of any reduction or cancellation of such insurance required to be furnished by the Consultant and include a severability of interest clause acceptable to the City and if requested by the City. k. If an Umbrella or Excess Policy is used to satisfy the requirements, an endorsement must be provided from the insurance carrier/broker and that Umbrella/Excess Policy ‘follows form’ or is ‘continuous’ to the General liability and/ Auto liability policy in addition to the required endorsement.
l. Examples of City approved insurance forms are included in this PSA package. If the Consultant’s insurance carrier chooses to use forms other than the City’s approved forms, such forms shall be subject to the approval of the City. If the Consultant provides policy pages instead of an endorsement the insurance agent/broker will be asked to sign, initial, and date all applicable sections of the policy that meet the City’s insurance requirements.

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Packet Pg. 210 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 6 m. All self-insured retentions (SIR) must be disclosed to City for approval and shall not reduce the limits of liability. Policies containing any self-insured retention (SIR) provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named insured or the City. The City reserves the right to obtain a full certified copy of any insurance policy and endorsements.

Failure to exercise this right shall not constitute a waiver of right exercise later. n. Subcontractors
i. Consultant agrees to include with all subcontractors in their subcontract the same requirements and provisions of this contract including the indemnity and insurance requirements to the extent they apply to the scope of the Subcontractor’s work. Consultant shall require all sub-contractors to provide a valid certificate of insurance and the required endorsements included in the Contract prior to commencement of any work and the Consultant will provide proof of compliance, upon request, to the City. ii. Any Subcontractor hired by the Consultant agrees to be bound to the Consultant and the City in the same manner and to the same extent as Consultant is bound to the City under the Contract. Subcontractor further agrees to include the same requirements and provisions of this Contract, including the indemnity and insurance requirements, with any Subcontractor to the extent they apply to the scope of the Subcontractor's work. A copy of the contract indemnity and insurance provisions will be furnished to the Subcontractor upon request

12. NON-DISCRIMINATION
During the performance of this Agreement, Consultant will not discriminate against any employee of the Consultant or applicant for employment because of race, religion, creed, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation.

The Consultant will take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, religion, creed, color, national origin, age, physical or mental handicap or disability, medical condition, marital status, sex, or sexual orientation.

13. LICENSES AND PERMITS
A. BUSINESS LICENSE
Before the City will issue a notice to proceed with the Services, to the extent the business license requirements of the Healdsburg Municipal Code apply, the Consultant and any subcontractors subject to the requirements must acquire at their sole expense a business license from City in accordance with the Code. Such licenses must be kept valid throughout the Agreement term.

B. OTHER LICENSES AND PERMITS
Consultant represents and warrants to City that it has an established trade, occupation, or business in the same nature of services Consultant is performing under this Agreement. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors have all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice in their respective professions. Consultant expressly represents and warrants to City that Consultant and its employees, agents, and any subcontractors shall, at their sole cost and expense, keep in effect at all times during the term of this Agreement any licenses, permits, and approvals that are legally required to practice their respective professions.

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Packet Pg. 211 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 7 14. OWNERSHIP OF WORK PRODUCTS AND TREATMENT OF DOCUMENTS All plans, specifications, reports, designs and other documents prepared by Consultant pursuant to this Agreement shall be and remain the property of the City. Any modification or reuse of such documents by the City without Consultant's prior written consent will be at the City’s sole risk. Except as may be otherwise required by law, Consultant will disclose no data, plans, specifications, reports or other documents pertaining to the Services without the prior written consent of the City.

15. ALTERNATIVE DISPUTE RESOLUTION
If any dispute arises between the parties that cannot be settled after engaging in good faith negotiations, City and Consultant agree to resolve the dispute in accordance with the following:

A. Each party shall designate a senior management or executive level representative to negotiate any dispute.

B. The representatives shall attempt, through good faith negotiations, to resolve the dispute by any means within their authority.

C. If the issue remains unresolved after ten (10) days of good faith negotiations, the parties shall attempt to resolve the disagreement by negotiation between legal counsel. If the above process fails, the parties shall resolve any remaining disputes through mediation to expedite the resolution of the dispute.

D. The mediation process shall provide for the selection within 15 days of both parties of a disinterested third person as mediator, shall be commenced within 30 days and shall be concluded within 15 days from the commencement of the mediation.

E. The parties shall equally bear the costs of any third party in any alternative dispute resolution process.

F. The alternative dispute resolution process is a material condition to this Agreement and must be exhausted as an administrative remedy prior to either Party initiating legal action. This alternative dispute resolution process is not intended to, nor shall be construed to, change the time periods for filing claims or action specified by Government Code section 900, et seq.

16. TERMINATION AND REMEDIES
A. City may terminate this Agreement for convenience by giving at least 10 days’ written notice to Consultant specifying the termination effective date. Upon receipt of such notice, Consultant may continue performance of the Services through the date of termination. City shall pay Consultant for all Services actually performed in accordance with this Agreement through the termination effective date. City, however, may condition payment of such compensation upon Consultant delivering to City any and all documents provided to or prepared by Consultant, and any and all documents provided to or prepared by City for Consultant, in connection with this Agreement. Such material may consist of photographs, computer software, video and audio tapes and other materials.

B. If Consultant materially breaches any term of this Agreement, in addition to any other remedies the City may have at law or equity, the City may:

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Packet Pg. 212 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 8 1. Terminate the Agreement by notice to the Consultant specifying the termination effective date;

2. Retain, and/or recover from the Consultant at no additional cost to the City, the plans, specifications, drawings, reports, and other design documents and work products prepared by the Consultant, whether or not completed;

3. Complete the unfinished Services itself or have the unfinished Services completed, and/or;

4. Charge Consultant or deduct from monies that may be due or become due the Consultant under this Agreement, the difference between the cost of completing the unfinished Services pursuant to this Agreement and the amount that would otherwise be due Consultant had Consultant completed the Services in accordance with this Agreement.

17. BINDING EFFECT AND ASSIGNMENT PROHIBITION
This Agreement is binding upon City, Consultant, and their successors. Except as otherwise provided herein, neither City nor Consultant may assign, sublet or transfer its interest in this Agreement or any part thereof without the prior written consent of the other, and any purported assignment without such consent will be void.

18. REPRESENTATIVES
A. City representative for purposes of this Agreement will be Public Information Officer Malinalli López. The Consultant representative for purposes of this Agreement will be Superintendent Chris Vanden Heuvel. The parties' designated representative will be the primary contact person regarding the performance of the Services. The parties intend that their designated representatives will cooperate in all matters regarding this Agreement and in such a manner so as to achieve the performance of the Services in a timely and expeditious fashion. Consultant shall not substitute or replace primary representative without the approval of the City.

B. Notices:

Any written notice to Consultant shall be sent to:

Chris Vanden Heuvel
Healdsburg Unified School District
1028 Prince Avenue
Healdsburg, CA 95448
Any written notice to City shall be sent to:

City Manager Jeff Kay
City of Healdsburg
401 Grove Street
Healdsburg, CA 95448

19. INTEGRATION AND AMENDMENT

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Packet Pg. 213 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 9 This Agreement represents the entire and integrated agreement between City and Consultant and supersedes all prior negotiations, representations or agreements, whether written or oral. If a discrepancy, disagreement, ambiguity, inconsistency or difference in interpretation of terms arises as to terms or provisions of this Agreement and any Exhibit(s) attached to this Agreement, this Agreement shall control and shall be deemed to reflect the intent of the Parties with respect to the subject matter hereof. This Agreement may only be amended by a writing signed by a representative authorized to bind the Consultant and a representative authorized to bind the City.

20. CONFLICT OF INTEREST PROHIBITION
City and Consultant will comply with the requirements of the City’s Conflict of Interest Code adopted pursuant to the provisions of California Government Code Section 87300 and following, the Political Reform Act (California Government Code Section 81000 and following), the regulations promulgated by the Fair Political Practices Commission (Title 2, Section 18110 and following of the California Code of Regulations), California Government Code Section 1090 and following, and any other ethics laws applicable to the performance of the Services and/or this Agreement. The Consultant may be required to file with the City Clerk a completed Form 700 before commencing performance of the Services unless the City Clerk determines that completion of a Form 700 is not required, pursuant to the City’s Conflict of Interest Code. Form 700 forms are available from the City Clerk.

The Consultant may not perform Services for any other person or entity that, pursuant to any applicable law or regulation, would result in a conflict of interest or would otherwise be prohibited with respect to the Consultant’s obligations pursuant to this Agreement. The Consultant agrees to cooperate fully with the City and to provide any necessary and appropriate information requested by the City or any authorized representative concerning potential conflicts of interest or prohibitions concerning the Consultant’s obligations pursuant to this Agreement.

Consultant may not employ any City official, officer, or employee in the performance of the Services, nor may any official, officer or employee of the City have any financial interest in this Agreement that would violate California Government Code Section 1090 and following. Consultant hereby warrants that it is not now, nor has it been in the previous twelve (12) months, an employee, agent, appointee, or official of the City. If Consultant was an employee, agent, appointee, or official of the City in the previous twelve months, Consultant warrants that it did not participate in any manner in the forming of this Agreement. Consultant understands that, if this Agreement is made in violation of Government Code Section 1090 and following, the entire Agreement is void and Consultant will not be entitled to any compensation for Consultant’s performance of the Services, including reimbursement of expenses, and Consultant will be required to reimburse the City for any sums paid to the Consultant under this Agreement. Consultant understands that, in addition to the foregoing, penalties for violating Government Code Section 1090 may include criminal prosecution and disqualification from holding public office in the State of California.

Any violation by the Consultant of the requirements of this provision will constitute a material breach of this Agreement, and the City reserves all its rights and remedies at law and equity concerning any such violations.

21. APPLICABLE LAW AND VENUE
The laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and the interpretation of this Agreement. Any action or proceeding that is initiated or

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Packet Pg. 214 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District) 10 undertaken to enforce or interpret any provision, performance, obligation or covenant set forth in this Agreement shall be brought in a state court in Sonoma County.

22. RECOVERY OF ATTORNEY’S FEES
If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret any term of this Agreement, the prevailing party will be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

23. SEVERABILITY
If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged will remain in full force and effect.

The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement.

24. COUNTERPARTS
This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

City CONSULTANT
By: ________________________________ By: ______________________________ Jeffrey Kay, City Manager
By: _______________________________
Andrew J. Sturmfels, Administrative Services Director/
Risk Manager
ATTEST:

By: ________________________________
Raina Allan, City Clerk
APPROVED AS TO FORM:

By: ________________________________
Samantha W. Zutler, City Attorney
Exhibits: Exhibit A – Consultant’s Proposal

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Packet Pg. 215 Attachment: Peg Agreement__2022_120721 (003) (3670 : Partnership with the Healdsburg Unified School District)

CITY OF HEALDSBURG
PEG (Public, Educational and Governmental) CHANNEL OPERATIONS

SCOPE OF SERVICES
Exhibit “A”
July 1, 2022-June 30, 2024

DESCRIPTION OF SERVICES & SCOPE OF WORK
The services performed under this Agreement are as follows:
• HUSD will be responsible for running the PEG Channel operations on one station, Channel 26 which will serve to fill a need in the community for public service announcements generated by the City as needed and for those who do not have access to the internet or cell phone service especially during emergencies. • The HUSD will offer classes to give students the opportunity to be involved with PEG Operations. Classes may include students from the advanced video production and/or broadcast journalism. Students involved with the PEG Operations will assist in managing and either broadcast or re-broadcast the City Council meetings and City Public Service Announcement videos on the Channel 26 operations under the supervision of the HUSD staff to learn advance broadcasting production and techniques. The City of Healdsburg agrees to help offset some of the cost of the classes and server within the scope of this agreement.
• HUSD agrees to either broadcast or re-broadcast all Healdsburg City Council meetings via Channel 26. The City of Healdsburg agrees to provide the video file the City Council meetings to HUSD staff for the purpose of re-broadcasting on Channel 26. • HUSD agrees to produce educational videos for re-broadcasting use on Channel 26 and YouTube with input from the City of Healdsburg under the terms of this agreement.

The videos may be produced in collaboration with both parties and under deadlines that are both agreeable to HUSD and to the City of Healdsburg at least two videos per academic year (or one per semester).
• HUSD staff will coordinate summer PEG operations through remote access and may occasionally need to be present in person depending on the operational needs of the server.
• The HUSD staff will monitor and do general day-to-day upkeep on PEG Equipment as needed.

City of Healdsburg PEG Equipment and Retention of Fiscal Assets • The City of Healdsburg will partner with the HUSD to assist in providing content ideas and themes to the students of the advanced production class for educational videos pertaining to the City of Healdsburg.

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Packet Pg. 216 Attachment: EXHIBIT_A_CITY OF HEALDSBURG PEG OPERATIONS (3670 : Partnership with the Healdsburg Unified School District) • The City of Healdsburg will commit to funding on a two-year term basis from July 1, 2022, to June 30, 2024 to HUSD for PEG Operations for $25,000 per fiscal year to fund one video production class and also provide a one-time only amount of $11,585 for the purchase of a new server. The total amount needed for the two-year term basis is $61,585. • The City of Healdsburg commits to providing the needed resources for content when collaborating with the HUSD on City themed videos for advanced video production and broadcast journalism students. The City may make recommendations on ideas for content, yet any videos produced will be under the supervision of HUSD staff. City staff may recommend content ideas, local guest speakers and ideas for b-roll and location shoots. The HUSD will agree to collect location and talent releases for the video production. • The City of Healdsburg will be granted access to the produced videos to re-broadcast them out on social media including YouTube as needed.
• HUSD will agree to provide the City of Healdsburg a programming schedule on a quarterly basis and commit to designating a regular time for either broadcasting or re-broadcasting the City Council meetings for the City of Healdsburg.
• HUSD agrees to broadcast Public Service Announcements within a 4-hour window during City-declared emergencies.

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Packet Pg. 217 Attachment: EXHIBIT_A_CITY OF HEALDSBURG PEG OPERATIONS (3670 : Partnership with the Healdsburg Unified School District)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 21, 2022
SUBJECT: Consider the adoption of Water and Wastewater rates PREPARED BY: Terry Crowley, Utilities Director
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

1. Conduct a public hearing in accordance with Proposition 218 for the proposed changes to the water and wastewater rates; and

2. Adopt a Resolution determining that there was no majority protest of the proposed water and wastewater services rates, approving updated water and wastewater services rates, and superseding the existing rates established by Resolution No. 34-2016.

COMMUNITY ENGAGEMENT/OUTREACH:

In March the City Council was presented with an overview of the City’s Water and Wastewater Departments financial outlook and proposed rate increases. Proposition 218 requires that the setting of municipal water and wastewater rates include community engagement at City Council meetings and an open and public rate protest process. On April 18, 2022 the City Council again was presented with the financial outlook and proposed rate increases. On May 3, 2022 notices of a public hearing, to be held June 21, 2022, for the final adoption of the proposed rates and the process to protest the rate increase were mailed to utility customers and property owners within Healdsburg.

BACKGROUND:

On March 21, 2022, Mark Hildebrand of Hildebrand Consulting presented the City Council with an overview of water and wastewater financials and proposed rate increases. As presented, recommended rate increases over the next five-year period primarily account for revenue losses due to the drought, higher than average inflation, and the need to fund capital replacement projects for the Water and Wastewater departments.

The previous series of approved rate increases ended in July of 2020. Due to the ongoing pandemic and economic impacts, staff delayed the presentation and possible implementation of a

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new rate increases one year to allow for the uncertainty of the economy. During that time, the City experienced a historic drought and responded with significant levels of water conservation.

While this conservation was necessary due to limited water supplies, it also resulted in a significant reduction in operating revenue. The proposed rate increases account for the current drought as well as future droughts while also developing sufficient funding to continue replacing aging infrastructure that has become increasing unreliable.

On April 18, 2022, the Council accepted the Water and Wastewater Rate Study as a basis for proposing multi-year rate increases for the City’s Water and Wastewater Funds; and directed staff to prepare and mail, as required by law, a notice of public hearing on the proposed water and wastewater rates, with the public hearing to be held on June 21, 2022.

DISCUSSION/ANALYSIS:

Two important rules when setting utility rates are; 1) rates must cover the full operating and capital replacement costs of the utility and 2) rates must be fair and equitable to all users. The final 2022 Water and Wastewater Rate Study includes a multi-year financial plan, updated costof-service analysis, and an update to existing rate structures.

Primary objectives of the rate study are to:
i. Ensure that the rates being charged by the City are legally defensible - Rates must reflect the cost of providing service by proportionately assigning costs to each customer group based on service requirements and demands.
ii. Minimize impact to rate payers – Particular consideration will be given to the economic conditions created by the pandemic as well as the financial impact of the most recent climate induced drought.
iii. Generate sufficient rate revenue to meet each utility’s financial obligations related to operations, debt service, and capital improvement needs - Maintaining strong financial performance is important for credit ratings, which affects the utilities’ interest rates and ability to obtain debt in the future.
iv. Keep rates administratively simple and easy to explain.

The attached 2022 Water and Wastewater Rate Study presents a five-year financial plan for both the Water and Wastewater Funds. The study reflects the City's FY 2021-22 budget and financial conditions, as well as the City's debt service obligations and capital improvement plan during the five-year planning period extending through FY 2026-27.

Water Utility
The City has taken and continues to take significant steps to control utility costs. However, drought conditions and water use restrictions have resulted in reduced water sales, reducing the water fund balance to a point where no funds are available to support capital projects.

Additionally, the City risks not meeting required debt covenants on outstanding debt, which require the City to maintain water rates and other revenues such that total revenues less operating and maintenance costs are at least 1.20 times the annual debt service payments.

At present, the financial condition of the City's water utility is characterized with some basic facts. The water utility has:

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• Estimated current annual operating and maintenance costs, including debt service obligations, totaling just over $6.2 million in FY 2023 • Insufficient current revenues to meet debt service coverage requirements, creating a need for a water rate increase.
• The Water Department’s debt payments continue to consume roughly 19% of the annual operations budget.

Proposed rate increases provide cash to maintain ongoing operations as well as provide funds to meet the scaled-back needs of the 5-year capital improvement program.

As a result of the forgoing, it is recommended that the City increase the overall level of water rate revenues as indicated below:

July 2022 Utility Billing 2%
July 2023 Utility Billing 8%
July 2024 Utility Billing 8%
July 2025 Utility Billing 5%
July 2026 Utility Billing 5%
Early in the development of the financial plan and associated rate increases, the series of rate increases were much higher due to the need to fund deferred replacements of aging water infrastructure. To reduce these rate increases, Staff analyzed forecasted costs to identify potential projects and programs that could either be scaled back or deferred until future years. In doing so (deferring costs and projects to future years), the proposed rate increases were reduced to the amounts shown.

Of note is that while the first-year water rate increase is indicated at 2%, a restructuring of costs allocations (as required by Prop 218) will result in a larger rate increase for most water customers. The rate changes in the first year range from a cost decrease of roughly 2% to a rate increase of roughly 10.8%. Larger users will see increase toward the higher side of this range.

The financial plan analysis includes a reasonable estimate for a partial rebound in water demand during the five-year planning period. With this rebound and the proposed water rate adjustments, annual water rate revenue is estimated to increase from FY2022’s forecasted $5.0 million (low due to drought) to $8.7 million in FY 2027. The future revenues assume a slow but steady rebound in the water demands. Actual usage may lag the forecast resulting in lower revenues.

Wastewater Utility
Between FY2016 and FY2022, no rate increases were imposed for Wastewater customers. This was largely due to the ability to use unrestricted fund balance to support both operational needs as well as a capital improvement plan focused on meeting increased regulatory requirements.

Additionally, in October of 2016 the City Council adjusted the Sewer Season Average (SSA) calculation which resulted in a roughly 2% decrease in residential sewer rates.

In considering the forecasted funding needs over the next five-years, it is no longer possible to

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defer rate increases while maintain ongoing operations and adequately support capital replacements. Therefore, rate increases are proposed to cover current and estimated future operating and maintenance costs, debt service payments, and capital program needs, as well as maintain a contingency reserve and capital reserve. At present, the financial condition of the City's wastewater utility is characterized with the following basic statistics. The wastewater utility has:
• Estimated current annual operating and maintenance costs, including debt service obligations, totaling about $8.0 million, with roughly $700,000 transferred to support Capital Improvement Projects.
• Current annual Operating Fund revenues of about $7.1 million. • The Wastewater Department’s debt payments continue to consume roughly 30% of the annual operations budget.
• The proposed rate increase allows the ability to meet the financial and service obligations of the wastewater utility and fund a limited 5-year capital improvement plan.

