Healdsburg City Council
June 5, 2023

WHEREAS, as used herein, the term Mill District DA includes that certain First Administrative Agreement Amendment to Development Agreement and First Administrative Project Amendment dated March 31, 2020, that certain Second Administrative Agreement Amendment to Development Agreement dated December 30, 2020, and that certain Third Amendment Project Amendment to Development Agreement dated April 14, 2022; and WHEREAS, the term of the Mill District DA is for a period of fifteen (15) years commencing on May 1, 2019; and
WHEREAS, on April 21, 2021, pursuant to a Partial Assignment and Assumption of Development Agreement, Replay assigned a portion of its interests under the Mill District DA to Eden Mill District LP (“Eden”); and
WHEREAS, as used herein, Replay and Eden shall be referred to as the “Developer” under the terms of the Mill District DA; and
WHEREAS, on April 6, 2020, the City of Healdsburg (“City”) entered into a Development Agreement (“North Village DA”) with CCS Healdsburg LLC (“Comstock”) as the owner and developer to allow the development of certain real property consisting of 32 acres located in the City of Healdsburg, Sonoma County, and more particularly described in the North Village DA; and
WHEREAS, as used herein, the term North Village DA includes that certain First Amendment to Development Agreement dated June 21, 2022, that certain Second Amendment to Development Agreement dated May 18, 2022, and that certain Third (Administrative Agreement) Amendment to Development Agreement dated December 22, 2022; and WHEREAS, the term of the North Village DA is for a period of ten (10) years commencing on May 6, 2020; and
WHEREAS, on March 17, 2021, pursuant to a Partial Assignment of Rights and Assumption of Obligations Under Development Agreement, Comstock assigned a portion of its interests under the North Village DA to Kendal at Sonoma, A Zen Inspired Community (“Kendal”); and
WHEREAS, as used herein, Comstock and Kendal shall be referred to as the “Developer” under the terms of the North Village DA; and
WHEREAS, Healdsburg Municipal Code section 17.20.050.A and Government Code §65865.1 require the City to review the extent of good faith substantial compliance by each Developer with the terms and conditions each respective Development Agreement, once every 12 months during the term of the Development Agreement; and

6.F.a
Packet Pg. 270 Attachment: ATT 1. Reso-2023 DA Annual Review (4067 : Annual Review of Development Agreements) Resolution No. -2023

WHEREAS, the City initiated its annual review of the Saggio Hills DA, Mill District DA and North Village DA by giving each Developer timely and proper notice of the City's initiation of the review; and
WHEREAS, each Developer has submitted a letter to the City providing information required for the annual review; and
WHEREAS, the City Manager has reviewed each Developer's submission and determined that each Developer has complied in good faith with the terms of its respective Development Agreement; and
WHEREAS, there remains adequate time for each Developer to perform its obligations under the terms of its respective Development Agreement; and WHEREAS, at its regular meeting of June 5, 2023, the City Council provided an opportunity for each Developer and members of the public to be heard regarding the Saggio Hills DA, Mill District DA and North Village DA and considered the facts as described in the staff report that support the finding of compliance made by the City Manager.

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

1. Affirms the City Manager's finding that the Sonoma Luxury Resort, LLC and Oaks & Olives, LLC were in good faith substantial compliance with the terms and conditions of the Development Agreement between the City of Healdsburg, Sonoma Luxury Resort, LLC and Oaks & Olives, LLC for the Saggio Hills project throughout the term of the Saggio Hills DA.

2. Affirms the City Manager's finding that Replay Healdsburg, LLC and Eden Mill District LP are in good faith substantial compliance with the terms and conditions of the Development Agreement between the City of Healdsburg, Replay Healdsburg, LLC and Eden Mill District LP for the Mill District project.

3. Affirms the City Manager's finding that CCS Healdsburg, LLC and Kendal at Sonoma, A Zen Inspired Community are in good faith substantial compliance with the terms and conditions of the Development Agreement between the City of Healdsburg, CCS Healdsburg, LLC, and Kendal at Sonoma, a Zen Inspired Community for the North Village project.

4. Finds that this review satisfies the annual review of the above-referenced development agreements as required by Healdsburg Municipal Code section 17.20.050.A and Government Code section 65865.1.

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Packet Pg. 271 Attachment: ATT 1. Reso-2023 DA Annual Review (4067 : Annual Review of Development Agreements) Resolution No. -2023

PASSED, APPROVED, AND ADOPTED this 5th day of June 2023 by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
__________________________________ ___________________________________ Ariel Kelley, Mayor Raina Allan, City Clerk

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Packet Pg. 272 Attachment: ATT 1. Reso-2023 DA Annual Review (4067 : Annual Review of Development Agreements) Sonoma Luxury Resort, LLC
1389 Center Drive, Suite 105
Park City, Utah 84098
April 13, 2023
Mr. Scott Duiven
Community Development Director
401 Grove Street
Healdsburg, CA 95448
RE:  Annual Review of Saggio Hills Development Agreement Dear Scott:

In response to your March 22nd letter, the following is an update regarding the project’s status confirming our compliance with the 3rd Amendment to the Development Agreement.

Parcel 10‐ Fire Station Activities:  Pursuant to the 3rd Amendment to the Development Agreement, SLR was required to provide mass grading to this site and fund the “Developer Fire Station Contribution” in the amount of $1,599,586.  Parcel 10 improvements were accepted by the City of Healdsburg and this parcel 10 was transferred to the City in January 2023.

Parcel 8‐ Public Park Land Mass Grading & Conveyance:  Pursuant to the 3rd Amendment to the Development Agreement, SLR is obligated to complete the mass grading activities for parcel 8.

This mass grading work commenced in the summer of 2021 and was substantially completed in December 2021.  Carlile Macy provided the City with a grading certification letter and City Staff accepted the Work. SLR is also obligated to pay to City balance of Public Park Contribution in the amount of $2,710,000.  SLR anticipates funding this contribution in April 2023.  SLR, Oaks & Olives and the City finalizing a Fourth Insubstantial Amendment to the Development Agreement effectuating lot line grant deeds for resultant parcels 7 & 8.  The parties intend to have fully executed agreements to allow Parcel 8 to be transferred to the City in April 2023.

Northwest Trail‐ Pursuant to the 3rd Amendment to the Development Agreement, SRL is obligated to complete the Northwest Trail improvements.  This Work was substantially completed in December 2021.  The Northwest Trail Easements for Parcels 1 & 3 were recorded in January 2023.  The City Council accepted of the Northwest Trail during the February 6th meeting.  SLR put in place a maintenance bond to the City for the Northwest Trail improvements.

Affordable Housing – Mass Grading, Infrastructure & Conveyance‐ During the summer of 2021, SLR completed the mass grading for the affordable housing parcels 5 & 6, this work was substantially completed in December 2021.  The City accepted the Work in 2022 and reimbursed SLR for infrastructure expenses per the Development Agreement.  Parcels 5 & 6 were transferred to the City of Healdsburg on February 22, 2023.

Payment in Lieu Fees‐ SLR and the City reached an agreement on the payment in lieu fees for the Multi Use Trail, Creek Restoration, Parkland Farms Sidewalk and the deferred improvements

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Packet Pg. 273 Attachment: ATT 2. SLR-2023 DA Review response (4067 : Annual Review of Development Agreements) Sonoma Luxury Resort, LLC

on the Passalacqua Road extension.  The amount of the payment in lieu of fees from SLR to the City is $5,177,374.   The final disbursements for all the payment in lieu fees from SLR to the City is anticipated April 2023.