As a result of the above, the following rate increases are proposed for the City’s Wastewater Fund:

July 2022 Utility Billing 8%
July 2023 Utility Billing 8%
July 2024 Utility Billing 7%
July 2025 Utility Billing 6%
July 2026 Utility Billing 6%
As with the Water Capital Improvement Plan, staff removed several identified and needed replacement projects to reduce the proposed rate increase to the amounts shown above. While this helps ease the immediate impact of rate increases, the identified work will remain and require funding in future years. The rates shown above do support ongoing operations, debt service, and a limited amount of capital replacement projects. As with water revenues, conservation will impact the level of revenue generated. If wastewater usage remains low and efficient, forecasted revenues may not be realized.

Overall Rate Setting and Impact
The City's water and wastewater rates must meet the constitutional requirements that they reflect the cost of providing service, and costs are allocated to customers in proportion to service requirements. The 2020 Water and Wastewater Rate Study contains a detailed explanation of the financial condition of each utility, the need for increased water and wastewater utility revenues, the basis for the cost-of-service analysis. Proposed water and wastewater rate schedules reflect the revenue needs of the utilities, as determined with the financial planning models, as well as updated cost of service analyses.

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The table below shows the bill impact for typical residential dwellings. Usage is shown in both hundred-cubic feet (HCF) and gallons per capita/person per day (GPCD).

Monthly Usage
(HCF / GPCD)
Current Proposed Change /
Month
Single Family - Water 6 / 60 $56.25 $62.21 $5.96
Single Family Sewer 5 / 50 $89.38 $96.31 $6.93
Apartment (8 units) - Water 40 / 55 $349.44 $364.80 $15.36 Apartment (8 units) - Sewer 40 / 55 $692.40 $704.80 $12.40 The scheduled public hearing for June 21, 2022 during the Council’s regularly scheduled meeting will allow the City Council to receive public input on the recommended water and wastewater rate increases. As required by Prop 218, public hearing notices were mailed to all City utility property owners 45 days prior to the public hearing. Absent a majority protest on the proposed rates, as tallied during the June 21, 2022 public hearing, the Council can adopt the proposed water and wastewater rates.

ENVIRONMENTAL STEWARDSHIP:

Continued funding of the City’s water and wastewater departments allows the City to maintain public water and sewer services within regulatory compliance. Meeting state and regional regulatory compliance in the provisioning of these two public health services, helps lessen the City’s impact on the natural environment surrounding Healdsburg.

ALTERNATIVES:

Council may, after receiving public input, choose not to approve of the proposed rate increases and provide further direction to staff. Staff does not recommend this alternative as detailed within the Rate Study, there is a clear need to increase water and wastewater rates in order for the City to continue to provide adequate levels of water and wastewater services.

FISCAL IMPACT:

Adopting the resolution will provide increased water and wastewater revenues to enable the City to meet operational and debt service requirements. Since the financial model and rate structures for both the Water and Wastewater Utilities are linked to water conservation, close attention over the coming years will be required to assure actual revenues are supporting planned expenses.

Without rate increases, these two funds will likely not meet debt service requirements, ongoing maintenance costs, and fall further behind in necessary planned capital replacements.

ENVIRONMENTAL ANALYSIS:

Pursuant to Title 14, the California Code of Regulations, Section 15302(c) of the California Environmental Quality Act ("CEQA") guidelines, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):
2022 Water and Wastewater Rate Study - Final
Resolution - Water & Wastewater Rates

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Packet Pg. 223 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) April 11, 2022
Terry Crowley, PE., Utility Director
City of Healdsburg
401 Grove St.

Healdsburg, CA 95448
Re: 2021 Water and Wastewater Rate Study
Dear Mr. Crowley,
Hildebrand Consulting is pleased to present this 2022 Water and Wastewater Rate Study (Study) for the City of Healdsburg (City). We appreciate the assistance provided by you and all of the members of the City staff who participated in the Study, as well as the input and guidance provided by the City Council.

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

Sincerely,
Mark Hildebrand
Hildebrand Consulting, LLC
Enclosure

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Packet Pg. 224 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Table of Contents
1 TABLE OF CONTENTS
INTRODUCTION.................................................................................5 UTILITY BACKGROUND.......................................................................................................... 5 SCOPE &OBJECTIVES OF STUDY ............................................................................................ 8 STUDY METHODOLOGY ......................................................................................................... 8 PROCESS ........................................................................................................................... 9 REPORT ORGANIZATION ..................................................................................................... 10 WATER RATE STUDY......................................................................... 11 WATER UTILITY FINANCIAL PLAN.......................................................................................... 11 WATER UTILITY BEGINNING FUND BALANCES ......................................................................... 12 CUSTOMER GROWTH.......................................................................................................... 12 WATER UTILITY RATE REVENUE............................................................................................ 12 WATER UTILITY NON-RATE REVENUES.................................................................................. 13 WATER UTILITY OPERATING AND DEBT EXPENSES................................................................... 14 DEBT SERVICE COVERAGE ................................................................................................... 15 COST ESCALATION............................................................................................................. 16 WATER UTILITY CAPITAL IMPROVEMENT PROGRAM.................................................................. 16 WATER UTILITY FUNDS....................................................................................................... 17 CASH RESERVE POLICIES .................................................................................................... 19 PROPOSED RATE REVENUE INCREASES.................................................................................. 20 WATER COST OF SERVICE & RATE STRUCTURE ....................................................................... 22

2.13.1 Current Water Rates .....................................................................................................................................23

2.13.2 Customer Statistics.......................................................................................................................................25

2.13.3 Meter Equivalencies......................................................................................................................................26

2.13.4 Water Rate Calculations...............................................................................................................................28

2.13.5 Service Charges.............................................................................................................................................31

2.13.6 Water Usage Rates .......................................................................................................................................32

2.13.7 Proposed Water Rate Schedules..................................................................................................................32 PASSALACQUA PUMP-STATION PUMPING SURCHARGE ............................................................ 33

2.14.1 Source Data...................................................................................................................................................35

2.14.2 Calculations ..................................................................................................................................................36 SPECIAL METER MAINTENANCE CHARGE................................................................................ 42 WATER SHORTAGE RATE SURCHARGE ................................................................................... 44 WASTEWATER RATE STUDY .............................................................. 47 WASTEWATER UTILITY FINANCIAL PLAN................................................................................. 47 WASTEWATER UTILITY BEGINNING FUND BALANCES................................................................ 48 CUSTOMER GROWTH.......................................................................................................... 48 WASTEWATER UTILITY RATE REVENUE .................................................................................. 48

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2 WASTEWATER UTILITY NON-RATE REVENUES......................................................................... 49 WASTEWATER UTILITY OPERATING AND DEBT EXPENSES ......................................................... 50 DEBT SERVICE COVERAGE ................................................................................................... 51 COST ESCALATION............................................................................................................. 52 WASTEWATER UTILITY CAPITAL IMPROVEMENT PROGRAM ........................................................ 52 WASTEWATER UTILITY FUNDS.............................................................................................. 53 CASH RESERVE POLICIES .................................................................................................... 55 PROPOSED RATE REVENUE INCREASES.................................................................................. 56 WASTEWATER COST OF SERVICE & RATE STRUCTURE .............................................................. 58

3.13.1 General Methodology ...................................................................................................................................58

3.13.2 Current Wastewater Rates ...........................................................................................................................59

3.13.3 Customer Account Data and Sewer Flow and Loading Estimates ............................................................60

3.13.4 Wastewater Cost of Service & Rate Design .................................................................................................63

3.13.5 Special Rates.................................................................................................................................................67

3.13.6 Proposed Wastewater Rate Schedule .........................................................................................................69 CONCLUSION .................................................................................. 71

LIST OF TABLES
Table 1: Water Utility FY 2021/22 Beginning Cash Balance (rounded) ...................................... 12 Table 2: Recommended Water Rate Revenue Increase.............................................................. 21 Table 3: Current Fixed Monthly Service Charges ........................................................................ 24 Table 4: Rated Flow Capacity by Meter Size................................................................................ 27 Table 5: Summary of Water Service Connections and Water Usage.......................................... 27 Table 6: FY 2022/23 Calculation of Unit Costs............................................................................. 31 Table 7: Proposed Monthly Service Charges............................................................................... 32 Table 8: Annual Costs for the Passalacqua Pump Station.......................................................... 37 Table 9: Above Pump Station Estimated Build-Out Water Demand.......................................... 38 Table 10: Estimated Annual Cash Flows for the Passalacqua Pump Station ............................ 39 Table 11: Passalacqua Pump Station Pumping Surcharge Schedule........................................ 40 Table 12: Meter Maintenance Charge Calculation...................................................................... 43 Table 13: Proposed Water Shortage Surcharges and Capital Spending Reductions................ 46 Table 14: Wastewater Utility FY 2021/22 Beginning Cash Balance (rounded)........................... 48 Table 15: Recommended Wastewater Rate Revenue Increase.................................................. 56 Table 16: Current Wastewater Rates ........................................................................................... 60 Table 17: Wastewater Customer Account Data and Estimated Sewer Flows and Loadings..... 62 Table 18: Determination of Unit Costs ........................................................................................ 63 Table 19: Allocation of Sewer Costs to Users1............................................................................. 65

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3 Table 20: Wastewater Rate Determination for FY 2021/22......................................................... 66 Table 21: Current and Proposed Wastewater Rates for FY 2022/23........................................... 70

LIST OF FIGURES
Figure 1: City Service Area as shown in 2015 UWMP Update........................................................ 7 Figure 2: Budgeted Water Utility Revenue Categories (FY 2021/22) .......................................... 14 Figure 3: Water Utility Operating & Debt Expenses (FY 2021/22) ............................................... 15 Figure 4: Water Utility Historic and projected capital spending ................................................ 17 Figure 5: Water Utility Cash Flow Schematic Diagram ............................................................... 18 Figure 6: Water Utility Financial Projection with Recommended Rate Increases ..................... 22 Figure 7: Budgeted Wastewater Utility Revenue Categories (FY 2021/22) ................................ 50 Figure 8: Wastewater Utility Operating & Debt Expenses (FY 2021/22) ..................................... 51 Figure 9: Wastewater Utility Historic and Projected Capital Spending ..................................... 53 Figure 10: Wastewater Utility Cash Flow Schematic Diagram ................................................... 53 Figure 11: Wastewater Financial Projection with Recommended Rate Increases .................... 57

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

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4 List of Acronyms
ADU accessory dwelling unit
AF acre-feet (measure of water volume)
AWWA American Water Works Association
BOD biochemical oxygen demand (BOD)
HCF hundreds (centum) of cubic feet (measure of water volume) CIP capital improvement program
COS cost of service
CSA County Service Area
DCR debt service coverage ratio
DU dwelling unit
ESFD equivalent single-family dwellings
FY fiscal year (which ends on June 30 for the City)
HOA homeowner association
O&M operations and maintenance
PayGo “pay as you go” (i.e., cash financing for capital projects) SWRCB California State Water Resources Control Board
SSA seasonal sewer average
TSS total suspended solids
UWMP Urban Water Management Plan
WWTF Wastewater Treatment, Reclamation and Disposal Facility

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5 INTRODUCTION
Hildebrand Consulting, LLC has been retained by City of Healdsburg (City) to develop five-year financial plans and to update user rates for the City’s water and sewer utilities. The purpose of this Study is to ensure that each utility is meeting financial obligations for ongoing operation and maintenance, debt service, and capital improvements while maintaining prudent financial reserves. The last comprehensive rate study was completed in 2016 (Water and Wastewater Financial Plans and Rate Study, March 9, 2016, The Reed Group, Inc.), and the most recent adjustments to the level of water rates occurred in July 2020 (a 3% increase), while the wastewater rates have not been adjusted since July 2016 (a 2% decrease).

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

UTILITY BACKGROUND
The City of Healdsburg is located in the County of Sonoma (County), approximately 12 miles north of the City of Santa Rosa. Healdsburg is within the nine-county San Francisco Bay Region. The location of Healdsburg in California is shown in Figure 3-1.

The City of Healdsburg is located in an inland valley between Highway 101 and the Russian River, which flows southward to the east of the City and crosses through the southern portion of the City in a westerly direction. The City’s water service area is approximately four square miles, roughly equivalent to the City Limit. The potable water distribution system contains three pressure zones that are served by six storage reservoirs. Figure 1, taken from the City’s 2015 Urban Water Management Plan (UWMP) shows the City Limit, sphere of influence, and water distribution areas, which includes County Service Area #41 (previously #24). Since the mid-1990s, the City has sold wholesale water to Sonoma County under the County’s operation of the Fitch Mountain CSA #41, which is a small water system located outside of the City’s limits.

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6 The wastewater collection system consists of a network of underground pipelines that collect and convey raw wastewater from individual user connections to the City’s tertiary level wastewater treatment plant, known as the City of Healdsburg’s Wastewater Treatment, Reclamation and Disposal Facility (WWTF). The WWTF treats all of the City’s wastewater to Title 22 recycled water standards. The WWTF discharges the treated effluent year-round to a former gravel extraction pit (Basalt Pond) for percolation into the underlying groundwater basin, which is hydrologically connected to the Russian River.

The Healdsburg City Council is the governing entity of the City. The Council consists of five council members that serve four-year terms and appoint a Mayor once per year.

The Council sets policy and adopts a budget for the City bi-annually.

Historically, the City’s economy was supported by agriculture and logging. In more recent years, the City has experienced an increase in urban development and a diversification of the local economy with tourism as a growing element of the economy.

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8 SCOPE & OBJECTIVES OF STUDY
The scope of this Study is to prepare multi-year financial plans for the water and wastewater enterprises, review and update the water and wastewater rate structures, propose 5-year rate schedules, and recommend financial strategies for addressing water shortage events.

The primary objectives of this Study are to:
i. Develop multi-year water and wastewater financial plans that integrate operational and capital project funding needs with a funding strategy. ii. Identify future annual adjustments to water and wastewater rates to help ensure adequate revenues to meet each utility’s ongoing financial obligations. iii. Update the cost of providing water and wastewater services using industryaccepted methodologies. iv. Recommend specific updates to the City’s existing rate structures in order to ensure that the City is equitably recovering the cost of service and comporting with industry standards1 and California’s legal requirements. v. Recommend water shortage financial strategy, including Water Shortage Surcharges to be overlaid on then-current water usage rates during water shortage events, as declared by the City.

STUDY METHODOLOGY
This Study applied methodologies that are aligned with industry standard practices for rate setting as laid out in the AWWA M1 Manual, and applicable law, including California Constitution Article XIII D, Section 6(b), commonly known as Proposition 218.
1 As promulgated the American Water Work Association (AWWA) M1 Manual: Principles of Water Rates, Fees and Charges: Manual of Water Supply Practices M1, (7 th edition), which documents many of the
standards used by professionals in the utility rate-setting industry.

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

Revenue requirements calculated for fiscal year ending June 2023 (FY 2022/23 2 ) were
then used to perform a detailed cost-of-service (COS) analysis. The COS analysis and rate structure design were conducted based upon principles outlined by the AWWA, legal requirements (i.e., Proposition 218) and other generally accepted industry practices to develop rates that reflect the cost of providing service.

PROCESS
Over the course of numerous meetings, Hildebrand Consulting collaborated with City Staff to develop the recommendations in this Study. The project team also met with City Council to review the proposed financial plans and proposed updates to the rate structures. The Study was first developed and presented to City Council in early 2021 but no action was proposed. The Study was then updated in 2022 and presentations were made to the Healdsburg City Council on March 21st and April 18th, 2022, in advance of the Public Hearing which is scheduled to take place June 21st, 2022.

The rate setting process was further guided by three primary considerations:
2 Fiscal years are sometimes indicated by their ending years. For example, FY 2022/23, starts on July 1, 2022 and ends on June 30, 2023, can also be expressed as FY 2023.

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10 Legal Requirements – California Constitution and relevant case law requires that water rates not exceed the cost of providing service and rates must reflect the proportionate share of costs attributable to each parcel.

Rate Setting Objectives – The following objectives guided the financial plan and rate structure updates:
• Financial sufficiency and sustainability – Water and wastewater rates should generate sufficient revenues to meet each utility’s service and financial obligations including covering operating and maintenance costs, meeting debt service obligations, and rehabilitating and upgrading the respective systems to provide high quality utility services to customers.
• Legal compliance - Utility rates should meet legal requirements to not exceed the cost of service and proportionately allocate costs to customers. • Fiduciary Responsibility – The City seeks to minimize rate increases and avoid debt when possible.
• Rate Structure - Utility rates should strike an appropriate balance between fixed and usage-based charges, with consideration of:
o Revenue stability
o Cost-based affordability for basic usage
o Customer bill impacts of rate structure changes
o Simplicity

REPORT ORGANIZATION
This report contains two major sections: Section 2 is the water rate study and Section 3 is the wastewater rate study. By design there is considerable redundancy in the language between these Sections 2 and Section 3; they are meant to stand-alone so as to avoid the need to cross-reference between them.

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11 WATER RATE STUDY
The following subsections include the Water Utility’s financial plan, cost of service, rate design, proposed rates schedule, and water shortage strategy (including rate surcharges). This section also contains an update to the special charges for the Passalacqua development.

WATER UTILITY FINANCIAL PLAN
This section presents the Water Utility’s 10-year Financial Plan, including a description of the source data, assumptions, and the City’s financial policies. The City provided historical and budgeted financial information, including historical and budgeted operating costs, a multi-year capital improvement program (CIP), and outstanding debt service obligations. City staff also assisted in providing other assumptions and policies, such as reserve targets and escalation rates for operating costs (all of which are described in the following subsections).

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

The analysis identifies a revenue shortfall in upcoming years as a result of an increase in capital spending and expense inflation, which leads to a conclusion that rate revenue adjustments are required for the Water Utility. The schedules attached to this report include detailed data supporting the Water Utility Financial Plan discussed herein.

The Water Utility Financial Plan reflects assumptions and estimates believed reasonable at the present time. However, conditions change. It is recommended that the City review the financial condition of the Water Utility and reaffirm annual rate adjustments

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12 as part of the annual budget process, as well as perform a more comprehensive financial plan and water rate update every 5 years or as conditions dictate.

WATER UTILITY BEGINNING FUND BALANCES
The ending cash balance for FY 2020/21 was used to establish the FY 2021/22 beginning balance, as outlined in Table 1. It should be noted that the amount of cash that the Water Utility keeps in reserves is a product of its reserve policies (see Section 2.10).

CUSTOMER GROWTH
In recent years, the City has collected an average of approximately $176 thousand per year in Development Capacity Charges3revenue from new customers connecting to the system, which equates to a growth rate of approximately 0.59% per year. This Study assumes that this growth trend, and the associated Development Capacity Charges revenue, will continue for the duration of the next 10 years.

WATER UTILITY RATE REVENUE
Rate revenue is the revenue generated from customers for water service. The City collects rate revenue from water customers based on a fixed “Service Charge” (assessed 3 Development Capacity Charges are one-time charges to new development to pay for capacity in the utility systems.

Fund 520 (Water Operations) $2,196,000
Fund 522 (Water Capital Reserve) $979,000
Total Unrestricted: $3,175,000
Fund 920 (Restricted Water Capacity Charges) $1,400,000 Total Reserves: $4,575,000

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13 based on dwelling units or meter sizes) and a water “Usage Rate” (applied to each hundred cubic feet4(“HCF”) of water use). Customers receive a monthly bill.

The Water Utility Financial Plan projects that FY 2021/22 rate revenue will be approximately $1.0 million less than the budgeted $6.237 million due to significant reductions in water usage during calendar year 2021 (encouraged largely by City programs). FY 2022/23 water usage is projected to be greater than FY 2020/21 levels, but still 10 percent less than FY 2020/21 water usage (which is characterized as a “normal” year of water usage for purposes of this Study). Per capita water demand is projected to further recover by another 5 percent in FY 2023/24 while water demand driven by customer growth is projected to continue as described in Section 2.3. Budgeted and projected rate revenues (including proposed rate adjustments) are listed in the first table in Schedule W-3.

WATER UTILITY NON-RATE REVENUES
In addition to rate revenue, the City receives additional “non-rate revenue” from sources such as miscellaneous service fees (operating revenue), Development Capacity Charges, grants, and interest revenue on investments. Projections of all non-rate revenues were based on FY 2021/22 budgeted revenues with the exception of interest income which was calculated annually based upon projected fund balances and assumed interest rate of 2.01%, which is consistent with the City’s historical interest earnings relative to its total reserve levels. Budgeted water rate and non-rate revenues are depicted in Figure 2 below and listed in detail in the first table in Schedule W-3. 4 One HCF is equal to 748 gallons

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14 WATER UTILITY OPERATING AND DEBT EXPENSES
The Water Utility’s expenses include operating and maintenance expenses, debt service, and capital spending. Capital spending is addressed separately in Section 2.9. Future operating and maintenance expenses were projected based upon the budgeted expenditures from FY 2021/22 and adjusted for inflation (see Section 2.8).

Major budgeted expense categories for FY 2020/21 are depicted in Figure 3. Budgeted and projected operating and maintenance costs as well as debt service expenses are listed in detail in Schedule W-1.

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15 Figure 3: Water Utility Operating & Debt Expenses (FY 2021/22) The water utility currently pays about $1,057,000 annually on debt service related to a CSCDA 2005D Refunding of 2000B Revenue Bonds (water portion of annual payments of approximately $205,000 and will be retired in FY 2030/31), a 2014 Water Revenue Refunding Bond (annual payments of approximately $740,000 and will be retired in FY 2032/33), and a 2012 Taxable Pension Obligation Bond (annual payments of approximately $112,000 and will be retired in FY 2022/23).

While a general increase in capital spending is forecasted, this Water Utility Financial Plan does not propose any new debt issues during the planning period (see Section 2.9).

DEBT SERVICE COVERAGE
One of the requirements associated with bond financing is to maintain rates and other water system revenues at levels sufficient to meet debt service coverage requirements.

At present, the City is required to maintain water system revenues at a level that covers

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16 all ongoing operating and maintenance costs, as well as 1.20 times annual debt service.

Based on recently published guidance from Fitch Ratings5, utility systems with midrange financial profiles should maintain a debt coverage ratio (DCR) greater than 1.50 times annual debt service. The Water Utility currently has a DCR of approximately 1.6 (see Schedule W-3, Row 29) and, with the proposed rate adjustments, is expected to maintain a healthy DCR through-out the planning period. Having a high DCR value does not indicate excessive revenue but is rather an indication that the Water Utility is not overly-reliant on debt.

COST ESCALATION
Annual cost escalation factors for the various types of expenses were developed based upon a review of historical inflation trends, published inflation forecasts, industry experience, and discussions with City staff. During the projection period, all expenses are projected to increase at 4.0 percent per year through FY 2023/24 and 3.0 percent thereafter.

WATER UTILITY CAPITAL IMPROVEMENT PROGRAM
Figure 4 shows that from FY 2016/17 to FY 2019/20 the City invested modestly in capital projects to rehabilitate or improve the water system. More recently the City has increased its annual capital spending in order to pro-actively address the water system’s rehabilitation needs associated with aging wells, treatment facilities, pipes, pump stations, water tanks, and other system facilities. The proposed capital expenditures from FY 2022/23 through FY 2024/25 is significantly lower than first planned by the City’s engineering department. The capital expenditures were reduced as part of this Study to include only critical projects in order to avoid a spike in nearterm water rates. A detailed list of the planned capital projects through FY 2024/25, as well as a list of some deferred projects, is provided in Schedule W-2. The actual projects 5 As published on July 31, 2013.

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17 that are built during those years may change based on system priorities. A certain number of projects from the City’s original capital program will need to be deferred which will create a backlog of capital spending needs. In order to address the backlog of capital projects, the capital spending levels beyond FY 2026/27 is assumed to be $2.16 million (in 2022 dollars).

This financial plan is proposing that all capital spending be funded on a “pay as you go” (PayGo) basis as opposed to using a debt strategy. This decision is based on the fact that debt is typically used to address anomalous spikes in capital spending. There is not sufficient time to issue debt for the immediate spike in capital spending, and the longterm increase in capital spending isn’t a “spike” in spending but rather a sustained increase to a “new normal” level of annual re-investment in the water system’s aging infrastructure.

Figure 4: Water Utility Historic and projected capital spending

WATER UTILITY FUNDS
The financial plan model is based on the fund, reserve, and account structures currently used by the City. These structures include recent modifications to improve efficient

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18 funding of the capital improvement program. Figure 5 is a schematic diagram of the funds/reserves and major cash flows associated with the financial plan model.

The fund / reserve structure is comprised of:

Operating Fund – The Water Operating Fund (Fund 520) is the primary fund within the Water Utility. Most revenue, including rate revenues, flow into the Operating Fund and all operating and maintenance costs, including debt service payments, are paid out of this fund. Funds are also transferred from the Operating Fund to the Capital Replacement Reserve to provide funds for capital projects intended to rehabilitate and upgrade facilities. While not necessarily a roadmap for future City decisions on transfers, this financial plan shows annual transfers from the Operating Fund to the Capital Replacement Reserve sufficient to meet the capital improvement for each year in the planning period.

Capital Replacement Fund – The Capital Replacement Fund (Fund 522) is intended to serve as a mechanism for funding rehabilitation, replacement, and upgrade projects contained in the capital improvement program. The reserve is funded with annual transfers of rate revenue from the Operating Fund (see the second table in Schedule W7.A.a Packet Pg. 242 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
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19 3). Funds are then used for capital project expenditures. By establishing regular transfers from the Operating Fund, the City is able to fund capital projects in a manner that facilitates rate stability and/or modest annual rate adjustments. This reserve also helps to establish and maintain steady funding of the ongoing replacement and rehabilitation efforts of the utility system, which many utilities neglect as part of the financial obligations of long-term sustainability of service.

Water Capacity Fund – The Water Capacity Fund (Fund 920) is used to account for revenues from water system Development Capacity Charges. The City’s Development Capacity Charges are based on a system buy-in methodology. As such, capacity fee revenues reimburse the utilities for prior investment in water system capacity including debt service payments in order to help the City meet its DCR obligations. The financial plan model use available Development Capacity Charge revenues to help pay for capacity-related, planned capital improvement projects but does not foresee the need to supplement debt service payments.

CASH RESERVE POLICIES
Cash reserve policies are cash balances targets that are retained for specific cash flow needs. The target for reserves is an important component when developing a multiyear Water Utility Financial Plan and maintaining prudent reserves is an essential component of any sound financial management strategy. Utilities rely on reserves for financial stability; credit rating agencies evaluate utilities in part on their adherence to formally adopted reserve targets; and lending agencies require utilities to maintain specific debt reserves for outstanding loans. The target levels of the policies below are consistent with: 1) the City’s established policies and practices; 2) the findings of reserve studies conducted by the AWWA; 3) a healthy level of reserves for a utility per the evaluation criteria published by rating agencies (e.g., Fitch, Moody’s, and Standard & Poor’s); and, 4) Hildebrand Consulting and The Reed Group’s industry experience for similar systems.

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20 The following recommended reserve policies are based on the policies that were recommended in the 2016 rate study with some minor modifications. The policy recommendations are intended to help the City mitigate and manage financial risk while meeting service and financial obligations.

Contingency Reserve – The City currently has a policy goal (Resolution No. 139-2000) to maintain Contingency Reserves within the Operating Fund equal to 25 percent of annual rate revenue (or about $1.56 million). The purpose of the Contingency Reserve is to provide working capital and funds for unplanned operating and maintenance expenditures or revenue shortfalls resulting from reduced water sales. The balance in the Operating Fund is currently meeting the target Contingency Reserve.

Debt Service Reserve (restricted) – The Water utility also includes a Debt Service Reserve within the Water Operating Fund. The Debt Service Reserve is a restricted reserve required by some debt agreements as security against debt repayment obligations and is not available for general operating purposes. The Water Utility’s only outstanding debt that requires a debt service reserve is the CSCDA 2005D bond (for a reserve level of about $205,000).

Capital Replacement Reserve – A capital replacement reserve serves the dual purpose of (1) supporting the City’s PayGo strategy by absorbing some of the inherent fluctuations in annual capital spending and (2) serves as safety net in the event of the catastrophic failure of a major system asset (such as a pump station or a major water main). While the City does not currently maintain a targeted reserve in the Capital Replacement Fund, this financial plan proposes to establish the practice of working towards a target balance of $1.0 million during the planning period. In the future the City may wish to formalize the practice with a more detailed analysis of the appropriate target levels.

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21 requirements and determine the level of rate revenue increases necessary in each year of the projection period.

Based upon the previously discussed financial data, assumptions, policies, and PayGo strategy, this Study proposes a 5-year schedule of annual rate adjustments as shown in Table 2.

It is important to note that water rates in the first year (FY 2022/23) will be modified based on the findings of the cost-of-service analysis (see Section 2.13), meaning that the percent change to individual customer bills may differ significantly from the percent change in rate revenue received by the City. This dynamic is principally driven by the recent reduction in water usage by customers, which requires rates to be increased to compensate.

The numbers provided in the first table in Schedule W-3 (cash flow proforma for the operating fund) are summarized graphically in Figure 6, which shows the Operating Fund target reserves and DCR target levels being met at all times.

Rate Adjustment Date
July 1, 2022
July 1, 2023
July 1, 2024
July 1, 2025
July 1, 2026 5.0%
Proposed Rate
Revenue Increase

2.0%

8.0%

5.0%

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22 Schedule W-3 shows the cash flow with each of the Water Utility’s fund and the projected transfers between the Operating Fund, the Capital Replacement Fund and the Capacity Fund.

The forecasted rate increases after FY 2026/27 in Figure 6 are estimates based on longterm projections. The City will need to renew the rate analysis for those years once the time period comes closer.

WATER COST OF SERVICE & RATE STRUCTURE
The cost-of-service (COS) analysis evaluates the cost of providing water and allocates those costs to rate structure components to ensure the proposed rates are aligned with the costs to provide service. The COS analysis is performed in order to comply with Proposition 218, which requires water rates to be equitably apportioned and proportional to the cost of providing water service.

Proposed Revenue Increases: 2.0% 8.0% 8.0% 5.0% 5.0% 2.0% 2.0% 2.0% 2.0% 0.0% Debt Coverage Ratio: 1.60 1.53 2.37 3.64 3.98 5.41 6.73 6.84 6.99 7.06 11.22 $0
$1
$2
$3
$4
$5 MILLIONS
Combined Fund Balance (ending)
Target Reserve Level Minimum Reserve Levels
$0
$2
$4
$6
$8
$10
$12
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Total Revenue / Expenses ($M) Non-Rate Revenue Existing Rate Revenue
Additional Rate Revenue Operating Expenses
Debt Service Rate Funded Capital Spending (cash) Expense Revenues

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23 Upon completion of the COS analysis, a rate structure analysis was performed to evaluate rate structure modifications and calculate specific rate schedules for implementation in FY 2022/23. The complete schedule of proposed rates for FY 2022/23 through FY 2026/27 is detailed in Schedule W-4.

The rate structure proposed by this Study is designed to:
 Fairly and equitably recover costs through rates
 Conform to accepted industry practice and legal requirements  Provide fiscal stability and recovery of water system costs  Meet other rate setting objectives, as described in Section 1.4 This Study employed a COS methodology that is consistent with the “commoditydemand” COSA methodology promulgated in AWWA’s Manual M1: Principles of Water Rates, Fees, and Charges (M1). This is a well-established methodology as recognized by the AWWA and other accepted industry standards.

2.13.1 Current Water Rates
The structure for the City’s current water rates follow a common industry practice with a two-part structure that is comprised of a fixed Service Charge and consumption-based Usage Charge. The Service Charge is scaled for residential accounts based on the number of dwelling units (DU) and for non-residential accounts based on the size of the meter. The current Service Charge schedule (which is assessed monthly) is summarized in Table 3.

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24 The Usage Charge is assessed based on actual water usage (measured in hundreds of cubic feet or “HCF,” which is equal to 748 gallons). The Usage Charge is a flat (or “uniform”) rate as shown in Table 3.
• Riverview Homeowners Association (HOA) - As an exception to the standard rates, the City has an agreement with the Riverview HOA based on an Order of Condemnation (1997). The agreement gives the City a land easement to access water supply wells while providing the Riverview HOA with treated water at a rate (at the time) of $0.33 per HCF, which can only be increased by general rate revenue increases imposed by the City (in this case, 2 percent in FY 2022/23). The current water usage rate for Riverview HOA is $1.44 per HCF. • Hydrant Water Sales – The City provides water through fire hydrants for construction, dust control, or other purposes. The current rate is $11.02 / HCF. It is recommended that the City continue to maintain a rate for hydrant water sales equal to two times the uniform water rate for water service. This would be a rate of $12.00 / HCF for FY 2022/23. Deposits and connection fees may also apply, as determined by the City. The higher rate is intended to reflect the extra administrative cost associated with this type of service.

Water Usage Rates ($/HCF)
All Potable Water Use $5.51
Riverview HOA (non-potable) $1.44
Hydrant Water Sales $11.02
Fixed Monthly Service Charges
Single Family $23.19
Single Family + ADU (per DU) $23.19
Multi-Family (per DU) $16.13
Non-Residential
Up to 1" Meter $37.09
1 1/2" Meter $71.54
2" Meter $113.07
3" Meter $210.02
4" Meter $348.47
10" Meter $1,593.91
Water Usage Rates ($/HCF)
All Potable Water Use $5.51
Riverview HOA (non-potable) $1.44
Hydrant Water Sales $11.02
Fixed Monthly Service Charges
Single Family $23.19
Single Family + ADU (per DU) $23.19
Multi-Family (per DU) $16.13
Non-Residential
Up to 1" Meter $37.09
1 1/2" Meter $71.54
2" Meter $113.07
3" Meter $210.02
4" Meter $348.47
10" Meter $1,593.91

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Packet Pg. 248 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Rate Study
25 • County Service Area (CSA) 41 - The City also has a 1992 agreement with Sonoma County (CSA 41, previously CSA 24) which obliges the City "To sell COUNTY water at a mutually agreed rate for other utilities. Such rate may be adjusted from time to time in a nondiscriminatory manner. Rates shall be based upon a periodic proportion division of costs isolating such activities not provided to the County, including but not limited to storage, local distribution, and service maintenance including associated depreciation and debt service." City staff is currently working to update the water rates applicable to CSA 41, and these rates were not addressed by this report.

2.13.2 Customer Statistics
Water rate calculations are based on a number of factors related to the City’s customer base. Factors include the number of customers, customer classes, meter size, and actual water usage. In FY 2020/21 the City provided water service through 4,556 water service connections (customer accounts). Single-family customers comprise about 83 percent of the customer accounts and about 59 percent of annual water usage. Multifamily customer accounts make up about 2 percent of the customer accounts and 7 percent of annual water usage. Commercial customer accounts make up about 11 percent of the customers and 19 percent of annual water usage. Irrigation customer accounts make up about 4 percent of the customers and about 14 percent of the water usage.

While there are extremes on both the low and high ends, average monthly single-family water usage is about 10 HCF (about 251 gallons per day). Water usage for condominium units and multi-family dwellings is lower than for single-family residences for a variety of reasons including fewer people per household and limited landscape irrigation (or irrigation that is separately metered). Non-residential water usage can vary dramatically, and non-residential customers are served by meters of varying sizes to accommodate the differences in water demands.

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26 2.13.3 Meter Equivalencies
Service connections with different meter sizes can place different demands on the water system. For example, much more water can be delivered through a 4” water meter than through a 1” meter. The current rate structure is based on hydraulic capacity factors which relate to the potential demands on the water system from customers with different sized water meters. These factors are used to determine the number of equivalent meters represented by the total customer base with variable meter sizes.

Table 4 presents the rated flow capacity of various meter sizes and how these are used to develop hydraulic capacity factors. For purposes of rate analysis, a 1” meter is assigned a hydraulic capacity factor of 1.0. The ratios of rated flow capacities of the various meter sizes compared to the capacity of a ¾” meter are used to determine the capacity factors for other meter sizes. This capacity relationship across meter sizes is used to allocate capacity-related fixed costs to various customers. This is also a common rate-setting practice used in the water industry.

The same concept is used for allocating costs among residential accounts. The water demands of single-family residential accounts are established as the baseline with hydraulic capacity factor of 1.0, which makes each single family home dwelling unit equivalent to a ¾” meter. The hydraulic capacity factor for a multifamily dwelling unit (DU) is inferred based on the City’s historical water usage data which shows that the average multifamily dwelling unit uses about 54% as much water as the average single family dwelling unit. As such, the hydraulic capacity factor for a multifamily DU is set at

0.536 (see Table 4). Similarly, the hydraulic capacity factor for single-family accounts with accessory dwelling units (ADUs) was measured to be 0.729 per DU.

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Packet Pg. 250 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Rate Study
27 Table 5 summarizes customer account and water usage data used in water rate calculations for FY 2022/23. Account information is based on the utility billing data from FY 2019/20; however water usage was reduced by 10% to account for recent water usage trends.

Meter Size
Rate Flow
Capacity (gpm)1
Hydraulic
Capacity Factor
Single Family 30.0 1.00
Single Family with ADU (per DU) (na) 0.729
Multi-family (per DU) (na) 0.536
1" 50 1.667
1 1/2" 100 3.333
2" 160 5.333
3" 300 10.00
4" 500 16.667
6" 1350 45.00
8" 1800 60.00
10" 2400 80.00
12" 3375 112.50
1 AWWA M1 Manual 7th Edition, Table B-2
Non-Residential Meter Size Total Annual Water
1" 1.5" 2" 3" 4" Accounts Use (HCF)
Single Family Residential 3,794 3,794 394,000
Single Family with ADU 280 140 21,200
Multi-Family Residential 938 87 52,200
Non-Residential 368 33 77 10 5 493 139,500
Irrigation 109 30 44 3 3 189 96,900
Riverview HOA 4 4 8,500
Totals: 5,012 477 63 125 13 8 4,707 712,300
No. of 1" Equiv. Meters: 4,501 795 210 667 130 133 6,436 Operating Capacity (gpm) 1: 30 50 100 160 300 500
Hydraulic Capacity Factor: 1.0 21.67 3.33 5.33 10.00 16.67 1 Source: C701-12 Singlejet Type for meters 1" to 4" and C704-15 Propeller Type for meters 6" and larger, M1, Table B-2, Seventh Edition 2 All single family homes are given a factor of 1.0 while multifamily DU are assigned a value of 0.54 based on the relationship of average single family demand to multi-family demand per DU. Single family accounts with ADUs are given a factor of 0.73 per dwelling unit.

Residential
Dwelling
Units

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28 2.13.4 Water Rate Calculations
There were two primary steps in calculating the proposed water rates. These are:
▪ Determine annual water rate revenue requirements
▪ Analyze the cost of providing service and proportionately allocate costs to be recovered from customers either through the Service Charge or the Usage Charge.

2.13.4.1 WATER RATE REVENUE REQUIREMENTS
The ten-year Water Utility Financial Plan was used to identify the water rate revenue required to meet financial obligations for each fiscal year of the planning period. The water rate calculations presented herein are based on the revenue to be generated in FY 2023 and reflects the proposed 2 percent overall rate revenue increase to be incorporated in the Water Utility’s Financial Plan.

2.13.4.2 WATER COST-OF-SERVICE ANALYSIS
Once the annual water rate revenue requirement was determined using the financial planning model, the next step in the rate-setting process was to allocate costs to be recovered through the various rate elements. Water rate calculations contained herein are intended to generate water rate revenue equal to the revenue requirement from the water customers. The manner in which each customer is responsible for the water utility’s costs is the determining factor in the cost-of-service analysis.

The cost allocation approach presented by this Study is consistent with the methodology that was used in the 2016 rate study. Used herein the methodology is commensurate with the available data and the requirement to fairly and reasonably reflect the cost difference to provide services to different types of customers.

The cost allocation methodology begins by assigning all costs to one of three revenue recovery categories (see Table 6). The cost allocation process is performed with data available in the City’s detailed budget and other documents. The three revenue recovery categories include:

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Packet Pg. 252 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Rate Study
29 • Customer charges are a fixed revenue that are used to recover fixed costs such as meter reading and billing that tend to vary as a function of the number of customers being served. Customer charges are assessed to each customer account equally (regardless of size). Table 6 shows that a portion of employee salaries and general administration costs are designated to be recovered through this charge.
• Meter charges are also a fixed revenue and are used to recover some of the fixed costs associated with the capacity of the water system and the ability to serve the demands of active customers. These fixed costs include some of the costs associated with the capital program, debt service, maintenance, and certain fixed operating costs (see Table 6).

The sizing of the water system is based on the potential demand that each customer could place on the water system. Customers that have the potential to place a greater burden on the capacity of the water system (based on the size of their meter or number of dwelling units) should bear a greater share of these costs.

Meter sizes and number of dwelling units reflect the potential demand that customers could place on the water system at any given time and are general indicators of each customer’s capacity requirement. A customer with a large meter size (or numerous dwelling units) will be assigned a larger share of fixed capacity-related costs compared to a customer with a smaller meter (or fewer dwelling units) based on the ratios summarized in Table 4. • Usage charges are intended to recover all variable costs that vary in response to the amount of actual water use and some fixed costs that are reasonably allocated on the basis of water use. Utilities and fuel is an example of variable costs that are recovered through the usage charges (see Table 6). Even though some of the costs that are allocated to the usage category are fixed, rather than variable, the costs are tied to the utility’s long-term water demands. As such, it is reasonable to allocate a portion of fixed costs to customers on the basis of usage, rather than the capacity relationship expressed by meter size and hydraulic.