Sincerely,
David Zimmerman
David Zimmerman
President, Development
Cc:    Linda Ruffing
Jim Fain

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Packet Pg. 274 Attachment: ATT 2. SLR-2023 DA Review response (4067 : Annual Review of Development Agreements)

6.F.c
Packet Pg. 275 Attachment: ATT 3. Oaks&Olives-2023 DA Review response (4067 : Annual Review of Development Agreements)

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Packet Pg. 276 Attachment: ATT 3. Oaks&Olives-2023 DA Review response (4067 : Annual Review of Development Agreements) 631 Center Street, Healdsburg CA 95448
707.314.0087
milldistricthealdsburg.com
[email protected]
April 14, 2023
Scott Duiven
Community Development Director
City of Healdsburg
401 Grove Street, Healdsburg CA 95448
Dear Director Duiven,
RE: Annual Review of Mill District Development Agreement Section 7.5 of the Development Agreement between the City of Healdsburg and Replay Healdsburg, LLC (“Agreement”) stipulates the requirement of an annual review of the Agreement. The following information below pertains to the reporting year between March 12, 2022 and March 11, 2023. The following information is required to be reported:

1. An accounting of the fees due and paid to City
 Since March 2022, the total amount of fees paid to the City is $1,373,349.20, consisting of the following breakdown:
o City Staff and Contract Staff $91,848.25
o City Legal $46,441.50
o Application Fees $9,589.15
o Fire Truck Payment $348,333.33
o Lot 4 Impact Fees $597,437.92
o Lot 4 City Staff and Contract Staff $114,381.10
o Lot 4 Building Permit Fees $165,317.95

2. Any assignments or transfers of the Property
 Lot 4 was transferred to Canopy Healdsburg, LLC on April 18, 2022.

3. All construction of public improvements under this Agreement  Most of the public improvement construction is completed. Remaining work includes completion of the joint trench which is being sequenced with construction on Lot 4.

Replay is working with City Staff on turning over phases of the public improvements to the City which include 1) Healdsburg Avenue; 2) Portions of South Street and Sawmill Circle so that Eden Housing can obtain their certificate of occupancy; and 3) All remaining components of the public improvements upon completion of Lot 4.  Construction of the affordable housing development on Lot 7 advanced significantly during 2022, and is nearing completion as of this writing, providing all of the affordable housing requirements under the Development Agreement.
 Construction of Lot 4 commenced in April 2022, and is well under way.

6.F.d
Packet Pg. 277 Attachment: ATT 4. Replay-2023 DA Review response (4067 : Annual Review of Development Agreements) 631 Center Street, Healdsburg CA 95448
707.314.0087
milldistricthealdsburg.com
[email protected]

4. Description of any subsequent project approvals that have been applied for or approved  Lot 1 Amenities – A Planning Commission Workshop for the Lot 1 Amenities was held on December 7, 2021
 Lot 5 Park – A Parks and Recreation Committee hearing was held on December 13, 2022, and a Major Design Review hearing was held on February 14th, 2023 during which the design of the park was approved
 Lot 4 Residential Phased Building Permit – the final permit of the three-phased building permit was issued in November 2022

5. Description of any construction activity that has been commenced or completed during the applicable annual review period
 Public Improvements – As indicated above, most of the construction is complete with remaining work being the joint trench.
 Lot 4 (43 residential units) commenced construction in April 2022

6. Description of compliance with Section 5.1 through 5.4 of the Agreement Section 5.1: Affordable Housing Units
 See above.

Section 5.2: Middle Income Units
 Replay has not submitted major design review applications for any parcel that contains Middle Income Units
Section 5.3: Public Improvements
 See above.

Section 5.4: Additional Developer Contributions
 Section 5.4(a) – This is no longer applicable.
 Section 5.4(b) – At the time of this letter, Replay has been notified that a consultant has been selected for the Connectivity Funds projects and payment of the first phase of connectivity funds is in processing
 Section 5.4(c) – At the time of this letter, Replay is in receipt of the invoice for its portion of the second financing installment of $348,333.33 for the aerial fire truck and payment is in processing

6.F.d
Packet Pg. 278 Attachment: ATT 4. Replay-2023 DA Review response (4067 : Annual Review of Development Agreements) 631 Center Street, Healdsburg CA 95448
707.314.0087
milldistricthealdsburg.com
[email protected]
 Section 5.4(d) – The lighting and landscape district has and will continue to be a part of the phased public infrastructure turn over discussion with City staff

7. Description of any enforced delay or permitted delay as provided for under Section 7.6 of the Agreement
 There have not been any enforced delays or permitted delays as provided for under section

7.6 of the Agreement
Sincerely,
David Hill
Managing Director
CC: Jeff Kay, City Manager
Scott Duiven, Community Development Director
Linda Ruffing, North Coast Community Planning

6.F.d
Packet Pg. 279 Attachment: ATT 4. Replay-2023 DA Review response (4067 : Annual Review of Development Agreements) 22645 Grand Street | Hayward, CA 94541 | Tel: 510-582-1460 | edenhousing.org Broker License No. 872400
April 21, 2023
Scott Duiven
Community Development Director
City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Re: Annual Review of Mill District Development Agreement Dear Director Duiven,
The Partial Assignment and Assumption of the Development Agreement and Estoppel Agreement between the City of Healdsburg, Replay Healdsburg, LLC and Eden Mill District, LP, and Section 7.5 of the Development Agreement between the City of Healdsburg and Replay Healdsburg, LLC (“Agreement”) stipulate the requirement of an annual review of the Agreement. The following information below pertains to the reporting year between March 11, 2022 and March 31, 2023.

The following information is required to be reported:

An accounting of the fees due and paid to City
Since March 2022, the total amount of fees paid to the City is $711,777.31 consisting of the following breakdown:

City Impact Permit Fees $711,777.31
Any assignments or transfers of the Property
Lot 7 was transferred to Eden Housing in April 2021.

All construction of public improvements under this Agreement Not Applicable
Description of any subsequent project approvals that have been applied for or approved Not Applicable
Description of any construction activity that has been commenced or completed during the applicable annual review period
Lot 7 (41 units of affordable housing) – Construction commenced April 29, 2021.

6.F.e
Packet Pg. 280 Attachment: ATT 5. Eden-2023 DA Review response (4067 : Annual Review of Development Agreements)

6. Description of compliance with Section 5.1 through 5.4 of the Agreement a. Not applicable per Section 3. Allocation of Rights and Obligations (a)(ii) of the Partial Assignment and Assumption of Development Agreement and Estoppel Agreement.

Please contact Kevin Leichner, Vice President, with any questions at 510-247-8100 or [email protected]. Sincerely,
Kevin Leichner
Vice President of Development, Housing Finance, and Acquisitions

6.F.e
Packet Pg. 281 Attachment: ATT 5. Eden-2023 DA Review response (4067 : Annual Review of Development Agreements)

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Packet Pg. 282 Attachment: ATT 5. Eden-2023 DA Review response (4067 : Annual Review of Development Agreements) CCS Healdsburg, LLC
3760 Kilroy Way, Ste 130
Long Beach, CA 90806
310.546-5781
[email protected]
[Website]
April 3, 2023
Scott Duiven
Community Development Director
City of Healdsburg
401 Grove Street
Healdsburg, CA 95448-4723
Dear Mr. Duiven,
RE: Annual Review of North Village Development Agreement Section 7.5 of the Development Agreement between the City of Healdsburg and CCS Healdsburg, LLC (“Agreement”) stipulates the requirement of an annual review of the Agreement. The following information below pertains to the reporting year between February 11, 2022 and February10, 2023.