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Packet Pg. 253 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Rate Study
30 Table 6 summarizes how the FY 2023 revenue requirement of $6,253,000 is comprised of operating and maintenance costs, debt service obligations, and cash-funded capital spending (as derived from the FY 2021/22 operating budget, current debt repayment schedules, and the 10-year capital spending budget, respectively), along with (offsetting) budgeted non-rate revenues and the application of available reserves. It also illustrates how the budget categories that make up the revenue requirement are each assigned to one or more of the three (previously described) revenue recovery categories. The variable costs are assigned entirely to the usage charge category, while variable costs are generally recovered 30:70 from the meter charge and usage charge, respectively (with some exceptions). These are reasonable allocations to the different revenue recovery categories and ensure that water ratepayers will pay for the cost of service, both through their fixed charges and their usage charges.

Row 12 represents the use of reserves (treated as a source of funds and therefore a credit in this table) and the allocation percentages are calculated based on the indirect allocation method (the overall allocation of costs from Row 1 through Row 8).

Once all costs have been allocated, the total for each revenue recovery category is divided by the respective number of service units to arrive at a unit cost for each charge.

For example, the costs to be recovered through the customer charges are divided by the total number of dwelling units / non-residential accounts. As shown in Table 6, those costs amount to $190,000, which are divided by the 4,708 accounts, for a unit cost of $3.36 per account. Similarly, the total cost allocated to the meter charge category is divided by the total equivalent meters in the system (6,436). The total cost allocated to the usage charge category is divided by the estimated annual units of water sales (712,300 HCF).

The allocations result in 3.0 percent of costs assigned to the customer charge component, 28.6 percent to the meter charge component, and 68.4 percent to the usage charge component. These percentages are similar but not identical to those developed in the 2016 water rate study. Changes to the results are a natural by-product of changes to the Water Utility’s cost profile (such as the increase in capital spending).

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31 2.13.5 Service Charges
Service Charges are a combination of the customer charge and meter charge identified through the cost-of-service analysis. Service Charges apply to all customer water bills, regardless of the amount of water actually used. Customers with active accounts that use no water during a month should still be required to pay the service charge, as service is immediately available to them. In calculating Service Charges, customer charges are assessed equally to all customers and meter charges are allocated based on dwelling units or meter size in relation to the hydraulic capacity associated with the various account types and meter sizes.

The proposed monthly Service Charge in FY 2023 for a single-family dwelling unit is $26.49, as shown in Table 7. This value was calculated by adding the monthly customer charge of $3.36 to the monthly meter charge of $23.13 (also found at the bottom of Table 6).

Test Year
Budget Expense Budget Customer Meter Usage Customer Meter Usage Operating Expenses
1 Salaries and Benefits $2,626,000 5% 30% 65% $131,300 $787,800 $1,706,900 2 Utilities & Fuel $291,000 100% $291,000
3 Professional Services $383,000 30% 70% $114,900 $268,100 4 Maintenance & Operations $820,000 30% 70% $246,000 $574,000 5 General Administration $718,000 15% 15% 70% $107,700 $107,700 $502,600 6 Conservation $31,000 100% $31,000
Capital
7 Existing Debt $1,063,000 30% 70% $318,900 $744,100
8 Cash Capital $2,230,000 30% 70% $669,000 $1,561,000
Credits & Other
9 Non Rate Revenue & Credits ($245,000) 100.0% ($245,000) 10 Use of Reserves ($1,664,000) 2.9% 27.5% 69.6% ($49,000) ($458,000) ($1,158,000) 11 Rate Revenue Requirement: $6,253,000 Totals: $190,000 $1,786,300 $4,275,700 12 Units of Service: 4,707 6,436 712,300
Accounts Equivalent
Meters
HCF
13 Unit Rate: $3.36 $23.13 $6.00
per account per
month
per eq. meter
per month
per HCF
Revenue Recovery Categories

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Packet Pg. 255 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
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32 For larger meters, the meter charge portion of the Service Charge increases in proportion to the meter equivalency, while the customer charge remains the same for all meter sizes. The variation of Service Charges through meter sizes reflects the fact that a small portion of water system costs are directly related to the number of customers served. A majority of fixed costs are allocated on a capacity basis as reflected by the meter size. The changes to the Service Charges across the range of meter sizes more objectively reflect a consistent proportioning of the cost of providing service to customers of varying meter sizes.

2.13.6 Water Usage Rates
Under the proposed water rates for FY 2022/23, the uniform water rate would be $6.00 per HCF (see the bottom of Table 6).

2.13.7 Proposed Water Rate Schedules
Schedule W-4 summarizes the proposed water rate schedule for the next 5 years. The first rate increase will be effective on July 1, 2022. The proposed water rates are designed to generate the rate revenue requirements as identified by this Water Utility Financial Plan.

Account Type / Meter Size
Monthly Customer
Charge
Hydraulic
Capacity Factor
Monthly
Capacity Charge
Monthly Service
Charge
(A) (B) (A + B)
Single Family $3.36 1.0 $23.13 $26.49
Single Family with ADU (per DU) $3.36 0.73 $16.86 $20.22 Multi-family (per DU) $3.36 0.54 $12.39 $15.75
1" $3.36 1.67 $38.55 $41.91
1 1/2" $3.36 3.3 $77.10 $80.46
2" $3.36 5.3 $123.36 $126.72
3" $3.36 10.0 $231.30 $234.66
4" $3.36 16.7 $385.50 $388.86
6" $3.36 45.0 $1,040.85 $1,044.21
8" $3.36 60.0 $1,387.80 $1,391.16
10" $3.36 80.0 $1,850.40 $1,853.76
12" $3.36 112.5 $2,602.13 $2,605.49

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Packet Pg. 256 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 33 PASSALACQUA PUMP-STATION PUMPING SURCHARGE
A 2018 report by The Reed Group (“Passalacqua Pump-Station Pumping Surcharge”, December 14, 2018) calculated a surcharge to recover the Passalacqua PumpStation’s operation, maintenance, repair, and replacement costs, which applies to applicable water usage within the development. That surcharge is being updated with this Study.

The Saggio Hills Area Plan (Montage Resort and related residential development) encompasses 258.5 acres located east of Healdsburg Avenue just north of Parkland Farms. It provides for the development of a 130-unit resort hotel and associated amenities (e.g., spa, restaurant, wedding pavilion, etc.), 70 resort residences, a community park, public and private open space and trails, a pump station, and a City fire substation). As a requirement for development, a new water pump station (the Passalacqua Pump-Station) was built to provide water for normal use and fire flows.

The Passalacqua Pump Station Zone of Benefit encompasses of portion of the Saggio Hills Area Plan that includes the Montage Resort, the low-density residential area, and associated landscaping. Areas that are within the Saggio Hills Area Plan but are located below the Pump Station are not served by the pump therefore not subject to the Pumping Surcharge. These include the “Affordable Housing” area, the Fire Station, the Community Park, and certain landscaped areas.

The pump station is dedicated to the City’s water utility. Under the terms of the development agreement, the cost to operate and maintain these facilities is allocated to the water customers that will benefit from the facilities, as indicated in the agreement’s language below:
“Developer shall be aware of and agree to the development and establishment of a surcharge for the additional costs (including but not limited to cost of energy, fuel, labor and materials for maintenance and replacement of motor controls, pumping equipment, building maintenance, etc.) associated with the operation and maintenance (O&M) of a new water pumping station. The new pumping station is necessary, and only benefits the Saggio Hills development,

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Packet Pg. 257 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 34 in order to provide peak domestic flow, fire flow and landscape irrigation at acceptable pressures. The monthly surcharge will be billed to all future Saggio Hills Development water users as a component of the monthly water bill based on actual usage.”6
The cost of these facilities is allocated based on volume of water usage, as indicated in the agreement’s language below:
“Because the Pump Station will serve only the Resort and the Residences, the City requires that the costs and expenses that the City incurs in the ownership, operation, maintenance, repair and replacement of the Pump Station be paid by and allocated to the owners of the Resort and the Residences as part of a "Zone of Benefit" under the City's water billing policies and practices. The City therefore shall have the right to from time-to-time impose on each water bill for the Resort and each of the Residences a surcharge (based on a charge assessed against each cubic foot of water consumed, which charge shall be the same for the Resort and each of the Residences) sufficient to reimburse the City for such costs and expenses and to provide a reserve for replacement of the Pump Station and/or components thereof. The Developer shall disclose in writing to each purchaser of a Residence the intent and right of the City to impose such surcharge.”
7 The methodology for calculating the Pumping Surcharge follows the same methodology as the 2018 study but replaces the cost estimates from that study with actuals cost data that is now available. The methodology consists of the following steps:
6 From TM Conditions of Approval (Resolution 18-2011), C. "Public Works", Condition 4. 7 From the Development Agreement, Exhibit B, Section 16 "Infrastructure", subsection (f) "Pump Station.

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Packet Pg. 258 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 35 1) Calculate the annual operating and maintenance costs for the pump station, including labor hours and direct expenses (parts, services, electricity, etc.). 2) Calculate the annual depreciation expense of the pump station infrastructure based on actual construction costs and expected useful life of each component.
3) Estimate the total build-out water demands within the Zone of Benefit. 4) Estimate the trajectory of the growth in annual water demands that may occur as the Zone of Benefit develops towards build-out.
5) Establish a financial plan (cash flow model) based on projected water demands that calculates the annual unit rates (in dollars per hundred cubic feet (HCF)) that will be sufficient to meet each year’s revenue requirements of the pump station (including the building of a sinking fund for the repair and replacement of the facility).
6) Establish a Pumping Surcharge Schedule that defines the unit rate of the Pumping Surcharges based on varying levels of annual water demand. 7) Adopt a policy to adjust the Pumping Surcharge schedule based on annual inflation and to periodically update surcharge calculations based on actual costs, water demands, and experience.

2.14.1 Source Data
The following data was used for calculating the proposed surcharge:
• Water System Estimated Water Demand Saggio Hills, Carlile Macy, April 2007 (Carlile, 2007)
• Montage PS Surcharge and Meter Maintenance Charge update 2021 v1 (Microsoft Excel file), as updated by City staff
• Landscape Irrigation Calculations, Sheet No. LI-6.01-0, The Robert Green Company, July 28, 2017 (Green, 2017)
• Data provided by City staff regarding water usage projections through buildout.

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Packet Pg. 259 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 36 2.14.2 Calculations
This section introduces a series of tables which summarize the data and calculations that were used to calculate the Pumping Surcharge. The sequencing of the exhibits follows the steps in the methodology described in Section 2.14.

Table 8 summarizes the annual operating and maintenance costs for the pump station, including labor hours, direct expenses (parts, services, electricity, etc.), and depreciation expense. While the depreciation expense is not an actual cash expense, it represents the amount that should be set aside in a capital replacement sinking fund reserve for future repair and replacement costs. Most cost information came from updates provided by City staff based on actual costs and time spent on maintenance. The exhibit footnotes to Table 8 provide additional explanation. The estimated total annual operation, maintenance, and replacement expenses (in 2021 dollars) is $152,000.

Table 9 provides a summary of the estimated water demands within the Zone of Benefit. These numbers are taken from the 2018 report, which began with the demand estimates from the 2007 study (Carlile, 2007). There is insufficient actual flow data to provide a meaningful update to these estimates. Average flow rates expressed in gallons per day were converted to 100 cubic feet (HCF) per year. Adjustments were then made for the resort and associated uses (e.g., guest/employee uses and commercial uses) to account for the expected variations in the demands due to seasonality. In the interest of documentation, this exhibit shows the forecasted water demands for both “above” the Pump Station (i.e., the Zone of Benefit”) and “below” the Pump Station (not included in the Pumping Surcharge calculation). Total annual water usage above the pump station at buildout is estimated at 29,729 HCF.

Table 10 provides a 10-year cash flow projection based on estimated annual water demands, the total annual costs and resultant Pumping Surcharge rate ($/HCF). The exhibit shows the capital replacement sinking fund set aside as a “Transfer In” and demonstrates how the sinking fund will accumulate over the 10-year period with the

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Packet Pg. 260 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 37 purpose of periodically replacing components as they reach the end of their useful life (for example the Booster Pumps in Year 10).

Annual
Hours
Hourly
Rate2
Annual
O&M Cost1
Annual Operation & Maintenance Costs
Water Distribution Operator3 142 $115.00 $16,300
Landscape Maintenance Worker4 na na $7,200
Outside Labor (Generator Checks/Testing/Service) $2,200 Total Annual Labor Costs $25,700
Equipment O&M Part5 $14,300
Electrical Charges6
Customer Charges $1,000
Demand Charges $11,900
Usage Charges $4,000
Internet (SCADA)/Phone (Fire Alarm) $3,600
Total Annual Materials & Services $34,800
Total Annual Operation & Maintenance Costs $60,500
Estimated
Capital Costs7
Expected
Useful Life
Annual
Replac. Cost
Annual Replacement Costs
Site Hardscape $65,000 15 $4,300
Retaining Wall $124,000 30 $4,100
Buried Piping $72,000 50 $1,400
Building $185,000 50 $3,700
Roof $13,000 20 $700
Paint $24,000 10 $2,400
Pumps, High $229,000 15 $15,300
Pumps, Booster $149,000 10 $14,900
Above Ground Piping $322,000 50 $6,400
HVAC $52,000 25 $2,100
Controls8 $203,000 12 $8,500
Generator $193,000 15 $12,900
Electrical8 $607,000 25 $12,100
Wiring and Grounding $112,000 50 $2,200
Pumping Surcharge Update9 $2,500 5 $500
Total Annual Replacement Cost $91,500
Total Annual O&M and Replacement Costs $152,000
9 Pumping surcharge updated every 5 years at $2,500 per update in conjunction with general water rate study. 4 Includes pump station landscape maintenance, based on actual costs from FY 2019/20 5 Annual O&M parts based on 1 percent of cost of pumps, HVAC, controls, generator, and electrical equipment. 7 Based on actual capital costs
8 Only 50% of controls/electrical costs are included in the depreciation expense calculation because equipment will be re-used. 6 Demand charge based on monthly exercise of high lift pumps. Usage charge based on 42 gallons per minute at 320 feet of lift. 1 Cost information source: Updated by City staff in January 2021 3 Operator hours based on actual hours from FY 2019/20 as provided by City staff 2 Hourly rates taken from the City's Master Fee Schedule effective July 1, 2020 & include salaries, benefits, and overhead costs.

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Packet Pg. 261 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 38 Total Potential
Demand
(gpd) 1
Total Potential
Demand
(HCF/Yr) 1
Total Expected
Demand
(HCF/Yr) 2
"Above" Pump Station
Low-Desnity Residential 28,400 13,858 13,858
Resort
Guest & Employee Use 20,500 10,003 6,502
Commercial Use
Entry Building 7,700 3,757 2,442
Spa Building 8,300 4,050 2,633
Conference Center 1,500 732 476
Function Areas & Pool 900 439 285
Landscape Use3 45,800 22,349 3,533
Vineyard Irrigation Use4 2,500 1,220 n/a
Total "Above" Pump Station 115,600 56,409 29,729
1 Data source: Carlile, 2007.
% Capacity
Summer 90%
Fall 75%
Winter 35%
Spring 60%
Annual Average 65%
Gals. Per Year HCF Per Year
Sub-Meter A / Controller A 610,889 817
Sub-Meter B / Controller B 878,269 1,174
Sub-Meter C / Controller C 758,394 1,014
Sub-Meter D / Controller D 394,913 528
Sub-Meter E / Controller E n/a n/a Recycled Water 4
Sub-Meter F / Controller F n/a n/a Vineyard / GW 4
2,642,465 3,533
3 From Sub-Meters A - D, as follows: Source: Green, 2017 4 Areas to be irrigated with recycled water or groundwater (GW) have been excluded from annual water demand calculations for pumping surcharge purposes.
2 Annual demand totals for resort elements reflects seasonal capacity (occupancy/utilization) estimates from water demand study, as shown below.

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Packet Pg. 262 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 39 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Estimated Water Demands (HCF) 15,871 21,414 22,454 23,493 24,532 25,572 26,611 27,651 28,690 29,729 Hypothetical Pumping Surcharge ($/HCF) 1 $9.20 $7.52 $6.49 $6.14 $6.14 $5.80 $5.80 $5.45 $5.45 $5.11 Pumping Surcharge Revenue 2 $145,981 $161,131 $145,718 $144,359 $150,746 $148,312 $154,341 $150,832 $156,501 $151,917 Annual Pump Station Costs 3, 4
Labor Costs $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (25,700) $ (30,800) $ (30,800) $ (30,800) $ (30,800) $ (30,800) $ (30,800) $ (30,800) $ (30,800) $ (30,800) $ (30,800) Electrical Usage $ (2,135) $ (2,881) $ (3,021) $ (3,161) $ (3,301) $ (3,441) $ (3,580) $ (3,720) $ (3,860) $ (4,000) Replacement Cost (to Sinking Fund) $ (91,500) $ (91,500) $ (91,500) $ (91,500) $ (91,500) $ (91,500) $ (91,500) $ (91,500) $ (91,500) $ (91,500) Total Annual Costs $ (150,135) $ (150,881) $ (151,021) $ (151,161) $ (151,301) $ (151,441) $ (151,580) $ (151,720) $ (151,860) $ (152,000) Annual Surplus/(Deficit) 5 $ (4,154) $ 10,250 $ (5,304) $ (6,802) $ (555) $ (3,128) $ 2,760 $ (889) $ 4,641 $ (83) Cumulative Surplus/(Deficit) $ (4,154) $ 6,096 $ 792 $ (6,009) $ (6,564) $ (9,692) $ (6,932) $ (7,821) $ (3,179) $ (3,263) Pump Station Sinking Fund 6
Beginning Balance $ - $ 91,500 $ 180,500 $ 272,000 $ 363,500 $ 455,000 $ 546,500 $ 635,500 $ 727,000 $ 818,500 Transfer In $ 91,500 $ 91,500 $ 91,500 $ 91,500 $ 91,500 $ 91,500 $ 91,500 $ 91,500 $ 91,500 $ 91,500 New Paint 7 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (24,000) Replace Booster Pumps 7 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ (149,000) Pumping Surcharge Update 7 $ - $ (2,500) $ - $ - $ - $ - $ (2,500) $ - $ - $ - Ending Balance $ 91,500 $ 180,500 $ 272,000 $ 363,500 $ 455,000 $ 546,500 $ 635,500 $ 727,000 $ 818,500 $ 737,000 2 Calculated based on estimated annual water demand times pumping surcharge. 3 Electrical usage costs vary with annual water demand. All other costs assumed to be fixed. 4 All costs presented in current dollars. 5
Schedule of pumping surcharges adjusted to minimize annual surplus/(deficit). 6 Pump station sinking fund should be established to help ensure funds are available for scheduled replacements. 7 Pumping surcharge updates, new paint, and replacement of booster pumps are the first replacement items based on estimated useful live of pump station components. 1 Actual Pumping Surcharge for any given year will be based on the actual water demands from the previous year.

Materals & Services
(Excluding Electrical Usage)

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Packet Pg. 263 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 40 Table 11 provides the proposed Passalacqua Pump-Station Pumping Surcharge schedule given a range of annual water demands. As development proceeds and water demand increases the amount of the Pumping Surcharge will decline. Annual revenues, however, are intended to approximately match annual costs, including contributions to the capital replacement sinking fund.

The proposed Pumping Surcharge schedule shown in Table 11 should be formally adopted by the City in accordance with the requirements of California Constitution Article XIIID (Proposition 218). Because general inflation will affect both operation and Pumping Surcharge ($/HCF)1
Previous Fiscal Year's Aggregate Water Demand 2
Up to 10,000 HCF $8.56
10,001 to 12,000 HCF $8.21
12,001 to 14,000 HCF $7.87
14,001 to 16,000 HCF $7.52
16,001 to 18,000 HCF $7.18
18,001 to 20,000 HCF $6.83
20,001 to 22,000 HCF $6.49
22,001 to 24,000 HCF $6.14
24,001 to 26,000 HCF $5.80
26,001 to 28,000 HCF $5.45
28,001 to 30,000 HCF $5.11 <-- Est. Buildout
30,001 to 32,000 HCF $4.77
32,001 to 34,000 HCF $4.42
34,001 to 36,000 HCF $4.08
36,001 to 38,000 HCF $3.73
38,001 to 40,000 HCF $3.39
Over 40,000 HCF $3.04
Footnotes:
1 Proposed pumping surcharge schedule for FY 2022/23. This entire schedule should be adjusted for inflation at the beginning of each fiscal year, as described in the report. 2 Each subsequent fiscal year the pumping surcharge is adjusted based on the water demand from the previous fiscal year, in accordance with the schedule.

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Packet Pg. 264 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Passalacqua Pumping Surcharge 41 maintenance costs and capital replacement costs it is recommended that the City adjust the entire Pumping Surcharge schedule annually, at the beginning of each fiscal year, based on changes in the San Francisco-Oakland-Hayward Consumer Price Index (SF-CPI). Annual inflationary adjustments for up to five years can be approved as part of the Proposition 218 rate approval process in accordance with Government Code Section 53756. Any additional adjustments after five years (i.e., after FY 2026/27) would require a new Proposition 218 process and City Council approval.

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Packet Pg. 265 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Special Meter Maintenance Charge 42 SPECIAL METER MAINTENANCE CHARGE
The City serves a single meter assembly for the Montage resort which is much larger than any other water service connection within the City, and the dual-purpose (fire and domestic flows) is atypical relative to other meters maintained by the City.

Because of the unique circumstances for this particular situation, it is appropriate to impose a separate monthly charge for meter maintenance and replacement. This charge is in addition to the monthly service charge and the uniform water usage rate imposed by the City associated with this water service.

Table 12 summarizes the calculation of a monthly meter maintenance and replacement charge for the dual-purpose compound water meter at the Montage resort development. All costs are expressed in current dollars. A 15-year service life for the meter assembly has been assumed and is believed to be reasonable for this type of application. The cost analysis results in a monthly meter maintenance and replacement charge of $284.83. This amount includes a credit for the estimated meter maintenance and replacement charge implicitly embedded in the monthly service charge for a standard 3” meter. The credit is based on the installation cost for a 3” meter, as contained in the City’s Master Fee Schedule for FY 2019/20.

The proposed monthly maintenance and replacement charge should be formally adopted by the City in accordance with the requirements of California Constitution Article XIIID (Proposition 218). The calculations presented herein are in current dollars. Because general inflation will affect both maintenance and capital replacement costs it is recommended that the City adjust the monthly charge annually, at the beginning of each fiscal year, based on changes in the San FranciscoOakland-Hayward Consumer Price Index (SF-CPI). Annual inflationary adjustments for up to five years can be approved as part of the Proposition 218 rate approval process in accordance with Government Code Section 53756. Any additional adjustments after five years (i.e., for fiscal year 2023 - 2024) would require a new Proposition 218 process and City Council approval.

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Packet Pg. 266 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Special Meter Maintenance Charge 43 Annual
Hours
Hourly
Rate1
Annual
O&M Cost2
Annual Maintenance Costs
Water Distribution Operator312 $115.00 $1,380
Maintenance Parts4
$282
Credit for 3" Meter Maint. & Replac.5$ (217.67)
Total Maintenance Costs $1,444
Estimated
Meter Cost
Expected
Useful Life
Annual
Replac. Cost
Annualized Life Cycle Replacement Cost
10" Meter w/ 2" Bypass6$28,166 15 $1,878
Labor and Misc. Parts7$1,444 15 $96
Total Annualized Replacement Cost $1,974
Total Annual Maintenance & Replacement Costs $3,418
MONTHLY MAINTENANCE AND REPLACEMENT CHARGE8 $284.83
Footnotes:
4 Miscelleneous maintenance parts estimated at 1% of original cost of the meter assembly. 5 Credit for the estimated meter maintenance and replacement costs for a 3" meter, which is embedded in the standard monthly service charge to be imposed for this installation. 6 Based on a 2018 quote for meter assembly from Pace Supply Corp. and 20 year service life and escalated by the CPI to 2021.
7 Assumes labor and miscellaneous parts for replacement is the same as annual maintenance effort. 8 To be imposed for this installation in addition to the monthly service charge for a standard 3" water meter. 3 Based on actual hours spent during FY 2019/20 as provided by City staff 1 Hourly rate, from the City's Master Fee Schedule effective July 1, 2020, includes salaries, benefits, and overhead costs.
2 Minor discrepencies due to rounding.

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Packet Pg. 267 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Shortage Rate Surcharge 44 WATER SHORTAGE RATE SURCHARGE
This section presents recommended financial strategies in the event of drought, including Water Shortage Rate Surcharges, which are to be overlaid on then-current water rates during the time that a water shortage is declared by the City. Water shortage surcharges would be temporary.

The Water Shortage Rate Surcharge is a tool the City would use to reduce the (potentially severe) financial impacts associated with reduced water sales and increases in operating costs during a drought event. The multi-pronged approach includes implementing the temporary surcharge (see Row 24 of Table 13), reducing capital spending (see Rows 25 & 26 of Table 13), and relying (modestly) on reserves to help bridge the financial deficit (see Row 27 of Table 13).

The proposed updates to the City’s Water Shortage Surcharges addresses the requirements of California Senate Bill (SB) 6068, which has directed (some) water utilities to establish water shortage contingency plans that include 6 stages of shortage for its water shortage contingency planning. In the future, the State will issue directives to public water utilities within the construct of this 6-stage system, therefore the proposed updates to the City’s water shortage strategy are consistent with the framework being used by state regulators.

Table 13 presents:
1) The water usage reduction goals (by stage) as dictated by SB 606 (Row 1) 2) The assumed actual water use reduction during each respective stage (Row 2) 3) The proposed Water Shortage Rate Surcharge, expressed as a percent increase to all water rates (Rows 5 & 6)
4) The changes in revenue for each respective stage (total revenue in Row 7) 8 Codified as Water Code Section 10632

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Packet Pg. 268 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Shortage Rate Surcharge 45 5) The changes in expenditures for each respective stage (Rows 10 through 16) including the proposed reduction in capital spending (Rows 25 & 26) 6) The financial deficit that will occur even with the mitigating measures (Row 27) It should be noted that the temporary Water Shortage Rate Surcharges would only partially assist in covering the costs of providing water service during shortage conditions. Revenue from the surcharges would help bridge the financial deficit and would not exceed the cost of providing service. The Water Shortage Rate Surcharges and reduction in capital spending have been calibrated to yield an overall deficit in the general range of $200 thousand, regardless of the stage. Given the City’s reserve policies, this size of a deficit was deemed sustainable for the duration of an extended drought.

Under normal water supply conditions and in shortage Stages 1 (with voluntary measures), the then-current water rate structure remains in place. Beginning in Stage 2, a Water Shortage Rate Surcharge of 6 percent will be added to the then-current Water Usage Rates and fixed Service Charges. The surcharge will increase to 10 percent in Stage 3, 15 percent in Stage 4, 20 percent in Stage 5, and 24 percent in Stage 6.

Under normal water supply conditions and in shortage Stages 1, the planned levels of capital spending remain in place. The planned level of capital spending won’t be changed until Stage 2 at which time it will be reduced by 5 percent, followed by 15 percent in Stage 3, 25 percent decrease in Stage 4, a 40 percent decrease in Stage 5, and a 60 percent decrease in Stage 6.

The Water Shortage Rate Surcharge implemented in Stages 2 through 6 helps recover a portion of the revenue from the shortfall. The proposed Water Shortage Rate Surcharge policy shown in Table 13 (Row 23) should be formally adopted by the City following the requirements of California Constitution Article XIIID (Proposition 218).

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Packet Pg. 269 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Water Shortage Surcharge 46 Normal
Supply
Conditions1
Stage 1
Minor
Shortage
Stage 2
Moderate
Shortage
Stage 3
Significant
Shortage
Stage 4
Urgent
Shortage
Stage 5
Critical
Shortage
Stage 6
Severe
Shortage
1 Use Reduction Goal --> n/a 0% to 10% 10% to 20% 20% to 30% 30% to 40% 40% to 50% > 50% 2 Modeled Use Reduction --> 5% 15% 25% 35% 45% 55%
Revenues
3 Service Charge Revenues $2,016,000 $2,016,000 $2,016,000 $2,016,000 $2,016,000 $2,016,000 $2,016,000 4 Water Usage Charge Revenues 2 $4,273,000 $4,059,000 $3,632,000 $3,205,000 $2,777,000 $2,350,000 $1,923,000 5 Other Revenue and Transfers In $61,000 $61,000 $61,000 $61,000 $61,000 $61,000 $61,000 6 Use of Reserves4 $566,000 $566,000 $566,000 $566,000 $566,000 $566,000 $566,000 7 Total Sources $6,916,000 $6,702,000 $6,275,000 $5,848,000 $5,420,000 $4,993,000 $4,566,000 8 (% of Normal) 97% 91% 85% 78% 72% 66%
9 Revenue Deficit due to Drought (na) (214,000) (641,000) (1,068,000) (1,496,000) (1,923,000) (2,350,000) Expenditures and Transfers
10 Employee Costs $2,525,000 $2,525,000 $2,525,000 $2,525,000 $2,525,000 $2,525,000 $2,525,000 11 Utilities & Fuel $280,000 $273,000 $259,000 $245,000 $231,000 $217,000 $203,000 12 Professional Services $368,000 $368,000 $368,000 $368,000 $368,000 $368,000 $368,000 13 Maintenance & Operations $788,000 $788,000 $788,000 $788,000 $788,000 $788,000 $788,000 14 General Administration $623,000 $623,000 $623,000 $623,000 $623,000 $623,000 $623,000 15 Conservation 5 $30,000 $32,000 $39,000 $54,000 $82,000 $137,000 $250,000 16 Typical Capital Spending $2,302,000 $2,302,000 $2,302,000 $2,302,000 $2,302,000 $2,302,000 $2,302,000 19 Total Expenditures $6,916,000 $6,911,000 $6,904,000 $6,905,000 $6,919,000 $6,960,000 $7,059,000 20 (% of Normal) 100% 100% 100% 100% 101% 102%
21 Change in Expenses due to Drought (na) -$5,000 -$12,000 -$11,000 $3,000 $44,000 $143,000 22 Total Deficit Due to Drought - (209,000) (629,000) (1,057,000) (1,499,000) (1,967,000) (2,493,000) 23 Percentage: 0% 6% 10% 15% 20% 24%
24 Revenue: $0 $339,000 $522,000 $719,000 $873,000 $945,000 25 0% 0% 5% 15% 25% 40% 60%
26 $0 $0 -$115,000 -$345,000 -$576,000 -$921,000 -$1,381,000 27 Surplus/(Deficit) in after Remedial Measures 6-$209,000 -$175,000 -$190,000 -$204,000 -$173,000 -$167,000 1 Analysis based on FY 2021/22 budget and assumed that current usage reflects normal water supply conditions. 2 Assumes that water usage revenue would decline in proportion to water sales. 3 Water shortage charges are an incremental increase to both the Water Usage Rates and the fixed monthly Service Charge. 4 Represents the planned change in fund balance during the Test Year. 5 Estimated water conservation program costs assumed to increase in inverse proportion to water use reductions. 6 Deficits to be absorbed by Water Fund reserves.

Rate Surcharge Revenue3
Capital Spending Reduction

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Packet Pg. 270 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 47 WASTEWATER RATE STUDY
The following subsections include the wastewater utility’s financial plan, cost of service, rate design, and proposed wastewater rates schedule. The information has some redundancies with Section 2 (by design to allow the section to stand alone).

WASTEWATER UTILITY FINANCIAL PLAN
This section presents the Wastewater Utility’s 10-year Financial Plan, including a description of the source data, assumptions, and the City’s financial policies. The City provided historical and budgeted financial information, including historical and budgeted operating costs, a multi-year capital improvement program (CIP), and outstanding debt service obligations. City staff also assisted in providing other assumptions and policies, such as reserve targets and escalation rates for operating costs (all of which are described in the following subsections).

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

The financial plan indicates that the Wastewater Utility currently has a revenue shortfall, which is primarily due to the fact that the City hasn’t raised wastewater rates since 2016. Operating costs have increased significantly since 2016 due to inflation.

The Study concludes that rate revenue increases will be required in order to afford operating and capital expenses. The schedules attached to this report include detailed data supporting the Wastewater Utility Financial Plan discussed herein.

The Wastewater Utility Financial Plan reflects assumptions and estimates believed reasonable at the present time. However, conditions change. It is recommended that

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Packet Pg. 271 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 48 the City review the financial condition of the Wastewater Utility and reaffirm annual rate adjustments as part of the annual budget process, as well as perform a more comprehensive financial plan and wastewater rate update every 5 years or as conditions dictate.

WASTEWATER UTILITY BEGINNING FUND BALANCES
The ending cash balance for FY 2020/21 was used to establish the FY 2021/22 beginning balance, as outlined in Table 14. It should be noted that the amount of cash that the Wastewater Utility keeps in reserves is a product of its reserve policies (see Section 3.10).

CUSTOMER GROWTH
In recent years, the City has collected and average of approximately $263 thousand per year in Development Capacity Charges revenue from new customers connecting to the system, which equates to a growth rate of approximately 0.59% per year. This Study assumes that this growth trend, and the associated Development Capacity Charges revenue, will continue for the duration of the next 10 years.

WASTEWATER UTILITY RATE REVENUE
Rate revenue is the revenue generated from customers for wastewater service. The City collects rate revenue from wastewater customers based on a fixed “Service Charge” (assessed based on meter sizes) and a wastewater “Usage Rate” (applied to Fund 530 (Wastewater Operations) $3,002,000
Fund 532 (Wastewater Capital Reserve) $736,000
Total Unrestricted: $3,738,000
Fund 930 (Restricted Wastewater Capacity Fees) $1,428,000 Total Reserves: $5,166,000

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Packet Pg. 272 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 49 each hundred cubic feet9(“HCF”) of winter water use10 for residential customers and all water use for non-residential customers). Customers receive a monthly bill. The Wastewater Utility Financial Plan starts with FY 2021/22 budgeted rate revenues.

Estimated future wastewater demand and rate revenues include the small amount of customer growth (see Section 3.3) as well as the annual rate revenue adjustments proposed by this Study. Other than demand increases associated with customer growth, wastewater demand is anticipated to remain constant. Budgeted and projected rate revenues (including proposed rate adjustments) are listed in the first table in Schedule WW-3.

WASTEWATER UTILITY NON-RATE REVENUES
In addition to rate revenue, the City receives additional “non-rate revenue” from sources such as miscellaneous service fees (operating revenue), Development Capacity Charges, grants, and interest revenue on investments. Projections of all nonrate revenues were based on FY 2021/22 budgeted revenues with the exception of interest income which was calculated annually based upon projected fund balances and assumed interest rate of 2.01%, which is consistent with the City’s historical interest earnings relative to its total reserve levels. Budgeted wastewater rate and non-rate revenues are depicted in Figure 7 below and listed in detail in the first table in Schedule WW-3.
9 One HCF is equal to 748 gallons
10 Winter water usage refers to the average water usage during the prior period of January through April, with the highest month omitted.

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Packet Pg. 273 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 50 WASTEWATER UTILITY OPERATING AND DEBT EXPENSES
The Wastewater Utility’s expenses include operating and maintenance expenses, debt service, and capital spending. Capital spending is addressed separately in Section 3.9.

Future operating and maintenance expenses were projected based upon the budgeted expenditures from FY 2021/22 and adjusted for inflation (see Section 3.8).

Major budgeted expense categories for FY 2021/22 are depicted in Figure 8. Budgeted and projected operating and maintenance costs as well as debt service expenses are listed in detail in Schedule WW-1.

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Packet Pg. 274 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 51 Figure 8: Wastewater Utility Operating & Debt Expenses (FY 2021/22) The Wastewater Utility currently pays about $1,954,000 annually on debt service related to a 2015 Refunding Bond and a 2012 Taxable Pension Obligation Bond (annual payments of approximately $160,000 and will be retired in FY 2022/23).

While a general increase in capital spending is forecasted, this Wastewater Utility financial plan does not propose any new debt issues during the planning period (see Section 3.9).

DEBT SERVICE COVERAGE
One of the requirements associated with bond financing is to maintain rates and other wastewater system revenues at levels sufficient to meet debt service coverage requirements. At present, the City is required to maintain wastewater system revenues at a level that covers all ongoing operating and maintenance costs, as well as 1.20 times annual debt service. Based on recently published guidance from Fitch Ratings, utility systems with midrange financial profiles should maintain a DCR greater

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Packet Pg. 275 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 52 than 1.50 times annual debt service. The Wastewater Utility is forecasted to have a DCR of approximately 1.24 in FY 2022/23 (after proposed rate increases, see Schedule WW-3, Row 27) and, with the proposed rate adjustments, is expected to rebuild the DCR to healthier levels by FY 2023/24.

COST ESCALATION
Annual cost escalation factors for the various types of expenses were developed based upon a review of historical inflation trends, published inflation forecasts, and discussions with City staff. During the projection period, all expenses are projected to increase at 4.0 percent per year through FY 2023/24 and 3.0 percent thereafter.

WASTEWATER UTILITY CAPITAL IMPROVEMENT PROGRAM
Figure 9 shows capital expenditures from FY 2021/22 through FY 2030/31 that are needed to pro-actively address the wastewater system’s rehabilitation needs associated with aging conveyance, treatment facilities, pump stations, and other system facilities. The average annual spending of about $2.6 million is significantly lower than first planned by the City’s engineering department in order to avoid a spike in near-term wastewater rates. Schedule WW-2 provides a detailed list of the budgeted capital projects through FY 2024/25, the budgeted capital spending from FY 2025/26 through FY 2031/32, and a list of deferred capital projects. The actual projects that are built during those years may change based on system priorities. The level of capital spending is shown to increase after FY 2028/29 as the cumulation of rate increases positions the Wastewater Utility to afford more capital spending.

This financial plan is proposing that all capital spend be funded on a PayGo basis as opposed to using a debt strategy. This decision is based on the fact that debt is typically used to address anomalous spikes in capital spending. There is not sufficient time to issue debt for the immediate spike in capital spending, and the long-term increase in capital spending is not a “spike” in spending but rather a sustained increase to a “new normal” level of annual re-investment in the wastewater system’s aging infrastructure.

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Packet Pg. 276 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 53 Figure 9: Wastewater Utility Historic and Projected Capital Spending

WASTEWATER UTILITY FUNDS
The financial plan model is based on the fund, reserve, and account structures currently used by the City. These structures include recent modifications to improve efficient funding of the capital improvement program. Figure 10 is a schematic diagram of the funds/reserves and major cash flows associated with the financial plan model.

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Packet Pg. 277 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 54 The fund / reserve structure is comprised of:

Operating Fund – The Wastewater Operating Fund (Fund 530) is the primary fund within the Wastewater Utility. Most revenue, including rate revenues, flow into the Operating Fund and all operating and maintenance costs, including debt service payments, are paid out of this fund. Funds are also transferred from the Operating Fund to the Capital Replacement Reserve to provide funds for capital projects intended to rehabilitate and upgrade facilities. While not necessarily a roadmap for future City decisions on transfers, this financial plan shows annual transfers from the Operating Fund to the Capital Replacement Reserve sufficient to meet the capital improvement for each year in the planning period.

Capital Replacement Fund – The Capital Replacement Fund (Fund 532) is intended to serve as a mechanism for funding rehabilitation, replacement, and upgrade projects contained in the capital improvement program. The reserve is funded with annual transfers of rate revenue from the Operating Fund (see the second table in Schedule WW-3). Funds are then used for capital project expenditures. By establishing regular transfers from the Operating Fund, the City is able to fund capital projects in a manner that facilitates rate stability and/or modest annual rate adjustments. This reserve also helps to establish and maintain steady funding of the ongoing replacement and rehabilitation efforts of the utility system, which many utilities neglect as part of the financial obligations of long-term sustainability of service.

Wastewater Capacity Fund – The Wastewater Capacity Fund (Fund 930) is used to account for revenues from wastewater system Development Capacity Charges. The City’s Development Capacity Charges are based on a system buy-in methodology. As such, capacity fee revenues reimburse the utilities for prior investment in wastewater system capacity including debt service payments in order to help the City meet its DCR obligations. The financial plan model use available Development Capacity Charge revenues to help pay for planned capital improvement projects but does not foresee the need to supplement debt service payments.

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Packet Pg. 278 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 55 CASH RESERVE POLICIES
Cash reserve policies are cash balances targets that are retained for specific cash flow needs. The target for reserves is an important component when developing a multiyear Wastewater Utility Financial Plan and maintaining prudent reserves is an essential component of any sound financial management strategy. Utilities rely on reserves for financial stability; credit rating agencies evaluate utilities in part on their adherence to formally adopted reserve targets; and lending agencies require utilities to maintain specific debt reserves for outstanding loans. The target levels of the policies below are consistent with: 1) the City’s established policies and practices; 2) the findings of reserve studies conducted by the AWWA; 3) a healthy level of reserves for a utility per the evaluation criteria published by rating agencies (e.g., Fitch, Moody’s, and Standard & Poor’s); and 4) Hildebrand Consulting and The Reed Group’s industry experience for similar systems.

The following recommended reserve policies are based on the policies that were recommended in the 2016 rate study with some minor modifications. The policy recommendations are intended to help the City mitigate and manage financial risk while meeting service and financial obligations.

Contingency Reserve – The City currently has a policy goal (Resolution No. 139-2000) to maintain Contingency Reserves within the Operating Fund equal to 25 percent of annual rate revenue (or currently about $1.75 million). The purpose of the Contingency Reserve is to provide working capital and funds for unplanned operating and maintenance expenditures or revenue shortfalls resulting from reduced wastewater rate revenue. The balance in the Operating Fund is current meeting the target Contingency Reserve.