The following information is required to be reported:

1. An accounting of the fees due and paid to the City
Since February 11, 2022, the total amount of fees paid to the City is $ 68,513.45 consisting of the following breakdown:
• Permit Fees and Plan Check Fees: $5,500 (Fire Substation Plan check) • Contract Planner, staff and City Legal: $63,013.45

2. Assignments or transfers of the Property
• Parcel 4 Portion 2 (3.01 Acres) was transferred to Burbank Housing Development Corporation on February 01, 2023, for the purpose of developing 53 affordable apartments and approximately 12,000 SF of Local Serving Retail Space.
• Partial Assignment and Assumption Agreement of the Development Agreement has been executed between CCS Healdsburg and Burbank Housing Development Corporation, subject to final approval by the City. The DA Assignment shall be recorded in the Official Records.

NORTH

VILLAGE

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Packet Pg. 283 Attachment: ATT 6. Comstock-2023 DA Review response (4067 : Annual Review of Development Agreements)

3. All Construction of public improvements under this Agreement • A Subdivision Improvement Agreement was issued on July 14th, 2021. Major public improvements along Healdsburg Avenue, and the traffic signal at the project entry are under construction.

4. Description of any subsequent project approvals that have been applied for or approved • Major Design Review/CUP for Parcel 3 & 4 was approved by the Planning Commission on May 25, 2022.
• Amendment to Design Review for Parcel 4 has been applied for by Burbank Housing Development Corporation to allow minor design modifications to allow for development of 53 affordable apartment units. Application has been conditionally approved by Planning Commission.
• A Tentative Condo Map has been applied for to allow transfer of condominium airspace and land use to BHDC and retention by CCS Healdsburg, LLC for development of retail spaces. • Owner has submitted applications for tentative map and major design review for Parcel 2 to develop 27 Category “C” townhomes with 2 car attached garages.

5. Description of any construction activity that has been commenced or completed during the applicable annual review period
• Vertical construction for Parcel 1 Kendal at Sonoma continues with site work, interior and exterior finishes.
• Early grading and utilities were completed installing parking lots and underground utilities for parcels 3 and 4.
• Building pads on Parcel 3 were lime treated for winter protection.

6. Amendments to Agreement
• A request for Amendment #2 assigning obligations to construct Fire Substation to City of Healdsburg was approved by City Council on April 18, 2022. • A request for Amendment #3 to address timing associated with the completion of the Affordable Housing Agreement, was approved by City Council on December 22, 2022. • A request for Amendment #4 to address minor changes to affordability levels for workforce housing, is being considered by City Council on April 17, 2023.

Respectfully Submitted,
Debra Geiler
VP Forward Planning and Entitlements
Cc: Jeff Kay, City Manager
Linda Ruffing, Planning Consultant
Robert Miller, Lubin Olson & Niewiadomski LLP

6.F.f
Packet Pg. 284 Attachment: ATT 6. Comstock-2023 DA Review response (4067 : Annual Review of Development Agreements)

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4886-1954-6717.1
April 18, 2023
Scott Duiven
Community Development Director
City of Healdsburg
Community Development Department
401 Grove Street
Healdsburg, CA 95448-4723
Re: Annual Review of North Village Development AgreementKendal at Sonoma Dear Mr. Duiven:

On behalf of Kendal at Sonoma, A Zen Inspired Community, a California nonprofit public benefit corporation (“Kendal”), we provide the following response to your request for information in connection with an annual review of the North Village Development Agreement (the “Agreement”), dated March 17, 2021, by and between the City of Healdsburg and CCS Healdsburg, LLC (“Developer”), partially assigned to Kendal pursuant to a Partial Assignment of Rights and Assumption of Obligations under Development Agreement (the “Assignment”), recorded as Sonoma County Document 2020071885.

Pursuant to the Assignment, Kendal was assigned and assumed certain rights and obligations under the Agreement. Specifically, Kendal assumed responsibility for four conditions of the Agreement:
§4.2 Impact Fees
§5.4 Senior Living Community Affordable Housing
§5.5(d) Housing Guaranty
§5.8 Payment in Lieu of Taxes (PILOT) Agreement
§4.2 Impact Fees
The Agreement and Assignment requires Kendal, as assignee of the Developer, to “pay all applicable impact fees imposed pursuant to the Mitigation Fee Act ... that are in force and effect on a City-wide basis... when such Impact Fees are due in connection with the issuance of building permits or site improvement permits for components of the Project.”

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Packet Pg. 285 Attachment: ATT 7. Kendal-2023 DA Review response (4067 : Annual Review of Development Agreements) April 18, 2023

4886-1954-6717.1
Kendal was billed and has paid impact fees in the amount of $4,370,384.20 pursuant to the City’s Invoice # INV-00015718, dated August 27, 2021. The above constitutes all impact fees billed by the City to date.
§5.4 Senior Living Community Affordable Housing
The Agreement and Assignment requires Kendal, as assignee of Developer, to construct 30 units of “Senior Living Community Affordable Housing... twenty [of which] shall be...

Very Low Income... and ten [of which] shall be... Moderate Income.” In addition, Developer is required to enter into a Senior Living Community Affordable Housing Agreement with the City.

Developer and City have entered into an “Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants,” dated June 3, 2020, and recorded as Sonoma County Document 2020049787, which by its terms is intended to serve as the Senior Living Community Affordable Housing Agreement required under the terms of the Development Agreement (the “Affordable Housing Agreement”).

On April 4, 2022, the City Council of the City of Healdsburg, by a vote of 4 to zero, with one absence, approved an Ordinance of the City Council of the City of Healdsburg Approving a First Amendment to the Development Agreement by and between the City of Healdsburg and Kendal at Sonoma, a Zen Inspired Community for the Enso Village Project (DA 2020-01.01), which amended the requirements of the Affordable Housing Agreement to increase the required number of Moderate Income units from 10 to 15, to require 5 Low Income units and to reduce the number of Very Low Income units from 20 to 10.

Kendal has commenced construction of its Senior Living Community facility including the 30 units of Senior Living Community Affordable Housing, but none of such units are now ready or available for occupancy. However, Kendal has received entrance fee deposits from qualifying residents on 10 of the 15 Moderate Income units, and it has made arrangements for tenancy from qualifying residents on all 5 of the Low Income Units and all 10 of the Very Low Income units.
§5.5(d) Housing Guaranty and Satisfaction of Obligations The Agreement and Assignment requires Kendal to identify and designate the Senior Living Community units before issuance of final certificates of occupancy for the Senior Living Community.

No certificates of occupancy have issued.

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Packet Pg. 286 Attachment: ATT 7. Kendal-2023 DA Review response (4067 : Annual Review of Development Agreements) April 18, 2023

4886-1954-6717.1
§5.8 PILOT Agreement
The Agreement and Assignment requires Kendal, as assignee of Developer, to enter into and record a Payment-in-lieu of Taxes (PILOT) Agreement within thirty (30) days of issuance of the first building permit for the Senior Living Community facility.

Kendal and the City have entered into an Agreement for Payment In Lieu of Taxes, dated June 19, 2021, and recorded as Sonoma County Document 2021077992.