Debt Service Reserve – While a Debt Service Reserve is required by some debt agreements as security against debt repayment obligations, none of the Wastewater Utility’s current debt contract have such a requirement.

Capital Replacement Reserve – A capital replacement reserve serves the dual purpose of (1) supporting the City’s PayGo strategy by absorbing some of the inherent

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Packet Pg. 279 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 56 fluctuations in annual capital spending and (2) serves as safety net in the event of the catastrophic failure of a major system asset (such as a pump station or a major wastewater trunkline). While the City does not currently maintain a targeted reserve in the Capital Replacement Fund, this financial plan proposes to establish the practice of working towards a target balance of $1.0 million during the planning period. In the future the City may wish to formalize the practice with a more detailed analysis of the appropriate target levels.

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

Based upon the previously discussed financial data, assumptions, policies, and PayGo strategy, this Study proposes a 5-year schedule of annual rate adjustments as shown in Table 15.

It is important to note that water rates in the first year (FY 2022/23) will be modified based on the findings of the cost-of-service analysis, which calls for more costs to be recovered through the fixed charges (see Section 3.13). This means that the percent Rate Adjustment Date
July 1, 2021
July 1, 2022
July 1, 2023
July 1, 2024
July 1, 2025 6.0%
Proposed Rate
Increase

8.0%

7.0%

6.0%

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Packet Pg. 280 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 57 change to individual customer bills may differ from the percent change in rate revenue received by the City.

The numbers provided in the first table in Schedule WW-3 (cash flow proforma) are summarized graphically in Table 14, which shows that the Operating Fund target reserves are met in FY 2023/24 and the DCR attains a healthy level by FY 2023/24.

The proposed rate increases are driven by the cost inflation that has occurred since the last rate increase in 2016.

Schedule WW-3 shows the cash flow with each of the Wastewater Utility’s fund and the projected transfers between the Operating Fund, the Capital Replacement Fund and the Capacity Fund.

After the final recommended increase in FY 2026/27, it is anticipated (barring unforeseen emergencies or changes in infrastructure/operational needs) that the Proposed Revenue Increases: 8.0% 8.0% 7.0% 6.0% 6.0% 6.0% 5.0% 6.0% 6.0% 5.0% Debt Coverage Ratio: 2.20 1.24 1.55 1.79 2.02 2.25 2.51 2.75 3.05 3.38 3.66 $0
$1
$2
$3
$4
$5
$6 MILLIONS
Combined Fund Balance (ending)
Target Reserve Level Minimum Reserve Level
$0
$2
$4
$6
$8
$10
$12
$14
$16
FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 Total Revenue / Expenses ($M) Non-Rate Revenue Existing Rate Revenue Additional Rate Revenue Operating Expenses Debt Service Cash Funded Capital Spending Expenses Revenues

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Packet Pg. 281 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 58 increases will need to continue at around 5 to 6 percent per year, which is needed to increase revenues to match the City’s increase in annual capital spending on critical infrastructure.

WASTEWATER COST OF SERVICE & RATE STRUCTURE
The COS analysis evaluates the cost of providing wastewater service and allocates those costs to rate structure components to ensure the proposed rates are aligned with the costs to provide service. The COS analysis is performed in order to comply with Proposition 218, which requires wastewater rates to be equitably apportioned and proportional to the cost of providing wastewater service.

Upon completion of the COS analysis, a rate structure analysis was performed to evaluate rate structure modifications and calculate specific rate schedules for implementation at the beginning of FY 2022/23. The complete schedule of proposed rates for FY 2022/23 through FY 2026/27 is detailed in Schedule WW-4.

3.13.1 General Methodology
There are three steps to determining wastewater rates. These are:
▪ Determine annual wastewater rate revenue requirements ▪ Analyze the cost of providing service to each customer class ▪ Design wastewater rates to recover costs from each customer class.

The Wastewater Utility Financial Plan was used to identify the wastewater rate revenue requirements for each fiscal year of the five-year planning period.

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Packet Pg. 282 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 59 Once the annual wastewater rate revenue requirement has been determined, the next step in the rate setting process is to evaluate the cost of providing service.

Wastewater rate calculations contained herein are intended to generate the level of revenue commensurate with the revenue requirement from the City’s wastewater service customers. The manner in which each customer is responsible for the wastewater utility’s costs is the determining factor in the cost-of-service analysis.

3.13.2 Current Wastewater Rates
Single family and multi-family residential customers are subject to fixed monthly Service Charges plus a Usage Charge based on winter water usage. The Service Charges are assessed based on the number of dwelling units and differ between different types of residential accounts due to differences in demand characteristics.

Each year, the City monitors water usage during low-use winter months (the average of the three lowest bills rendered between January through April) and then determines the average winter usage for each residential customer (seasonal sewer average or “SSA”). The SSA value is assumed to be primarily indoor water usage. In May of each year, the City calculates a new wastewater bill amount for each residential customer based on the prior winter water use. When the winter average is not available the average for all residential accounts is used. In some cases, adjustments are made to the winter average based on special circumstances.

Non-residential customers are subject to a low, medium, or high strength Usage Rate based on the type of type of business activity. The usage charge is calculated based on actual water usage within each monthly billing cycle since non-residential accounts have minimal outdoor water usage (or a separate meter for irrigation). Nonresidential wastewater bills also include a fixed service charge based on the size of the water meter.

The current Service Charge schedule (which is assessed monthly) is summarized in Table 16.

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Packet Pg. 283 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 60 3.13.3 Customer Account Data and Sewer Flow and Loading Estimates Wastewater rate calculations are based on a number of factors related to the City’s customers. Factors include the number of customers, customer classes, water usage, estimated sewer flows, and sewer strength characteristics as measured by biochemical oxygen demand (BOD) and total suspended solids (TSS).

Residential sewer flows are estimated based on average water usage during winter months. A review of residential water usage data indicated that about 53.3 percent of annual water usage returns to the sewer system (based on average winter water Monthly Service Charge
Single Family $37.33 per dwelling unit
Single Family with ADU (per DU) $37.33 per dwelling unit Flat Rate1
$99.76 per dwelling unit
Multifamily (per DU) $34.50 per dwelling unit
Non-Residential
1" meter $60.67 per meter
1 1/2" meter $118.49 per meter
2" meter $188.16 per meter
3" meter $350.82 per meter
4" meter $583.15 per meter
6" meter $1,163.46 per meter
8" meter $1,860.11 per meter
10" meter $2,673.10 per meter
12" meter $4,995.02 per meter
Wastewater Usage Rates ($/HCF)
All Residential 2
$10.41 per HCF
Non-Residential 3
Low Strength $9.37 per HCF
Medium Strength $13.62 per HCF
High Strength $19.85 per HCF
3 Applies to actual monthly water usage.
1 Applies to customers not receiving water service
and
2 Applies to the account's measured SSA

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Packet Pg. 284 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 61 usage). For multi-family customers, about 80 percent of annual water usage is estimated to return to the sewer system, which is expected since irrigation water usage tends to be either minimal or separately metered. Single-family accounts with ADUs show 45.6 percent of annual water usage returning to the sewer system. Nonresidential sewer flows are based on actual water usage, with a 90 percent rate of return to the sewer system to reflect minor irrigation usage.

The sewer utility serves 3,690 single-family homes, 111 single-family accounts with an ADU (therefore 222 DUs), 1,005 multi-family dwelling units, and 488 non-residential customers. On average, single-family sewer flows (based on winter water usage) are about 5.0 HCF per month. For multi-family dwellings, the average sewer flow is about

4.0 HCF per month (based on winter water usage). This average sewer flow value is then used to calculate a conversion factor of 0.80 to convert the number of multifamily dwellings to the equivalent number of single-family dwellings (ESFU). The conversion factor for single-family accounts with ADUs (on a single meter) is 0.662. Nonresidential sewer flows vary based on customer characteristics.

Wastewater rate analyses consider the strength (loading) characteristics of sewage entering treatment facilities. Strength factors for BOD and TSS are considered, as these factors play a key role in treatment facility operations. Residential customers are assigned standard residential strength factors of 240 mg/l for BOD and 200 mg/l for TSS. Low, medium, and high non-residential strength categories have been defined with strength factors as indicated in Table 17. Strength factors assigned to each category of customer are based on guidelines published by the California State Water Resources Control Board (SWRCB) and other sources.

Table 17 summarizes customer account and water usage data obtained from the City’s utility billing system, as well as estimates of resulting wastewater flow and loading characteristics. Applying residential and non-residential strength factors to estimates of annual sewer flows results in an estimated annual sewage volume and loading that is commensurate to actual WWTF inflows. Account information is based on the utility billing data from FY 2019/20.

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Packet Pg. 285 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 62 Customer Class
No. of DUs/
Accounts 1
No. of
ESFDs
Water
Usage 1
Rate of
Return
Estimated
Annual
Wastewater
Flow 2
Estimated
Annual
Wastewater
Flow
BOD
Strength 3
Annual BOD
Loading
TSS
Strength 3
Annual TSS
Loading
HCF HCF MG mg/l lbs mg/l lbs
Residential
Single Family Residential 3,690 3,690 419,200 53.3% 223,500 167.2 240 334,600 200 278,900 Single Family + ADU 222 147 19,500 45.6% 8,900 6.7 240 13,300 200 11,100 Multi-Family Residential 1,005 801 60,400 80.3% 48,500 36.3 240 72,600 200 60,500 Non-Residential
Low Strength 339 841 69,100 90.0% 57,800 43.2 240 86,500 200 72,100 Medium Strength 85 224 30,700 90.0% 25,700 19.2 500 80,200 400 64,100 High Strength 64 163 28,700 90.0% 24,000 18.0 1,000 149,700 600 89,800 Totals 5,405 5,865 627,600 388,400 291 736,900 576,500
Notes: 1
Based on utility billing system data for FY 2019/20. DU = dwelling units. 2 Based on annualized average winter water usage for residential accounts (based on the lowest three months between January and April) and annual water usage for non-residential accounts. 3
Based on previous wastewater rate analyses, SWRCB guidelines, and adjustments to better match actual treatment plant flows and loadings.

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Packet Pg. 286 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 63 3.13.4 Wastewater Cost of Service & Rate Design
To develop equitable wastewater rates, the revenue requirement is allocated to various customer classifications according to the services provided and the demands placed on the sewer system. Table 18 summarizes how the wastewater rate revenue requirement is allocated to fixed charges as well as to flow, BOD, and TSS components, which comprise the usage charges. Once total costs are allocated unit costs were determined by dividing the total cost for each component by the number of units identified in Table 17. These unit costs become the basis for then assigning costs to customer classes.

The cost-of-service analysis for wastewater service is more complicated than water rate analysis in that treatment costs are separated from collection system costs.

Collection system costs are allocated entirely on the basis of flow, whereas treatment costs are allocated on the basis of flow, BOD, and TSS.

Cost Category
Category
Allocation
Percentages
Parameter
Allocation
Percentages4
Annual Cost
Allocated to
Each
Parameter
Total
Quantities
Unit Cost
for Each
Parameter
Fixed Charge Costs1 40% $3,026,000 `
Customer Accounts 6% $181,600 5,405 $33.60 per account
Equiv. Single Family Dwellings (ESFDs) 94% $2,844,400 5,865 $484.98 per ESFD Usage Charge Costs for Collection 2 15% $1,134,800
Flow (MG) $1,134,800 291 $3,906.06 per MG
Usage Charge Costs for Treatment 3 45% $3,404,300
Flow (MG) 34% $1,157,500 291 $3,984.19 per MG
BOD (lbs) 33% $1,123,400 736,900 $1.52 per lbs of BOD
TSS (lbs) 33% $1,123,400 576,500 $1.95 per lbs of TSS
Total FY 2021/22 Wastewater Rate Revenue Requirement $7,565,000 Notes:
1 Includes estimated administrative costs, debt service costs, a portion of maintenance costs, and transfer to the capital fund. 2 Includes estimated collection system and a portion of maintenance costs. 3 Includes estimated wastewater treatment costs.
4 Parameter allocations based on previous rate analyses, information provided by City, and rate setting practices.

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Packet Pg. 287 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 64 We have relied on the information that is available for allocating costs to the various categories, as well as relied upon professional judgment and standard estimating practices used in rate setting to allocate costs across flow, BOD, and TSS parameters.

The wastewater revenue requirement has been allocated 40 percent to fixed service charges, 15 percent to the collection system, and 45 percent to treatment. Sewer treatment costs have been allocated 34 percent to flow, 33 percent to BOD, and 33 percent to TSS. We believe these allocations are reasonable and are within the ranges found in other wastewater rate analyses.

The unit costs from Table 18 are applied to the annual wastewater flows, as well as BOD and TSS loadings associated with each customer class (see Table 17) to arrive at the allocation of total costs to each customer class. Table 19 presents the allocation of costs to each user class.

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Packet Pg. 288 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 65 Usage Charge Costs
Collection Treatment
No. of Customer Capacity Flow Flow BOD SS Allocation
DUs/ Customer Class Unit Cost = Unit Cost = Unit Cost = Unit Cost = Unit Cost = Unit Cost = of Total Accts. $33.60 $484.98 $3,906.06 $3,984.19 $1.52 $1.95 Costs per account per ESFD per MG per MG per lbs BOD per lbs TSS Residential
3,690 Single Family Residential $124,000 $1,789,500 $653,000 $666,100 $510,100 $543,500 $4,286,200 222 Single Family + ADU $7,500 $71,300 $26,000 $26,600 $20,300 $21,600 $173,300 1,005 Multi-Family $33,800 $388,300 $141,700 $144,500 $110,700 $117,900 $936,900 Non-Residential
339 Low Strength $11,400 $407,700 $168,800 $172,300 $131,900 $140,500 $1,032,600 85 Medium Strength $2,800 $108,600 $75,100 $76,600 $122,300 $124,900 $510,300 64 High Strength $2,100 $78,900 $70,100 $71,500 $228,200 $175,000 $625,800 5,405 Totals (rounded) $181,600 $2,844,300 $1,134,700 $1,157,600 $1,123,500 $1,123,400 $7,565,000 Notes: 1
Unit costs from Table 16 are multiplied by the wastewater flow, the BOD loading, or the SS loading for each customer class from Table 15.

Fixed Charge Costs

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Packet Pg. 289 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 66 No. of
DUs/
Accts. Customer Class
Estimated
Annual
Sewer Flow
BOD
Strength
TSS
Strength
Monthly
Fixed
Charge
Usage
Rate 1
Fixed
Charges
Usage
Charges
Total Annual
Revenue
HCF mg/l mg/l $/DU $/HCF
Residential
3,690 Single Family Residential 223,500 240 200 $43.21 $10.62 $1,913,300 $2,373,600 $4,287,000 222 Single Family + ADU 8,900 240 200 $29.58 $10.62 $78,800 $94,500 $174,000 1,005 Multi-Family 48,500 240 200 $35.00 $10.61 $422,100 $514,600 $937,000 Non-Residential
339 Low Strength 57,800 240 200 $9.55 $419,100 $613,300 $1,032,000 85 Medium Strength 25,700 500 400 $13.97 $111,400 $398,900 $510,000 64 High Strength 24,000 1,000 600 $20.44 $81,000 $545,100 $626,000 5,405 Totals 388,400 $3,025,700 $4,540,000 $7,566,000
Notes: 1
Wastewater usage rates apply to average winter water use for residential customers and actual monthly water use for non-residential customers. 2 Monthly service charges for non-residential customers vary based on the size of the water meter (see Schedule WW-4).

Varies by
Meter
Size 2

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Packet Pg. 290 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 67 Table 20 presents the final wastewater user rates and charges recommended for each customer class. Rates for residential customers include flat monthly charges for each DU. The logic for the relative pricing between the three residential account types is explained in Section 3.13.3. Non-residential (low, medium, and high strength) customers are subject to a monthly Service Charge based on meter size (see the meter equivalency schedule in Table 4) and wastewater usage rates applied to actual monthly water usage. Usage charges vary for each strength category.

No changes in the wastewater rate structure is proposed at this time, although the proposed rate schedule for July 2022 reflects the updated cost-of-service analysis, as presented herein.

3.13.5 Special Rates
The City currently has a few special rates applicable in certain circumstances.

Recommendations related to these special circumstances are as follows:

Residential Flat Rates – Residential customers receiving wastewater service, but not water service, from the City should continue to be charged for service based on a flat monthly service charge. The sewer-only residential wastewater rate for single family customers was determined to be $96.31 per month based on the monthly service charge for single family customers, plus a usage charge based on an average winter water use among single family customers of 5 HCF.

Non-Residential Flat Rates – The City maintains a small number of nonresidential flat rate customers. The City should continue to charge these customers for wastewater service based on customer characteristics and estimated service demands for each account. The non-residential wastewater rate for these customers is determined based on a monthly service charge, plus a usage charge based on estimated flow and strength characteristics.

Wastewater Usage Rate for Special Situations – In limited situations, the City may provide wastewater service to customers with unique and/or significant wastewater discharge characteristics. Examples may include wineries, breweries, or food

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Packet Pg. 291 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 68 processors with non-standard strength characteristics, or with wastewater flow that does not correlate with water usage like other nonresidential accounts.

In these situations, the City may determine it is reasonable and appropriate to calculate a special wastewater usage rate based on the specific wastewater flow characteristics of each special case customer.

The cost-of-service calculations described in the preceding pages resulted in unit costs for the volumetric portion of wastewater collection and treatment in terms of flow volume, pounds of BOD, and pounds of TSS. These unit costs for collection and treatment are the building blocks for wastewater usage rates.

Flow volume $5.90 per HCF
BOD $1.52 per pound
TSS $1.95 per pound
An example calculation for developing a customer-specific wastewater usage rate for a special situation (a large winery) is shown below. The calculation relies on the unit costs identified above. The customized wastewater usage rate would be used in place of a standard (low, medium, or high) wastewater usage rate.

Sample Special Wastewater Usage Rate Calculation
Wastewater strength characteristics are estimated or determined through sampling.

For this sample calculation, BOD is assumed to be 2,500 mg/l and TSS is assumed to be 1,000 mg/l.

Wastewater Usage Rate = $5.90 + [ BOD x $1.52 + TSS x $1.95 ] x 8.34 / 1,000,000 x 748
= $5.90 + [ 2,500 x $1.52 + 1,000 x $1.95 ] x 8.34 /
1,000,000 x 748
= $5.90 + [ $3,800 + $1,950 ] x 8.34 / 1,000,000 x 748
= $41.77 per HCF of wastewater flow

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Packet Pg. 292 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 69 This customized wastewater usage rate would apply to the wastewater flow volume.

To apply the wastewater usage rate to metered water usage a rate of return factor should be applied. For example, if it is determined that 80 percent of the water usage returns to the sewer system as wastewater then the appropriate wastewater usage rate, applied to metered water usage, would be $33.42/HCF of water usage (41.77 x 80%). A fixed service charge, based on meter size, would also be part of the wastewater bill.

The unit costs used in the sample calculation above should be adjusted commensurate with any future wastewater rate changes.

3.13.6 Proposed Wastewater Rate Schedule
Table 21 summarizes the proposed wastewater rate schedule for July 2022, which reflects an overall 8 percent increase from the current wastewater rates. The proposed wastewater rates are designed to generate the rate revenue requirements as identified by this Wastewater Utility Financial Plan.

Schedule WW-4 summarizes the proposed wastewater rate schedule for the next 5 years.

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Packet Pg. 293 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Wastewater Rate Study 70 Monthly Service Charge Current
Effective July 1,
2022
Single Family $37.33 $43.21 per dwelling unit
Single Family with ADU (per DU) $37.33 $29.58 per dwelling unit Flat Rate1
$99.76 $96.31 per dwelling unit
Multifamily (per DU) $34.50 $35.00 per dwelling unit
Non-Residential
1" meter $60.67 $70.14 per meter
1 1/2" meter $118.49 $137.49 per meter
2" meter $188.16 $218.31 per meter
3" meter $350.82 $406.89 per meter
4" meter $583.15 $676.29 per meter
10" meter $2,673.10 $3,235.59 per meter
Wastewater Usage Rates ($/HCF)
All Residential 2$10.41 $10.62 per HCF
Non-Residential 3
Low Strength $9.37 $9.55 per HCF
Medium Strength $13.62 $13.97 per HCF
High Strength $19.85 $20.44 per HCF 3
Applies to actual monthly water usage. 1
Applies to customers not receiving water service and assumes an average level of water usage (5 HCF). 2
Applies to average winter water usage during the proceeding January to April period, with the highest month being omitted.

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Packet Pg. 294 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Conclusion
71 CONCLUSION
This 2022 Water and Wastewater Rate Study proposes updated utility rates for the City of Healdsburg. While the rate structures themselves required only limited updates, the financial plans for both utilities called for material increases in rate revenue. These rate increases are driven primarily by a change in the City’s approach to managing its critical utility infrastructure. The City has developed detailed capital improvement plans that are designed to pro-actively repair and replace critical and aging infrastructure in order to ensure that the City can continue to provide safe and reliable utility services.