Please let us know if you require any additions to, or have any questions regarding, the above information. Thank you.

Very truly yours,
Mark T. Schieble
MTSC:
cc: Jeff Kay, City Manager (via email)
Linda Ruffing, Planning Consultant (via email)
Steve Bailey, Kendal
Susan O’Connell, Kendal
Bob Miller, Lubin Olson (via email)

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Packet Pg. 287 Attachment: ATT 7. Kendal-2023 DA Review response (4067 : Annual Review of Development Agreements)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 5, 2023
SUBJECT: Revisions to the Healdsburg Municipal Code, Title 17, Property Development and Title 20, Land Use Code
PREPARED BY: Ellen McDowell, Senior Planner
STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Conduct a public hearing and, by motion, introduce for first reading, by title only, an ordinance amending Healdsburg Municipal Code Title 17, Property Development and Title 20 Land Use Code, and related CEQA Exemption.

COMMUNITY ENGAGEMENT/OUTREACH:

A public hearing notice was published in the Press Democrat and posted at City Hall.

BACKGROUND:

The purpose of this report is to provide background information to the City Council regarding various amendments to the Healdsburg Municipal Code in order to support the City Council in making the required findings for adoption. The proposed amendments are aimed at streamlining development review, addressing changes in State law, and correcting minor errors and omissions in the code.

On April 11, 2023, the Planning Commission conducted a public hearing and considered the Municipal Code Amendments. Commissioners were generally supportive of the proposed revisions and adopted Resolution No. 2023-14 (Attachment 2) recommending approval of the ordinance.

DISCUSSION/ANALYSIS:

Overview of Land Use Code Amendments
The draft ordinance (Attachment 1) makes several amendments to the City’s Municipal Code Title 17 and Title 20 to clarify various sections of the Property Development and Land Use Code Sections. To support the ongoing development and implementation of the City’s Municipal Code, staff recommend implementing the proposed changes to the sections identified in the

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Packet Pg. 288
attached ordinance. Analysis for each amendment identified within the ordinance can be found below.

Title 17, Property Development, Section 17.08.190 (Off-site easements and rights-of-way):

This section has been revised to allow the City Manager, or designee, to administratively accept public right of way dedications or grants of public easements required as part of privately funded development projects. Currently, all dedications of public right-of-way or public easements must first be approved via resolution by the Healdsburg City Council authorizing the City Manager to accept. This code revision will streamline the city’s process by removing the requirement for City Council approval prior to City Manager acceptance.

Title 17, Property Development, Section 17.08.070 (Acceptance date):

This section has been revised to allow the City Engineer to sign off on up to 80% of certificate of occupancies issued by the Building Official for a development prior to acceptance of subdivision and/or public improvements. The addition of this code language ensures the city is able to ensure all required subdivision and/or public improvements have been constructed, inspected, tested, and are operating per applicable city design and construction standards prior to full occupancy of the development project.

Title 17, Property Development, Section 17.08.330 (Improvements required for certain dwellings):

This section has been revised to clarify when frontage improvements, except what is required as part of the Healdsburg sewer lateral ordinance, such as curb, gutter, sidewalk, streetlights, etc. are exempted and required with development applications, as follows:

1. Expansions to the floor area of existing non-residential structures of twenty-five percent or less of the structure. Expansions shall be considered cumulatively from the effective date of the ordinance.

2. Permits for accessory structures such as gazebos, pools, decks, awnings, patio covers and similar non-inhabitable accessory structures. Additionally, guesthouses, room additions, conversions, and similar habitable residential structures, where a primary structure exists, are exempt from this chapter.

3. Development of one accessory dwelling unit, where a primary residential structure exists.

4. All development projects not meeting any of the above exemptions are required to construct full frontage improvements.

5. For any development with a project valuation of $25,000 or more, the property owner shall remove and replace all portions of broken, displaced, cracked, etc. sidewalk, curb, gutter, driveway approach, and pedestrian ramps along the project street frontage(s), ½- inch or greater, per city design and construction standards.

Title 17, Property Development, add Section 17.04.305 (Approval of final parcel maps):

This section has been added to allow the City Engineer to administratively approve, conditionally approve or disapprove final parcel maps (four lots or fewer). This code section addition also allows the City Manager, or designee, to administratively accept or reject dedications of public right of way and public easements within the boundary of the subdivision for final parcel maps when made by a statement on the map. Currently, final parcel maps and dedications of public right of way and public easements on a final parcel map must be approved

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via resolution of the Healdsburg City Council. This code revision will streamline the city’s process by removing the requirement for City Council approval of final parcel maps, including parcel maps submitted under state senate bill 9, which requires that any senate bill 9 parcel map to be approved administratively by the local agency. Tentative parcel maps (four lots or fewer) still require approval by the Healdsburg Planning Commission, unless exempted by state senate bill 9. Tentative maps (five lots or more) still require a recommendation of approval by the Healdsburg Planning Commission and approval by the Healdsburg City Council. Final Maps (five lots or more) still require approval by the Healdsburg City Council.

Title 20 Land Use Code, Section 20.28.130 (Effective date and term of approval):

This section has been revised to allow 24 months for design review approvals and one 12-month extension approved by the director or Planning Commission. Staff have found a need to provide greater flexibility with approval timelines. Through research, 24 months initial approval is consistent with surrounding jurisdictions.

Title 20 Land Use Code, Section 20.08.100, Table 8 (Permitted and conditionally permitted uses ORM and MP districts):

This section has been revised to amend a typographical error. The section should reference Article III (Multi-Family Residential, RM District) rather than Article IV (Downtown Residential (DR) District).

This section has been amended to include a land use designation for a Library and Museum to provide consistency with the special purposes of the ORM District in Chapter 20.08.190 (D) which reads that the ORM District should provide space for quasi-public facilities and institutions that appropriately may be located in the ORM District. Library and Museum would be a conditionally permitted use in the ORM District.

Title 20 Land Use Code, Section 20.08.050, Table 4 (Permitted and Conditionally Permitted Uses: RM district):

This section has been updated to allow Large Family Daycare as a permitted use in the RM zoning district. In 2019, SB234 went into effect and intends to streamline the administration of Large Family Daycares and require that they be administered the same as a Small Family Daycare. Large Family Daycares have been updated to reflect large family daycare as permitted pursuant to State law SB234.

Title 20 Land Use Code, Section 20.08.070, Table 6 (Permitted and Conditionally Permitted Uses: DR district):

This section has been updated to allow Large Family Daycares as a permitted use pursuant to SB234 which requires Cities to allow large family daycares as a permitted use in residential zones.

This section has been revised to amend a typographical error that incorrectly allowed multifamily residential as a conditionally permitted use in the DR district. Council Ordinance 1104, approved on December 6, 2010, allows multi-family residential as a permitted use.

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Title 20 Land Use Code, Section 20.08.150, Table 11 (Permitted and Conditionally Permitted Uses: GMU District):

This section has been updated to allow Large Family Daycares as a permitted use pursuant to SB234 which requires Cities to allow large family daycares as a permitted use in residential zones and add HMC 20.20.055 under the specific use regulations.

Title 20, Land Use Code, Section 20.08.145, Table 10 (Permitted and Conditionally Permitted Uses in the PR, CD and CS Districts):

This section shall be amended to remove amplified music as a stand-alone use. The table shall be amended to include amplified sound within the Restaurant, café and eating establishment category, and continue to require a Conditional Use Permit.

Title 20 Land Use Code, Section 20.28.310 (Definitions):

The definitions section shall be updated to amend a typographical error and include definitions for Amplified Sound, and Libraries and Museums to be consistent with updates.

Title 20 Land Use Code Section 20.16.045, Maximum height of fences and walls:

This section shall be amended to revise section 20.16.045(3) to allow 6 feet plus 2 feet of additional 50% open lattice.

Title 20 Land Use Code, Section 20.16.055, Fence, walls and hedges exceeding allowed height:

This section shall be amended to add subsection B to require a Building Permit for all fences exceeding 7 feet in height in accordance with the California Building Code.

Title 20 Land Use Code, Section 20.20.055, Large family day care center:

This section has been eliminated from the Land Use Code as the City can no longer require use permits, business licenses and other permits or fees for large family day cares pursuant to SB234.

In 2019, SB234 went into effect with the intent to streamline the administration of Large Family Daycares and require that they be administered the same as a Small Family Daycare. Large Family Daycares have been updated throughout the code to reflect large family daycare as a permitted use in residential zones pursuant to SB234.

Title 20 Land Use Code, Section 20.20.110, Temporary Use Permit:

This section has been added to the Land Use Code to establish standards for the granting of Temporary Use Permits for certain nonrecurring, specific duration activities not otherwise permitted by the Land Use Code. A Temporary Use Permit would allow for the temporary utilization of a privately owned property for a special, unique or limited duration use that may not comply with the normal development or use standards of the applicable zoning district.

Title 20, Land Use Code, Section 20.28.075, Reviewing entities:

This section has been amended to include Temporary Use Permits – Major, and Temporary Use Permits – Minor, to be consistent with added Land Use Code section 20.20.110 and determine the reviewing entities for each permit type.

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This section has been amended to further clarify the final decision-making body.

Title 20, Land Use Code, Section 20.28.080, Public Notice requirements:

This section has been amended to include Temporary Use Permits in Table 23 (Notification requirements) to provide a standard for public noticing for the added Land Use Code section

20.20.110.

Planning Commission Review
The Planning Commission conducted a public hearing and considered the Healdsburg Municipal Code Amendments on April 11, 2023. Commissioners were generally supportive of the proposed revisions and adopted Resolution No. 2023-14. The commission specifically suggested that the Council consider increasing the valuation threshold for frontage improvements to a number higher than the staff proposed $25,000. Staff continues to recommend the current valuation threshold for applicable development projects be increased from its current dollar amount of $2,000 to $25,000 for the following reasons:

1. There will likely be development projects, such as minor additions to existing buildings, in which the proposed construction valuation will exceed $25,000 but be less than $50,000, or higher dollar amounts. In these instances, where minor frontage improvement work such as displaced or missing sidewalk sections is necessary, staff does not want to preclude the ability to require applicants of development projects to correct these types of minor, but important frontage improvements for public safety purposes.

2. The valuation for development projects requiring compliance with the city’s sewer lateral ordinance is also set at $25,000. Changing the valuation threshold for requiring frontage improvements to $25,000 would be consistent with the sewer lateral ordinance.

APPLICABLE GENERAL PLAN AND LAND USE CODE INFORMATION:

General Plan Consistency
The Municipal Code Amendments are consistent with the General Plan Guiding Principle to Support local businesses and industries, while recognizing that there are limits on how the General Plan can impact a free market economic system, the City will support locally-owned businesses and industries that will keep wages and profits in the community and contribute to the local identity.

ENVIRONMENTAL STEWARDSHIP:

Not applicable.

ALTERNATIVES:

After public comment and deliberation, the City Council may consider alternatives to address any issues raised and propose revisions to the ordinance.

FISCAL IMPACT:

The recommended action related to Healdsburg Municipal Code amendments will not result in a direct fiscal impact to the City.

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ENVIRONMENTAL ANALYSIS:

The proposed amendments to the Municipal Code are exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3) in that the proposed amendments will not allow for or encourage any more development than is already anticipated under the City’s existing General Plan, or otherwise allow for or promote physical changes in the environment and, therefore, it can be seen with certainty that there is no possibility that the proposed amendments may have a significant effect on the environment.

ATTACHMENT(S):

Att 1 CC Ordinance with Redlines
Att 2 Planning Commission Resolution 2023-14

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CITY OF HEALDSBURG
ORDINANCE NO. ____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG MAKING CLARIFYING UPDATES TO THE HEALDSBURG
MUNICIPAL CODE BY AMENDING TITLE 17, PROPERTY AND
DEVELOPMENT SECTIONS 17.08.190, 17.08.070, 17.08.330, AND ADDING SECTION 17.04.305; AND AMENDING TITLE 20, LAND USE CODE, SECTIONS 20.28.130, 20.08.100 TABLE 8, 20.08.050 TABLE 4, 20.08.070 TABLE 6, 20.08.150 TABLE 11, 20.08.145 TABLE 10, 20.08.310, 20.16.045,

20.16.055, 20.20.055, 20.08.075, 20.28.080 AND ADDING SECTION 20.20.110 WHEREAS, the City of Healdsburg Municipal Code (“HMC”) Chapter 17 Property Development regulates property development standards within the City; and WHEREAS, the City of Healdsburg Municipal Code (HMC) Chapter 20 Land Use Code (LUC) regulates allowable and development standards within the City; and WHEREAS, HMC amendments (“Amendments”) are proposed to provide greater clarity to Title 17, Property and Development, and Title 20, Land Use Code, all as provided herein; and WHEREAS, the Planning Commission held a duly noticed public hearing on April 11, 2023, at which time it reviewed the proposed Amendments and considered all public comments, written and oral, on the revisions and the related CEQA exemption; and WHEREAS, the Planning Commission made the following affirmative findings pursuant to HMC Section 20.28.280 in support of the proposed Amendments and recommended the City Council adopt an ordinance approving them:

A. The Amendments are consistent with the Healdsburg 2030 General Plan including the goals, and policies, in that no conflicts with any Goals, Policies, Programs or measures of the Healdsburg General Plan 2030 have been identified.

B. The Amendments are consistent with the objectives of the Land Use Code contained in Section 20.04.010 given that: a) adoption of the proposed Amendments will continue to protect and promote the public health, safety and general welfare of the community by providing updated standards; and b) the Amendments will implement the goals, policies, and programs contained in the Healdsburg 2030 General Plan.

C. The Planning Commission conducted a public hearing on the draft Amendments with hearing notices provided as prescribed in Land Use Code Section 20.28.080, including newspaper publication at least 10 days prior to the hearing date.

D. The Amendments are exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines (the “common sense exemption”) because it can be seen with

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certainty that there is no possibility that the Amendments will have a significant effect on the environment. The proposed Amendments are clarifying changes to the Municipal Code and will not allow for, nor encourage, any more development than is already anticipated under the City’s General Plan, or otherwise allow for or promote physical changes in the environment and, therefore, there is not a possibility that the proposed Amendments may have a significant effect on the environment.

In addition, the proposed Amendments are exempt from CEQA pursuant to Section 15304 of the CEQA Guidelines (“minor alterations to land”) because any new uses permitted by the Amendments, such as temporary use permits, are temporary in nature having negligible or no permanent effects on the environment, and will not involve the removal of any healthy, mature scenic trees as required by the statute.