This Study used methodologies that are aligned with industry standard practices for rate setting as promulgated by AWWA and all applicable laws, including California’s Proposition 218. The proposed annual adjustments to the water rates are expected to enable the City to continue to provide reliable service to customers while meeting the state’s mandates.

The water and wastewater rates, including the water shortage surcharges and special rates for Passalacqua, will need to be adopted in accordance with Proposition 218, which will require a detailed notice describing the proposed charges to be mailed to each affected property owner or customer at least 45 days prior to conducting a public hearing to adopt the rates.

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Packet Pg. 295 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 SCHEDULES
_____________________________________________________

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Packet Pg. 296 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules 1
FY2021/22 FY2022/23 FY2023/24 FY2024/25 FY2025/26 FY2026/27 FY2027/28 FY2028/29 FY2029/30 FY2030/31 FY2031/32 1 Wages $695,900 $723,700 $752,600 $775,200 $798,500 $822,400 $847,100 $872,500 $898,700 $925,600 $953,400 2 Wages-Overtime $24,000 $25,000 $26,000 $26,700 $27,500 $28,400 $29,200 $30,100 $31,000 $31,900 $32,900 3 Wages-Standby/On Call $33,500 $34,800 $36,200 $37,300 $38,400 $39,600 $40,800 $42,000 $43,300 $44,600 $45,900 4 Fringe Benefits $242,300 $252,000 $262,100 $269,900 $278,000 $286,400 $295,000 $303,800 $312,900 $322,300 $332,000 5 Fringe Benefits: PERS Employer Share UAL $206,300 $214,500 $223,100 $229,800 $236,700 $243,800 $251,100 $258,700 $266,400 $274,400 $282,700 6 Fringe Benefits: REMIF Workers Comp Ins $32,600 $33,900 $35,200 $36,300 $37,400 $38,500 $39,600 $40,800 $42,000 $43,300 $44,600 7 Personal Protective Equipment $5,200 $5,400 $5,600 $5,800 $6,000 $6,100 $6,300 $6,500 $6,700 $6,900 $7,100 8 Other Employee Expenses: Employee Physicals $300 $300 $300 $300 $300 $400 $400 $400 $400 $400 $400 9 Other Employee Exp: Overtime Meals $3,000 $3,100 $3,200 $3,300 $3,400 $3,500 $3,700 $3,800 $3,900 $4,000 $4,100 10 Building Maintenance Service Fee $25,600 $26,600 $27,700 $28,500 $29,400 $30,300 $31,200 $32,100 $33,100 $34,100 $35,100 11 Vehicle Service Fee $117,600 $122,300 $127,200 $131,100 $135,000 $139,000 $143,200 $147,500 $151,900 $156,500 $161,200 12 Vehicle Replacement Fee $100,000 $104,000 $108,200 $111,400 $114,700 $118,200 $121,700 $125,400 $129,100 $133,000 $137,000 13 Insurance $37,600 $39,100 $40,600 $41,800 $43,100 $44,400 $45,700 $47,100 $48,500 $50,000 $51,500 14 Telecommunication & Data Services $15,000 $15,600 $16,200 $16,700 $17,200 $17,700 $18,300 $18,800 $19,400 $20,000 $20,600 15 Property Tax $1,000 $1,000 $1,100 $1,100 $1,100 $1,200 $1,200 $1,300 $1,300 $1,300 $1,400 16 Contracted Services $28,000 $29,100 $30,300 $31,200 $32,100 $33,100 $34,100 $35,100 $36,200 $37,200 $38,400 17 Meeting, Travel, and Training-Engineering $1,100 $1,100 $1,200 $1,200 $1,300 $1,300 $1,300 $1,400 $1,400 $1,500 $1,500 18 Meeting, Travel, and Training-Maintenance $3,500 $3,600 $3,800 $3,900 $4,000 $4,100 $4,300 $4,400 $4,500 $4,700 $4,800 19 Repairs and Maintenance $120,000 $124,800 $129,800 $133,700 $137,700 $141,800 $146,100 $150,500 $155,000 $159,600 $164,400 20 License, Dues, Certs, Membrshps $2,000 $2,100 $2,200 $2,200 $2,300 $2,400 $2,400 $2,500 $2,600 $2,700 $2,700 21 Rentals and Leases $4,300 $4,500 $4,700 $4,800 $4,900 $5,100 $5,200 $5,400 $5,600 $5,700 $5,900 22 Office Supplies $2,200 $2,300 $2,400 $2,500 $2,500 $2,600 $2,700 $2,800 $2,800 $2,900 $3,000 23 Noticing $300 $300 $300 $300 $300 $400 $400 $400 $400 $400 $400 24 Government Fees $700 $700 $800 $800 $800 $800 $900 $900 $900 $900 $1,000 25 Operational Expense $180,000 $187,200 $194,700 $200,500 $206,500 $212,700 $219,100 $225,700 $232,500 $239,400 $246,600 26 Wages $842,600 $876,300 $911,400 $938,700 $966,900 $995,900 $1,025,800 $1,056,600 $1,088,300 $1,120,900 $1,154,500 27 Wages-Overtime $9,600 $10,000 $10,400 $10,700 $11,100 $11,400 $11,700 $12,100 $12,400 $12,800 $13,200 28 Wages-Standby/On Call $16,100 $16,700 $17,400 $17,900 $18,400 $19,000 $19,600 $20,100 $20,800 $21,400 $22,000 29 Fringe Benefits $316,800 $329,500 $342,700 $353,000 $363,600 $374,500 $385,700 $397,300 $409,200 $421,500 $434,100 30 Fringe Benefits: PERS Employer Share UAL $55,800 $58,100 $60,400 $62,200 $64,100 $66,000 $68,000 $70,000 $72,100 $74,300 $76,500 31 Fringe Benefits: REMIF Workers Comp Ins $49,600 $51,600 $53,700 $55,300 $57,000 $58,700 $60,400 $62,200 $64,100 $66,000 $68,000 32 Personal Protective Equipment $11,200 $11,600 $12,100 $12,500 $12,900 $13,200 $13,600 $14,000 $14,500 $14,900 $15,300 33 Other Employee Exp: Overtime Meals $1,000 $1,000 $1,100 $1,100 $1,100 $1,200 $1,200 $1,300 $1,300 $1,300 $1,400 34 Telecommunication & Data Services $7,500 $7,800 $8,100 $8,300 $8,600 $8,800 $9,100 $9,400 $9,600 $9,900 $10,200 35 Utility Services $280,000 $291,200 $302,800 $311,900 $321,300 $330,900 $340,900 $351,100 $361,600 $372,500 $383,600 36 Contracted Services $85,000 $88,400 $91,900 $94,700 $97,500 $100,500 $103,500 $106,600 $109,800 $113,100 $116,500 37 Meeting, Travel, and Training $7,500 $7,800 $8,100 $8,400 $8,600 $8,900 $9,100 $9,400 $9,700 $10,000 $10,300 38 Printing $6,500 $6,800 $7,000 $7,200 $7,500 $7,700 $7,900 $8,200 $8,400 $8,600 $8,900 39 Repairs and Maintenance $10,500 $10,900 $11,300 $11,700 $12,000 $12,400 $12,700 $13,100 $13,500 $13,900 $14,300 40 License, Dues, Certs, Membrshps $2,800 $2,900 $3,000 $3,100 $3,200 $3,300 $3,300 $3,400 $3,600 $3,700 $3,800 41 Rentals and Leases $1,000 $1,000 $1,100 $1,100 $1,100 $1,200 $1,200 $1,300 $1,300 $1,300 $1,400 42 Office Supplies $5,000 $5,200 $5,400 $5,600 $5,700 $5,900 $6,100 $6,300 $6,500 $6,700 $6,900 43 Government Fees $28,000 $29,100 $30,300 $31,200 $32,100 $33,100 $34,100 $35,100 $36,200 $37,200 $38,400 44 Operational Expense $192,100 $199,800 $207,800 $214,100 $220,500 $227,100 $233,900 $240,900 $248,100 $255,600 $263,300 45 Conservation & Energy Rebates $30,000 $31,200 $32,400 $33,400 $34,400 $35,500 $36,500 $37,600 $38,700 $39,900 $41,100 46 Overhead Allocation $438,400 $526,000 $547,000 $563,500 $580,400 $597,800 $615,700 $634,200 $653,200 $672,800 $693,000 47 Information Services Service Fee $181,400 $188,600 $196,200 $202,000 $208,100 $214,300 $220,800 $227,400 $234,200 $241,200 $248,500 48 Building Maintenance Service Fee $25,500 $26,500 $27,500 $28,400 $29,200 $30,100 $31,000 $31,900 $32,900 $33,900 $34,900 49 Insurance $92,800 $96,500 $100,400 $103,400 $106,500 $109,700 $113,000 $116,400 $119,900 $123,500 $127,200 50 Bank Fees $35,000 $36,400 $37,900 $39,000 $40,200 $41,400 $42,600 $43,900 $45,200 $46,600 $48,000 51 Debt Service $1,058,000 $1,063,000 $946,000 $780,000 $785,000 $632,000 $517,000 $518,000 $516,000 $520,000 $316,000 52 Totals $5,671,700 $5,930,900 $6,008,900 $5,994,700 $6,156,100 $6,164,700 $6,215,400 $6,387,700 $6,561,600 $6,746,800 $6,729,900

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Packet Pg. 297 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 Project Driver 1 College Street Sewer and Water Main Replacement fire capacity backbone $765,900 2 Scenic Water Main Replacement condition - low pressure $292,500 4 McDonough Water Transmission Main Replacement fire capacity backbone / condition $108,000 $1,080,000 5 Brown Street Sewer and Water Replacement condition $79,200 $793,800 6 University Street Sewer and Water Replacement fire capacity backbone $88,200 $793,800 7 Reed Court and Bianca Lane Sewer and Water Replacement fire capacity backbone $92,700 8 Healdsburg North fire capacity backbone $81,000 $810,000 9 Fitch Water Treatment Building Modernization condition $234,900 10 Abandonment and Sale of Old Dry Creek Well Field hazard mitigation $54,000 11 Dry Creek Water Treatment Plant Clear Well Leak Repair condition $46,800 $316,800 12 Gauntlett/Iverson Roof Repair & Replacement condition $883,800 13 Well Rehabilitation Program reliability / resilience $78,300 $81,000 $83,700 $86,400 $88,200 14 UV treatment for Cryptosporidium at Fitch regulatory compliance $135,000 15 UV treatment for Cryptosporidium at Dry Creek regulatory compliance $18,000 $139,500 16 CMMS Software for Linear Assets prudent infrastructure stewardship $74,700 17 Replacement Chlorine Generators at Dry Creek and WTP regulatory compliance $45,000 $45,000 18 Filtration for Fitch Well Field reliability / resilience $450,000 19 Replacement Membranes for the Gauntlett Water Treatment Plant regulatory compliance $405,000 $2,340,000 $724,500 $2,144,700 $1,196,100 $1,845,900
Estimated Annual Spending after FY 2024/25: $2.16M to $2.27M (in 2022 dollars) Deferred Projects Driver
Estimated Cost
(2022 dollars)
Fitch Filtration Plant reliability / resilience $5,000,000 University Street Sewer and Water Replacement (North Street to Mason St) fire capacity backbone $935,000 Johnson Street Sewer and Water fire capacity backbone $940,500 Totals: $6,875,500

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Packet Pg. 298 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 WATER OPERATING FUND (520) 1 Rate Revenue Increase: 2.0% 8.0% 8.0% 5.0% 5.0% 2.0% 2.0% 2.0% 2.0% 0.0% Revenue 2 Water Rate Revenue $6,237,000 $6,058,000 $6,215,000 $7,061,000 $7,809,000 $8,245,000 $8,705,000 $8,930,000 $9,161,000 $9,398,000 $9,641,000 3 Change due to growth & use $36,000 $349,000 $183,000 $46,000 $48,000 $51,000 $52,000 $54,000 $55,000 $57,000 4 Increase due to rate adjustments $121,000 $497,000 $565,000 $390,000 $412,000 $174,000 $179,000 $183,000 $188,000 $0 5 Sales shortfall due to water usage reduction ($1,000,000) Non-Rate Revenues 6 Interest Earnings $44,000 $36,000 $35,000 $40,000 $43,000 $46,000 $48,000 $49,000 $50,000 $51,000 $53,000 7 Operating Revenue $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 8 Total Revenue $5,298,000 $6,268,000 $7,113,000 $7,866,000 $8,305,000 $8,768,000 $8,995,000 $9,227,000 $9,465,000 $9,709,000 $9,768,000 O&M Costs 9 Employee Costs $2,525,000 $2,626,000 $2,731,000 $2,813,000 $2,898,000 $2,984,000 $3,074,000 $3,166,000 $3,261,000 $3,359,000 $3,460,000 10 Utilities & Fuel $280,000 $291,000 $303,000 $312,000 $321,000 $331,000 $341,000 $351,000 $362,000 $372,000 $384,000 11 Professional Services $368,000 $383,000 $398,000 $410,000 $422,000 $435,000 $448,000 $461,000 $475,000 $489,000 $504,000 12 Maintenance & Operations $788,000 $820,000 $852,000 $878,000 $904,000 $931,000 $959,000 $988,000 $1,018,000 $1,048,000 $1,080,000 13 General Administration $623,000 $718,000 $746,000 $769,000 $792,000 $815,000 $840,000 $865,000 $891,000 $918,000 $945,000 14 Conservation $30,000 $31,000 $32,000 $33,000 $34,000 $35,000 $37,000 $38,000 $39,000 $40,000 $41,000 15 Total Operating Expenses $4,614,000 $4,869,000 $5,062,000 $5,215,000 $5,371,000 $5,531,000 $5,699,000 $5,869,000 $6,046,000 $6,226,000 $6,414,000 Capital Costs
16 Total Capital Spending $805,000 $2,230,000 $1,293,000 $2,077,000 $2,503,000 $2,578,000 $2,788,000 $2,871,000 $2,958,000 $3,046,000 $3,138,000 17 Existing Debt Service $1,058,000 $1,063,000 $946,000 $780,000 $785,000 $632,000 $517,000 $518,000 $516,000 $520,000 $316,000 18 Transfer Out 58,000 341,000 894,000 1,684,000 2,040,000 2,490,000 2,722,000 2,783,000 2,843,000 2,903,000 3,023,000 19 Total Capital Expenses $1,116,000 $1,404,000 $1,840,000 $2,464,000 $2,825,000 $3,122,000 $3,239,000 $3,301,000 $3,359,000 $3,423,000 $3,339,000 20 Total Revenue Requirement $5,730,000 $6,273,000 $6,902,000 $7,679,000 $8,196,000 $8,653,000 $8,938,000 $9,170,000 $9,405,000 $9,649,000 $9,753,000 21 Beginning Year Balance - 520 $2,196,000 $1,764,000 $1,759,000 $1,970,000 $2,157,000 $2,266,000 $2,381,000 $2,438,000 $2,495,000 $2,555,000 $2,615,000 22 Surplus/(Shortfall) ($432,000) ($5,000) $211,000 $187,000 $109,000 $115,000 $57,000 $57,000 $60,000 $60,000 $15,000 23 End of Year Balance - 520 $1,764,000 $1,759,000 $1,970,000 $2,157,000 $2,266,000 $2,381,000 $2,438,000 $2,495,000 $2,555,000 $2,615,000 $2,630,000 24 Debt Reserve $205,000 $205,000 $205,000 $205,000 $205,000 $205,000 $205,000 $205,000 $205,000 $205,000 $205,000 25 Contingency Reserve $1,559,000 $1,554,000 $1,765,000 $1,952,000 $2,061,000 $2,176,000 $2,233,000 $2,290,000 $2,350,000 $2,410,000 $2,425,000 26 Available Cash $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Debt Coverage Calculations
27 Revenue Available for Debt Service* $1,689,700 $1,628,500 $2,246,200 $2,842,200 $3,121,500 $3,418,700 $3,480,300 $3,544,500 $3,607,500 $3,673,000 $3,545,100 28 Total Yearly Parity Debt Payment $1,058,000 $1,063,000 $946,000 $780,000 $785,000 $632,000 $517,000 $518,000 $516,000 $520,000 $316,000 29 Debt Coverage Ratio 1.60 1.53 2.37 3.64 3.98 5.41 6.73 6.84 6.99 7.06 11.22 * Includes Development Capacity Charge revenue

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Packet Pg. 299 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 WATER CAPITAL REPLACEMENT RESERVE (522)
WATER DEVELOPMENT CAPACITY CHARGE FUND(920) 1 Beginning Balance - 522 979,000 $969,000 $310,000 $10,000 $373,000 $82,000 $164,000 $274,000 $370,000 $447,000 $502,000 Revenues 2 Interest Income $19,700 $19,500 $6,200 $200 $7,500 $1,700 $3,300 $5,500 $7,500 $9,000 $10,100 3 Transfer In 58,000 341,000 894,000 1,684,000 2,040,000 2,490,000 2,722,000 2,783,000 2,843,000 2,903,000 3,023,000 4 Total Revenues $77,700 $360,500 $900,200 $1,684,200 $2,047,500 $2,491,700 $2,725,300 $2,788,500 $2,850,500 $2,912,000 $3,033,100 Expenditures 5 Capital Projects $88,000 $1,020,000 $1,200,000 $1,321,000 $2,339,000 $2,410,000 $2,615,000 $2,693,000 $2,774,000 $2,857,000 $2,943,000 6 Ending Balance - 522 969,000 310,000 10,000 373,000 82,000 164,000 274,000 370,000 447,000 502,000 592,000 1 Beginning Balance - 920 $1,400,000 $1,669,000 $669,000 $765,000 $200,000 $217,000 $229,000 $237,000 $240,000 $237,000 $229,000 Revenues 2 Interest Income $28,000 $34,000 $13,000 $15,000 $4,000 $4,000 $5,000 $5,000 $5,000 $5,000 $5,000 3 Development Capacity Charges $958,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 $176,000 5 Total Revenues $986,000 $210,000 $189,000 $191,000 $180,000 $180,000 $181,000 $181,000 $181,000 $181,000 $181,000 Expenditures 6 Transfer out $717,000 $1,210,000 $93,000 $756,000 $163,000 $168,000 $173,000 $178,000 $184,000 $189,000 $195,000 7 Ending Balance - 920 $1,669,000 $669,000 $765,000 $200,000 $217,000 $229,000 $237,000 $240,000 $237,000 $229,000 $215,000

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Packet Pg. 300 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 Current Rates
Effective
July 1, 2022
Effective
July 1, 2023
Effective
July 1, 2024
Effective
July 1, 2025
Effective
July 1, 2026
Water Usage Rates ($/HCF)
All Potable Water Use $5.51 $6.00 $6.48 $7.00 $7.35 $7.72 Riverview HOA 1$1.44 $1.47 $1.59 $1.71 $1.80 $1.89
Fixed Monthly Service Charges
Single Family $23.19 $26.49 $28.61 $30.90 $32.45 $34.07 Single Family + ADU (per DU) $23.19 $20.22 $21.84 $23.59 $24.77 $26.01 Multi-Family (per DU) $16.13 $15.75 $17.01 $18.37 $19.29 $20.25 Non-Residential
Up to 1" Meter $37.09 $41.91 $45.26 $48.88 $51.32 $53.89 1 1/2" Meter $71.54 $80.46 $86.90 $93.85 $98.54 $103.47 2" Meter $113.07 $126.72 $136.86 $147.81 $155.20 $162.96 3" Meter $210.02 $234.66 $253.43 $273.70 $287.39 $301.76 4" Meter $348.47 $388.86 $419.97 $453.57 $476.25 $500.06 6" Meter $694.27 $1,044.21 $1,127.75 $1,217.97 $1,278.87 $1,342.81 8" Meter $1,109.42 $1,391.16 $1,502.45 $1,622.65 $1,703.78 $1,788.97 10" Meter $1,593.91 $1,853.76 $2,002.06 $2,162.22 $2,270.33 $2,383.85 12" Meter $2,977.63 $2,605.49 $2,813.93 $3,039.04 $3,190.99 $3,350.54 1 Rate applicable to Riverview HOA for non-potable water under terms of 1997 order of condemnation.