Moreover, none of the CEQA exceptions apply. The Amendments will not impact any environmental resources of hazardous or critical concern. The Amendments are primarily procedural in nature, and any new uses are minor and temporary, with no impacts to critical resources. The Amendments will also not contribute to cumulative impacts or have a significant effect due to unusual circumstances. The Amendments make clarifying procedural changes to the municipal code, and any new uses such as temporary use permits are minor and transient in nature and would not arise to the level of an unusual circumstance or contribute to cumulative impacts. Lastly, the Amendments will not impact scenic highways, will not involve hazardous waste sites, and will not impact historical resources. Any new uses would be minor and temporary and cannot not be approved if there are environmental impacts to sensitive species, wetlands, or adjacent uses, buildings, or other structures.

WHEREAS, based upon the Planning Commission’s findings and recommendation, the City Council finds that the Amendments are consistent with the General Plan including the Goals, Policies, and Implementation Measures of the Housing, Land Use, and Economic Development Elements of the adopted General Plan, and that the Amendments are internally consistent with all other provisions of the Municipal Code.

NOW, THEREFORE, the City Council of the City of Healdsburg does ordain as follows:

Section 1. Findings.

The above recitals are hereby declared to be true and correct findings of the City Council of the City of Healdsburg.

Section 2. Title 17, Section 17.08.190 Off-site easements and rights-of-way shall be amended to read as follows (additions underlined, deletions strikethrough):

Where acquisition of an easement or right-of-way by the City is necessary to extend public facilities to the developer’s property, the developer shall advance all of the cost of acquisition;

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provided, however, the City may advance a portion of the cost of acquiring the easement or rightof-way if the City deems the acquisition of the same is sufficiently beneficial to the permanent City system. The costs advanced by the developer may be reimbursable in accordance with HMC 17.08.120 through 17.08.160 unless otherwise provided in the development agreement. The City Manager, or designee, is authorized to and may accept any dedications of easements and rights of way donated to the City of Healdsburg or as required as part of a private development.

Section 3. Title 17, Section 17.08.070 Acceptance date shall be amended to read as follows (additions underlined, deletions strikethrough):

All utilities and public service facilities which may be the subject of the development agreement specified in HMC 17.08.050 will be accepted for maintenance and operation by the City not later than 30 days after acceptance by the City Council, providing that all conditions of such agreements are fulfilled. The repair and correction of any defects or deficiencies due to workmanship or materials which are discovered within one year from the date of acceptance by the City shall be the responsibility of the developer. Security, in an amount specified in the agreement, shall be deposited with the City for the purpose of guaranteeing that such repairs and corrections will be made upon notification to the developer of such deficiencies.

The City Engineer may permit occupancy of a portion of a subdivision or other development project not to exceed 80% of the total number of units in a subdivision or other development project if the improvements serving the units to be occupied are substantially complete, upon such terms and conditions as the City Engineer shall designate, including at a minimum, all project requirements, engineering and construction standard specifications and details, and subsections AF of Healdsburg Municipal Code section 17.04.510.

Section 4. Title 17, Section 17.08.330 Improvements required for certain dwellings shall be amended to read as follows (additions underlined, deletions strikethrough):

A. No building permit shall be issued for the construction of homes and other structures intended for human occupancy of a value of $2,000 $25,000 or more, unless provision is made in the building plans or otherwise for the construction, installation and dedication of public sidewalk, curb and gutter, including the removal and replacement of any sections of broken, displaced, cracked, etc. sidewalk, curb, gutter, pedestrian ramps and/or driveway approaches 1/2-inch or greater per city standards, and any reasonably necessary storm drainage facilities, along the frontage of the building site abutting upon the public streets. Such improvements shall be built to the standards required under Chapter 17.04 HMC and this chapter, and shall be completed before an occupancy permit may be issued for the structure.

B. The following are exempt from the provisions of this section:

1. Development of Accessory Dwelling Units and Junior Accessory Dwelling Units pursuant to Zoning Ordinance §20.20.010, where a primary structure exists.

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2. Permits for accessory structures such as gazebos, pools, decks, awnings, patio covers and similar accessory non-habitable structures.

3. Expansions to the floor area of existing non-residential structures of twenty-five (25%) percent or less. Expansions shall be considered cumulatively. Once expansions exceed twentyfive (25%) percent of the floor area, the requirements of this section shall apply.

Section 5. Title 17, Section 17.04.305 – Approval of final parcel maps shall be added and shall read as follows (additions underlined, deletions strikethrough):

The City Engineer is authorized to approve, conditionally approve, or disapprove final parcel maps (four lots or fewer).

The City Manager, or designee, may accept, accept subject to improvement, or reject dedications and offers of dedications that are made by a statement on the parcel map. Rejected offers of dedication may nevertheless be accepted at a later date.

Section 6. Title 20, Section 20.28.130 Effective date and term of approval shall be amended to read as follows (additions underlined, deletions strikethrough):

The following shall govern the date and term of design review approval.

A. Within five days following the date of a planning commission decision on a major design review permit application, the Secretary shall transmit to the City Council written notice of the decision. Approval of a major design review permit application shall become effective 10 days following the date on which the design review permit was granted by the planning commission or on the day following the next meeting of the Council, whichever is later, unless the decision has been appealed to the Council.

B. Approval of a minor design review application becomes effective 10 days from the date of action by the planning and building director, unless the decision has been appealed to the planning commission.

C. Design review approval is granted for 24 12 months. If within 24 12 months after the effective date, a building permit has not been issued for the design review project or, where a building permit is not required, construction of the improvement(s) has not commenced, the approval will automatically expire.

D. A maximum of two one 12-month extensions of time may be granted by either the planning and building department director. or the planning commission, whichever served as the acting authority on the initial design review application, upon the written request of a responsible party prior to the expiration of the initial term of the approval or the previous extension. If no application for an extension of time is filed prior to the expiration date of the initial term of the approval or the previous extension, the design review approval shall lapse as of the expiration date.

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In order to grant an extension, it must be found by the acting authority that there has been no change of circumstances that could prevent any of the required findings of approval to be made.

E. The term of design review approval may be made to be concurrent with the term of an associated tentative subdivision map, conditional use permit or variance at the discretion of the planning commission.

Section 7. Title 20, Section 20.08.100, Table 8, Permitted and conditionally permitted uses in ORM and MP Districts shall be amended as follows (additions underlined, deletions strikethrough):

20.08.100 Permitted and conditionally permitted uses in ORM and MP Districts The following permitted and conditionally permitted uses may be allowed in the ORM and MP Districts. Chapter 20.28 HMC, Article V describes the procedures for obtaining a conditional use permit.

Table 8 Permitted and conditionally permitted uses: ORM and MP Districts Permitted (P) and Conditionally Permitted (C) Uses ORM MP Any residential use permitted in Chapter 20.08 Article IIIV, RM District, subject to the regulations of the RM District. Residential uses may be combined with nonresidential uses on the same site.

P --
Churches, convents, monasteries, parish houses, parsonages, and other religious institutions C --
Employee housing for six or fewer employees in accordance with Cal.

Health & Safety Code § 17000, et seq. P P
Golf courses and driving ranges C --
Home occupations, subject to HMC 20.20.005 P --
Hospitals -- P
Library and Museums C --
Medical and dental laboratories C P
Offices - chiropractic care P P
Offices - professional, administrative and business1 P P Offices - professional and administrative, restricted to the provision of medical, dental, and other health care services C P
Parking lots P P
Pharmacies that do not carry general merchandise or dispense goods or C P

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Permitted (P) and Conditionally Permitted (C) Uses ORM MP merchandise unrelated to health care
Private noncommercial clubs and lodges C --
Private recreation parks and swim clubs C --
Private schools and colleges, not including art, craft, music, dancing, business, professional, or trade schools and colleges C -- Psychologist, psychiatrist, counseling and therapist offices P P Public utility and public service pumping stations, power stations, equipment buildings and installations, drainageways and structures, storage tanks, and transmission lines found by the planning commission to be necessary for the public health, safety and welfare
P --
Residential visitor lodging -- --
Sanitariums and nursing homes, not including mental, drug addict, or liquor addict patients P P
Spa, day C --
Vacation rental homes -- --
Vacation timeshares -- --
Veterinarian offices, clinics and animal hospitals -- C Section 8. Title 20, Section 20.08.050, Table 4, Permitted and conditionally permitted uses in the RM District shall be amended as follows (additions underlined, deletions strikethrough):

20.08.050 Permitted and conditionally permitted uses
The following uses may be permitted and conditionally permitted in the RM District. Chapter

20.28 HMC, Article V, describes the procedures for obtaining a conditional use permit.

Table 4 Permitted (P) and conditionally permitted (C) uses: RM District Permitted (P) and Conditionally Permitted (C) Uses RM Specific Use Regulations
Accessory dwelling unit PHMC

20.20.010
Accessory structures and uses located on the same site as a conditional use
P
Boarding houses C

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Permitted (P) and Conditionally Permitted (C) Uses RM Specific Use Regulations
Churches, convents, monasteries, parish homes, rectories, parsonages and other religious institutions C
Commercial nursery growing grounds C
Day care, general and large family PC
Day care, limited and small family P
Golf courses and driving ranges C
Hostels affiliated with American Youth Hostels or an equivalent organization approved by the planning director C
Mobile home parks CHMC

20.20.020
Multifamily dwellings P
Neighborhood convenience retail stores CHMC

20.20.070
Private recreation parks and swim clubs C
Private schools and colleges, including elementary, junior high and high schools, but not including art, craft, music, dancing, business, professional, or trade schools and colleges
C
Private stables and raising of poultry (except roosters), rabbits, chinchillas and other small animals C
HMC

20.08.025
Public utility and public service pumping stations, power stations, equipment buildings, installations, service yards, drainage ways and structures, storage tanks, reservoirs, and transmission lines found by the planning commission to be necessary for the public health, safety and welfare
C
Residential care, general C
Residential care, limited P
Residential visitor lodging operations CHMC

20.20.060
Supportive housing P
Transitional housing P
Vacation rental homes --
Vacation timeshares --

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Section 9.Title 20, Section 20.08.070, Table 6, Permitted and conditionally permitted uses in the DR District shall be amended as follows (additions underlined, deletions strikethrough):

20.08.070 Permitted and conditionally permitted uses
The following uses may be permitted and conditionally permitted in the DR District. Chapter

20.28 HMC, Article V describes the procedures for obtaining a conditional use permit.

Table 6 Permitted (P) and conditionally permitted (C) uses: DR District Accessory dwelling unit and junior accessory dwelling unit, subject to HMC 20.20.010 P Accessory structures and uses located on the same site as a permitted or conditional use P Boarding houses C
Churches, convents, monasteries, parish homes, rectories, parsonages and other religious institutions C
Day care, general and large family PC
Day care, limited and small family P
Duplex dwelling, one per lot of record C
Employee housing as defined in Cal. Health & Safety Code § 17008 for six or fewer employees in accordance with Cal. Health & Safety Code § 17000, et seq. P Home occupations, subject to HMC 20.20.005 P
Multifamily dwellings PC
Neighborhood convenience retail stores, subject to HMC 20.20.070 C Private schools and colleges, not including art, craft, music, dancing, business, professional, or trade schools and colleges C
Public utility and public service pumping stations, power stations, equipment buildings, installations, service yards, drainage ways and structures, storage tanks, reservoirs, and transmission lines found by the planning commission to be necessary for the public health, safety and welfare
C
Residential care, general C
Residential care, limited P
Residential visitor lodging operations, subject to HMC 20.20.060 C Single-family dwellings, detached, up to two per lot P
Supportive housing P
Swimming pools used solely by persons resident on the site and their guests; provided, that no swimming pool or accessory mechanical equipment shall be in a required front P

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yard or less than five feet from a property line
Transitional housing P
Vacation homes --
Vacation timeshares --
Section 10. Title 20, Section 20.08.150, Table 11, Permitted and conditionally permitted uses in the GMU District shall be amended as follows (additions underlined, deletions strikethrough):

20.08.150 Permitted and conditionally permitted uses: GMU District Table 11 identifies the permitted and conditionally permitted uses for the Grove Street Mixed Use District. This table is to be used in conjunction with the definitions contained in Chapter

20.28 HMC, Article IX. Chapter 20.28 HMC, Article V describes the procedures for obtaining a conditional use permit.

Table 11 Permitted and conditionally permitted uses: GMU District Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations
Residential Uses
Accessory dwelling unit and
junior accessory dwelling unit P
HMC

20.20.010
Boarding house C
Day care, large family PC
Day care, small family P
Duplex dwelling, one building per
lot of record P
Employee housing for six or
fewer employees in accordance
with Cal. Health & Safety Code §
17000, et seq.

P
Employee housing agriculture,
seven to 12 agricultural
employees
C
Residential care, general C
Residential care, limited P
Single-family dwelling, detached P

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Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations
Supportive housingP
Transitional housingP
Vacation rental home --
Retail Trade and Services
Antique storeC
Art gallery and picture framing
with art sales
P
Art and drafting supply storeC
Arts, crafts and hobby stores,
including instructional classes as
an accessory use
C
Barber shop/beauty shopP
Bicycle sales and repair, including
rentals
C
Florist (including outdoor sales)C
Neighborhood retail store
C
HMC

20.20.070
Nursery, garden supply storeC
Photography/photo supply store,
photography studio
P
Professional, administrative and
business offices, including
insurance, real estate and financial
offices, but excluding medical and
dental offices
P
Professional and administrative
offices related to health services
C
Psychologist, psychiatrist,
counseling and therapy offices
P
Residential visitor lodgingC
Spa, day use or overnight stayC
Vacation home --

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Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations
Vacation timeshare --
Recreation, Education and Public Assembly
Arts and crafts schoolC
Church, convent, monastery,
other religious institution
C
Golf course, driving rangeC
Private club, fraternal lodge and
meeting hall
C
Private museumC
Private recreational parks and
swim clubs
P
Private schools and colleges, not
including dancing, music,
business, professional or trade
schools and colleges
C
Utilities
Public utility and service usesP
Accessory Uses
Accessory structures located on
the same site with a permitted or
conditionally permitted use,
including private garages and
carports, one guest house or
accessory living quarters without
a kitchen, storehouses, garden
structures, noncommercial
greenhouses, recreation rooms,
and hobby areas within an
enclosed structure
P
Private stables or areas for the
keeping of one horse, cow, llama,
goat or similar large farm or
hobby animal on a site not less
than two acres in net area;
provided, that one additional large
P