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Packet Pg. 301 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules 1
FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 1 Wages $701,300 $729,300 $758,500 $781,200 $804,700 $828,800 $853,700 $879,300 $905,700 $932,800 $960,800 2 Wages-Overtime $8,500 $8,800 $9,200 $9,500 $9,800 $10,000 $10,300 $10,700 $11,000 $11,300 $11,600 3 Fringe Benefits $243,900 $253,700 $263,800 $271,800 $279,900 $288,300 $297,000 $305,900 $315,000 $324,500 $334,200 4 Fringe Benefits: PERS Employer Share UAL $114,900 $119,500 $124,300 $128,000 $131,800 $135,800 $139,900 $144,000 $148,400 $152,800 $157,400 5 Fringe Benefits: REMIF Workers Comp Ins $33,400 $34,700 $36,100 $37,200 $38,300 $39,400 $40,600 $41,800 $43,100 $44,400 $45,700 6 Personal Protective Equipment $6,600 $6,900 $7,100 $7,400 $7,600 $7,800 $8,000 $8,300 $8,500 $8,800 $9,000 7 Building Maintenance Service Fee $76,700 $79,700 $82,900 $85,400 $88,000 $90,600 $93,300 $96,100 $99,000 $102,000 $105,000 8 Vehicle Service Fee $135,300 $140,700 $146,300 $150,700 $155,200 $159,900 $164,700 $169,600 $174,700 $180,000 $185,400 9 Vehicle Replacement Fee $100,000 $104,000 $108,200 $111,400 $114,700 $118,200 $121,700 $125,400 $129,100 $133,000 $137,000 10 Telecommunication & Data Services $13,000 $13,500 $14,100 $14,500 $14,900 $15,400 $15,800 $16,300 $16,800 $17,300 $17,800 11 Contracted Services $45,000 $46,800 $48,700 $50,100 $51,600 $53,200 $54,800 $56,400 $58,100 $59,900 $61,700 12 Meeting, Travel, and Training-Engineering $1,000 $1,000 $1,100 $1,100 $1,100 $1,200 $1,200 $1,300 $1,300 $1,300 $1,400 13 Meeting, Travel, and Training-Maintenance $4,800 $5,000 $5,200 $5,300 $5,500 $5,700 $5,800 $6,000 $6,200 $6,400 $6,600 14 Repairs and Maintenance $92,000 $95,700 $99,500 $102,500 $105,600 $108,700 $112,000 $115,400 $118,800 $122,400 $126,100 15 License, Dues, Certs, Membrshps $3,400 $3,500 $3,600 $3,700 $3,900 $4,000 $4,100 $4,200 $4,300 $4,500 $4,600 16 Rentals and Leases $5,800 $6,000 $6,300 $6,500 $6,700 $6,900 $7,100 $7,300 $7,500 $7,700 $7,900 17 Land, Bldg, Vehicles and Equipment $76,000 $79,000 $82,200 $84,700 $87,200 $89,800 $92,500 $95,300 $98,200 $101,100 $104,100 18 Office Supplies $2,700 $2,800 $2,900 $3,000 $3,100 $3,200 $3,300 $3,400 $3,500 $3,600 $3,700 19 Noticing $600 $600 $600 $600 $600 $700 $700 $700 $700 $700 $800 20 Operational Expense $78,000 $81,100 $84,400 $86,900 $89,500 $92,200 $95,000 $97,800 $100,700 $103,800 $106,900 21 Wages $1,045,000 $1,086,800 $1,130,300 $1,164,200 $1,199,100 $1,235,100 $1,272,200 $1,310,300 $1,349,600 $1,390,100 $1,431,800 22 Wages-Overtime $30,900 $32,100 $33,400 $34,400 $35,400 $36,500 $37,600 $38,700 $39,900 $41,100 $42,300 23 Wages-Standby/On Call $16,100 $16,700 $17,400 $17,900 $18,400 $19,000 $19,600 $20,100 $20,800 $21,400 $22,000 24 Fringe Benefits $400,500 $416,500 $433,200 $446,200 $459,600 $473,300 $487,500 $502,200 $517,200 $532,700 $548,700 25 Fringe Benefits: PERS Employer Share UAL $155,300 $161,500 $168,000 $173,000 $178,200 $183,500 $189,000 $194,700 $200,600 $206,600 $212,800 26 Fringe Benefits: REMIF Workers Comp Ins $59,800 $62,200 $64,700 $66,600 $68,600 $70,700 $72,800 $75,000 $77,200 $79,500 $81,900 27 Personal Protective Equipment $7,200 $7,500 $7,800 $8,000 $8,300 $8,500 $8,800 $9,000 $9,300 $9,600 $9,900 28 Telecommunication & Data Services $700 $700 $700 $700 $800 $800 $800 $800 $900 $900 $900 29 Utility Services $410,000 $426,400 $443,500 $456,800 $470,500 $484,600 $499,100 $514,100 $529,500 $545,400 $561,800 30 Contracted Services $90,000 $93,600 $97,300 $100,300 $103,300 $106,400 $109,600 $112,800 $116,200 $119,700 $123,300 31 Meeting, Travel, and Training $7,500 $7,800 $8,100 $8,400 $8,600 $8,900 $9,100 $9,400 $9,700 $10,000 $10,300 32 Repairs and Maintenance $7,000 $7,300 $7,600 $7,800 $8,100 $8,300 $8,600 $8,800 $9,100 $9,400 $9,600 33 License, Dues, Certs, Membrshps $10,500 $10,900 $11,400 $11,700 $12,000 $12,400 $12,800 $13,200 $13,600 $14,000 $14,400 34 Rentals and Leases $8,000 $8,300 $8,700 $8,900 $9,200 $9,500 $9,700 $10,000 $10,300 $10,600 $11,000 35 Office Supplies $4,000 $4,200 $4,300 $4,500 $4,600 $4,700 $4,900 $5,000 $5,200 $5,300 $5,500 36 Noticing $1,000 $1,000 $1,100 $1,100 $1,100 $1,200 $1,200 $1,300 $1,300 $1,300 $1,400 37 Government Fees $22,000 $22,900 $23,800 $24,500 $25,200 $26,000 $26,800 $27,600 $28,400 $29,300 $30,100 38 Operational Expense $401,700 $417,700 $434,400 $447,500 $460,900 $474,700 $489,000 $503,600 $518,700 $534,300 $550,300 39 Transfers Out $618,200 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 40 Overhead Allocation $497,300 $596,000 $619,800 $638,400 $657,600 $677,300 $697,600 $718,600 $740,100 $762,300 $785,200 41 Information Services Service Fee $277,100 $288,200 $299,700 $308,700 $318,000 $327,500 $337,400 $347,500 $357,900 $368,600 $379,700 42 Insurance $110,500 $114,900 $119,500 $123,100 $126,800 $130,600 $134,500 $138,500 $142,700 $147,000 $151,400 43 Bank Fees $35,000 $36,400 $37,900 $39,000 $40,200 $41,400 $42,600 $43,900 $45,200 $46,600 $48,000 44 Debt Service $1,954,000 $1,957,000 $1,791,000 $1,795,000 $1,791,000 $1,796,000 $1,795,000 $1,793,000 $1,794,000 $1,796,000 $1,795,000 45 Totals $7,912,200 $7,588,900 $7,648,600 $7,828,200 $8,005,200 $8,196,700 $8,387,700 $8,583,300 $8,788,000 $9,000,000 $9,215,000

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Packet Pg. 302 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 Budgeted Project Driver 1 College Street Sewer and Water Main Replacement condition $634,000 2 Healdsburg Avenue Sewer Replacement condition $1,000,000 3 McDonough Water Transmission Main Replacement condition $30,000 $300,000 4 Brown Street Sewer and Water Replacement condition $88,000 $882,000 5 University Street Sewer and Water Replacement condition $98,000 $882,000 6 Reed Court and Bianca Lane Sewer and Water Replacement condition $0 $91,000 $817,000 7 Corp Yard Force Main - Westside Rd Gravity Sewer - Hendricks Lift Station condition $50,000 $334,000 8 Corporation Yard Vactor Station and Pump Station condition $188,000 $1,250,000 9 Reroof Pump Shop condition $40,000 10 Water Reclamation Facility Membranes and Accessories regulatory compliance $191,000 $197,000 11 WRF Dewatered Biosolids Modifications operational change $200,000 12 Recycled Water System Expansion regulatory compliance $1,900,000 13 Totals: $3,765,000 $703,000 $2,580,000 $1,307,000 $817,000 Budgeted Capital Spending in Out Years: $1,944,000 $1,944,000 $1,944,000 $1,944,000 $2,592,000 $3,240,000 $3,240,000 Deferred Projects Driver
Estimated Cost
(2022 dollars)
14 WRF Biosolids Dewatering Improvements reliability / resilience $1,650,000 $0 $150,000 $1,500,000 $0 15 I&I Reduction Investigation regulatory compliance $300,000 $150,000 $0 $150,000 $0 16 I&I Reduction Improvements/ Condition Based Rehab/Replacement, Basin 1 regulatory compliance $3,000,000 $0 $1,500,000 $0 $1,500,000 17 Grove Street and Vine Street Sewer Trunk Main Replacement capacity $3,575,000 $325,000 $3,250,000 $0 $0 18 University Street Sewer and Water Replacement (North Street to Mason St) condition $935,000 $0 $85,000 $850,000 $0 19 Johnson Street Sewer and Water condition $85,500 $0 $0 $0 $85,500 Totals: $9,545,500

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Packet Pg. 303 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1WASTEWATER OPERATING FUND (5
30) 1 Rate Revenue Increase: 8.0% 8.0% 7.0% 6.0% 6.0% 6.0% 5.0% 6.0% 6.0% 5.0% Revenue 2 Wastewater Rate Revenue $7,004,552 $7,005,000 $7,606,000 $8,259,000 $8,885,000 $9,470,000 $10,094,000 $10,759,000 $11,360,000 $12,109,000 $12,907,000 3 Change due to growth & use $41,000 $45,000 $48,000 $52,000 $56,000 $59,000 $63,000 $67,000 $71,000 $76,000 4 Increase due to rate adjustments $560,000 $608,000 $578,000 $533,000 $568,000 $606,000 $538,000 $682,000 $727,000 $645,000 Non-Rate Revenues 5 Interest Earnings $70,000 $60,000 $42,000 $39,000 $42,000 $45,000 $48,000 $51,000 $54,000 $57,000 $61,000 6 Operating Revenue $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 7 Total Revenue $7,096,552 $7,688,000 $8,323,000 $8,946,000 $9,534,000 $10,161,000 $10,829,000 $11,433,000 $12,185,000 $12,986,000 $13,711,000 O&M Costs 8 Employee Costs $3,357,000 $3,491,000 $3,631,000 $3,740,000 $3,852,000 $3,968,000 $4,087,000 $4,209,000 $4,335,000 $4,465,000 $4,599,000 9 Utilities & Fuel $410,000 $426,000 $443,000 $457,000 $470,000 $485,000 $499,000 $514,000 $530,000 $545,000 $562,000 10 Maintenance & Operations $897,000 $933,000 $971,000 $1,000,000 $1,030,000 $1,061,000 $1,093,000 $1,125,000 $1,159,000 $1,194,000 $1,230,000 11 General Administration $675,000 $781,000 $812,000 $837,000 $862,000 $888,000 $914,000 $942,000 $970,000 $999,000 $1,029,000 12 Total Operating Expenses $5,339,000 $5,631,000 $5,857,000 $6,034,000 $6,214,000 $6,402,000 $6,593,000 $6,790,000 $6,994,000 $7,203,000 $7,420,000 Capital Costs
13 Total Capital Spending $702,000 $2,658,000 $1,400,000 $910,000 $2,231,000 $2,298,000 $2,367,000 $2,438,000 $3,348,000 $4,310,000 $4,439,000 14 Existing Debt Service $1,954,000 $1,957,000 $1,791,000 $1,795,000 $1,791,000 $1,796,000 $1,795,000 $1,793,000 $1,794,000 $1,796,000 $1,795,000 15 Transfer Out $1,054,552 $275,000 $538,000 $961,000 $1,382,000 $1,807,000 $2,275,000 $2,700,000 $3,210,000 $3,787,000 $4,316,000 16 Total Capital Expenses $3,008,552 $2,232,000 $2,329,000 $2,756,000 $3,173,000 $3,603,000 $4,070,000 $4,493,000 $5,004,000 $5,583,000 $6,111,000 Transfers
17 Transfer In from Drainage Capital Fund $26,000 $26,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 18 Transfer In from Fund 930 $300,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 19 Total Revenue Requirement $8,021,552 $7,837,000 $8,186,000 $8,790,000 $9,387,000 $10,005,000 $10,663,000 $11,283,000 $11,998,000 $12,786,000 $13,531,000 20 Beginning Year Balance - 530 $3,002,000 $2,077,000 $1,928,000 $2,065,000 $2,221,000 $2,368,000 $2,524,000 $2,690,000 $2,840,000 $3,027,000 $3,227,000 21 Surplus/(Shortfall) ($925,000) ($149,000) $137,000 $156,000 $147,000 $156,000 $166,000 $150,000 $187,000 $200,000 $180,000 22 End of Year Balance - 530 $2,077,000 $1,928,000 $2,065,000 $2,221,000 $2,368,000 $2,524,000 $2,690,000 $2,840,000 $3,027,000 $3,227,000 $3,407,000 23 Contingency Reserve $1,751,000 $1,902,000 $2,065,000 $2,221,000 $2,368,000 $2,524,000 $2,690,000 $2,840,000 $3,027,000 $3,227,000 $3,407,000 24 Available Cash $326,000 $26,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 Debt Coverage Calculations
25 Revenue Available for Debt Service* $4,295,652 $2,433,200 $2,773,100 $3,205,700 $3,617,500 $4,043,800 $4,513,900 $4,922,900 $5,479,700 $6,072,300 $6,572,800 26 Total Yearly Parity Debt Payment $1,954,000 $1,957,000 $1,791,000 $1,795,000 $1,791,000 $1,796,000 $1,795,000 $1,793,000 $1,794,000 $1,796,000 $1,795,000 27 Debt Coverage Ratio 2.20 1.24 1.55 1.79 2.02 2.25 2.51 2.75 3.05 3.38 3.66 * Includes Development Capacity Charge revenue

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Packet Pg. 304 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 WASTEWATER CAPITAL REPLACEMENT RESERVE (532)
WASTEWATER DEVELOPMENT CAPACITY CHARGE FUND(930) 1 Beginning Balance - 532 $736,000 $1,526,552 $1,617,552 $1,172,552 $1,362,552 $684,552 $359,552 $434,552 $873,552 $929,552 $609,552 Revenues 2 Interest Income $49,000 $31,000 $33,000 $24,000 $27,000 $14,000 $7,000 $9,000 $18,000 $19,000 $12,000 3 Transfer In 1,054,552 275,000 538,000 961,000 1,382,000 1,807,000 2,275,000 2,700,000 3,210,000 3,787,000 4,316,000 4 Total Revenues $1,103,552 $306,000 $571,000 $985,000 $1,409,000 $1,821,000 $2,282,000 $2,709,000 $3,228,000 $3,806,000 $4,328,000 Expenditures 5 Loan $113,000 $113,000 $113,000 $113,000 $113,000 $113,000 $113,000 $113,000 $113,000 $113,000 $113,000 6 Capital Projects $200,000 $102,000 $903,000 $682,000 $1,974,000 $2,033,000 $2,094,000 $2,157,000 $3,059,000 $4,013,000 $4,133,000 7 Ending Balance - 532 $1,526,552 $1,617,552 $1,172,552 $1,362,552 $684,552 $359,552 $434,552 $873,552 $929,552 $609,552 $691,552 1 Beginning Balance - 930 $1,428,000 $2,789,100 $553,300 $330,400 $372,100 $385,600 $392,400 $391,300 $382,200 $363,900 $337,200 Revenues 2 Interest Income $12,100 $56,200 $11,100 $6,700 $7,500 $7,800 $7,900 $7,900 $7,700 $7,300 $6,800 3 Development Capacity Charges $2,151,000 $263,000 $263,000 $263,000 $263,000 $263,000 $263,000 $263,000 $263,000 $263,000 $263,000 4 Total Revenues $2,163,100 $319,200 $274,100 $269,700 $270,500 $270,800 $270,900 $270,900 $270,700 $270,300 $269,800 Expenditures 5 Capacity Charge Funded Capital Projects $502,000 $2,555,000 $497,000 $228,000 $257,000 $264,000 $272,000 $280,000 $289,000 $297,000 $306,000 6 Transfer Out to 530 $300,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 7 Total Expenditures $802,000 $2,555,000 $497,000 $228,000 $257,000 $264,000 $272,000 $280,000 $289,000 $297,000 $306,000 8 Ending Balance - 930 $2,789,100 $553,300 $330,400 $372,100 $385,600 $392,400 $391,300 $382,200 $363,900 $337,200 $301,000

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Packet Pg. 305 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption) City of Healdsburg
2022 Water and Wastewater Rate Study Schedules
1 Current July 1, 2022 July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 Monthly Residential Service Charges
Single Family $37.33 $43.21 $46.67 $49.94 $52.94 $56.12 Single Family + ADU (per DU) $37.33 $29.58 $31.95 $34.19 $36.24 $38.41 Flat Rate1
$99.76 $96.31 $104.01 $111.29 $117.97 $125.05
Multifamily (per DU) $34.50 $35.00 $37.80 $40.45 $42.88 $45.45 Monthly Non-Residential Service Charges (per meter)
Up to 1" meter $60.67 $70.14 $75.75 $81.05 $85.91 $91.06 1 1/2" meter $118.49 $137.49 $148.49 $158.88 $168.41 $178.51 2" meter $188.16 $218.31 $235.77 $252.27 $267.41 $283.45 3" meter $350.82 $406.89 $439.44 $470.20 $498.41 $528.31 4" meter $583.15 $676.29 $730.39 $781.52 $828.41 $878.11 6" meter $1,163.46 $1,821.24 $1,966.94 $2,104.63 $2,230.91 $2,364.76 8" meter $1,860.11 $2,427.39 $2,621.58 $2,805.09 $2,973.40 $3,151.80 10" meter $2,673.10 $3,235.59 $3,494.44 $3,739.05 $3,963.39 $4,201.19 12" meter $4,995.02 $4,548.92 $4,912.83 $5,256.73 $5,572.13 $5,906.46 Wastewater Usage Charges ($/HCF)
All Residential 2$10.41 $10.62 $11.47 $12.27 $13.01 $13.79 Non-Residential 3
Low Strength $9.37 $9.55 $10.31 $11.03 $11.69 $12.39
Medium Strength $13.62 $13.97 $15.09 $16.15 $17.12 $18.15 High Strength $19.85 $20.44 $22.08 $23.63 $25.05 $26.55 1 Applies to customers not receiving water service. 2
Applies to average winter water usage during the proceeding January to April period, with the highest month being omitted. 3 Applies to actual monthly water usage.

Proposed Effective Date

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Packet Pg. 306 Attachment: 2022 Water and Wastewater Rate Study - Final (3672 : Water & Wastewater Rate Adoption)

CITY OF HEALDSBURG
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG DETERMINING THAT THERE WAS NO

MAJORITY PROTEST OF THE PROPOSED WATER AND

WASTEWATER SERVICES RATE INCREASE AND

ADOPTING UPDATED WATER AND WASTEWATER

SERVICES RATES AND SUPERSEDING THE EXISTING
RATES ESTABLISHED BY RESOLUTION NO. 34-2016

RECITALS
WHEREAS, the City of Healdsburg (“City”) operates and maintains potable water and wastewater systems for the benefit of residents and businesses in the City, and also for certain customers outside the boundaries of the City; and
WHEREAS, the City water and wastewater systems are operated as self-supporting utility enterprises; and
WHEREAS, revenue from water and wastewater services rates fund the ongoing operating and capital needs of City water and wastewater systems, including providing for normal facility operations and maintenance, replacement and repair of equipment and facilities, improvements required to meet state and federal regulatory requirements, inflation and other costs; and WHEREAS, the water and wastewater services rates currently applied to City customers were last updated by Resolution No. 34-2016 adopted by City Council on May 2, 2016; and

WHEREAS, Hildebrand Consulting prepared a report entitled “Water and Wastewater Rate Study – Final” (“Rate Study”); and
WHEREAS, the Rate Study presents a five-year financial plan for each utility that reflects financial conditions, as well as obtaining funds to meet the City’s debt service obligations, and capital improvement projects to maintain service with existing service areas during the five-year planning period extending through FY 2026-27; and
WHEREAS, recommendations in the Rate Study concerning water services rates include applying 2 percent, 8 percent, 8 percent, 5 percent and 5 percent overall annual rate increases in the first part of each of the next five fiscal years, and charging certain fixed monthly charges regardless of the amount of water actually used; and
WHEREAS, recommendations in the Rate Study concerning wastewater services rates include an 8 percent, 8 percent, 7 percent, 6 percent and 6 percent overall annual rate increases in the first part of each of the next five fiscal years, respectively, and charging certain fixed monthly charges regardless of the amount of wastewater actually used; and

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Packet Pg. 307 Attachment: Resolution - Water & Wastewater Rates (3672 : Water & Wastewater Rate Adoption) Resolution No. -2022

Page 2 ends

Healdsburg City CouncilJune 21, 2022

Healdsburg City Council
June 21, 2022