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Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations
animal may be kept for each
additional acre of area of the site;
and provided, that no stable shall
be located closer than 50 feet to
any property line, closer than 50
feet to any dwelling unit on the
site, or closer than 100 feet to any
other dwelling on surrounding
properties
Raising of fruit and nut trees,
vegetables, and horticultural
specialties (no on-site sales)
P
Raising of poultry (except
roosters and crowing fowl),
rabbits, chinchillas, potbellied
pigs and other small animals for
commercial purposes on a site at
least 20,000 square feet in net
size; provided, that there shall be
at least 1,000 square feet of site
area for each fowl or animal; and
provided, that no structure
housing poultry or small animals
shall be closer than 50 feet to any
property line or closer than 25 feet
to a dwelling on the site
C
Raising or keeping of poultry
(except roosters and crowing
fowl), rabbits, chinchillas, guinea
pigs or similar small animals for
educational, hobby or non-
commercial purposes limited to a
total of 10 animals. This shall not
include dogs or cats. Animal pens
or cages shall not be located in a
required front yard or within a
street side corner yard and shall
be kept a minimum of 20 feet
from a property line
P

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Permitted (P) and Conditionally Permitted (C) Uses Specific Use Regulations
Temporary subdivision sales
offices P
HMC

20.20.025
Section 11. Title 20, Section 20.08.145, Table 10, Permitted and conditionally permitted uses in the PR, CD and CS Districts shall be amended as follows (additions underlined, deletions strikethrough):

20.08.145 Permitted and conditionally permitted uses: PR, CD, and CS Districts The following permitted and conditionally permitted uses may be allowed in the PR, CD and CS Districts. Chapter 20.28 HMC, Article V describes the procedures for obtaining a conditional use permit.

Table 10 Permitted and conditionally permitted uses: PR, CD and CS Districts Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Residential Uses
Accessory dwelling unit P P P HMC 20.20.010
Day care, general -- C C
Day care, limited -- P P
Homeless shelters -- -- P
Multifamily dwellings located on the same site as a
commercial use – above ground floor C P P
Multifamily dwellings located on the same site as a
commercial use – any floor -- P P
Residential care, general -- C C
Residential care, limited -- P P
Single-room occupancy dwellings located on the
same site as a commercial use – above ground floor C P P Single-room occupancy dwellings located on the
same site as a commercial use – any floor -- P P
Supportive housing P P P
Transitional housing P P P
Vacation rental -- C --

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Retail Trade and Services
Ambulance service -- -- P
Antique car display and sales -- C P
Antique sales – above ground floor P P C
Antique sales – ground floor C P C
Art galleries and picture framing with art sales P P P
Arts and crafts schools -- P P
Arts, crafts and hobby stores, including instructional
classes as an accessory use P P P
Automobile rentals -- -- P
Automobile washing (self-service) -- -- P
Automotive repair -- -- C
Automotive sales and service, new and used, with
auto service -- -- P
Automotive service stations, including smog testing,
minor repair (tune-ups and brake repair only), towing
services, vehicle storage and mini-markets
-- -- C
Automotive supply stores -- P P
Automotive upholstery shops -- -- C
Bakeries, retail P P P
Banks, savings and loans, thrift and loans, credit
unions, including automated teller machines and
drive-through facilities
-- C C
Banks, savings and loans, thrift and loans, credit
unions, including automated teller machines (no
drive-through)
C P P
Barber shops/beauty shops – above ground floor P P P
Barber shops/beauty shops – ground floor -- P P
Bars and cocktail lounges C C C HMC 20.20.075
Beer and wine sales (off-premises consumption),
ancillary to mini-market retail sales contained within
a service station
-- -- C HMC 20.20.075

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Bicycle sales and repair shops, including rentals -- P P Blueprint and photo reproduction shops -- P P
Boat sales and service -- -- P
Bookstores and newsstands – above ground floor P P P
Bookstores and newsstands – ground floor C P P
Bowling alleys -- -- P
Building material sales -- -- C
Bus depots C C C
Cabinet shops -- -- C
Cannabis Storefront Retailer (Dispensary) -- P P HMC 20.20.095 Cannabis Microbusiness (without cultivation) -- P P HMC 20.20.095 Card and stationers’ stores P P P
Carnivals and circuses, temporary -- -- C
Catering shops (food to go only) -- P P
Christmas tree sales lots, temporary P P P
Clothing and shoe establishments, including clothing
sales (new merchandise only), tailor shops, and
dressmaking establishments
P P P
Computer retail sales -- P --
Consignment sales with incidental sales of used
goods and clothing -- P P
Contractors’ equipment rental yards & equipment
rental yards -- -- C
Contractors’ shops with no outdoor storage of heavy
equipment -- -- P
Delicatessens and gourmet food sales with incidental
catering P P C
Dental labs -- P P
Department stores -- P P
Dry cleaners and laundries -- P P
Electronic games centers (4 or more games) -- C C

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Fabric shops P P P
Farmers markets C C C
Firearm dealers -- -- C HMC 20.20.105
Floor covering and drapery sales -- C P
Florists, including outdoor sales P P P
Food and cold storage lockers -- C P
Food stores over 3,500 square feet in retail sales -- P P Food stores up to 3,500 square feet in retail sales C P P Furniture repair -- P P
Furniture stores, retail P P P
Gift shops P P P
Glass shops (glaziers) -- -- P
Hardware, paint and wallpaper stores, with no firearm
sales -- P P
Hardware, paint and wallpaper stores with firearm
sales -- -- C HMC 20.20.105
Health clubs, gymnasiums and dance studios -- C P
Home electronics and household appliance stores,
including television, stereo, radio, telephone,
computer and related sales (includes repair and
installation services)
-- P P
Hotels, extended stay hotels and motels C C -- HMC 20.20.090 Ice cream parlors, soda fountains and candy stores P P P Interior furnishing and accessory shops P P P
Jewelry sales and repair, including watch and clock
repair P P P
Kennels -- -- C
Kitchenware shops P P P
Laboratories -- C P
Laundries – self-service -- P P
Linen supply services -- -- P

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Liquor, beer and wine sales – off-premises
consumption C C C HMC 20.20.075
Live-work facilities -- P P
Locksmiths -- P P
Machinery sales, service, rental -- -- P
Manufacturing/processing – light; provided, that all
of the conditions prescribed by Chapter 20.24 HMC,
Article I, are met, and that no motor power other than
electrically operated motors shall be used. The
horsepower of any single motor shall not exceed five
horsepower and the total horsepower of all such
motors on the site shall not exceed 25 total
horsepower. This does not include air conditioning
equipment.
-- C C
Massage establishments – above ground floor P P P
Massage establishments – any floor -- P P
Medical and dental clinics -- -- P
Mortuaries -- C C
Motorcycle sales and service -- C P
Music and dance entertainment clubs -- P C
Musical instrument sales, repair and lessons; and
recorded music sales – above ground floor P P P
Musical instrument sales, repair and lessons; and
recorded music sales – ground floor C P P
Nightclubs C C C HMC 20.20.075
Nurseries and garden supply stores -- C P
Office equipment sales and service -- P P
Offices – professional, administrative and business,
including chiropractor, insurance, real estate and
financial offices, but excluding medical and dental
offices – any floor
-- P P
Offices – professional, administrative and business,
including chiropractor, insurance, real estate and
financial offices, but excluding medical and dental

P -- --

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
offices – above ground floor
Offices – psychologist, psychiatrist, counseling and
therapy -- P P
Optician and optometrist shops -- P P
Outdoor vendors on private property C C --
Parking lots and parking garages C P P
Patio and garden furniture and accessories shops -- P P Pet shops, including pet grooming -- P P
Pharmacies and drugstores C P P
Photography shops, studios and photo supply stores C P P Picture framing shops -- P P
Plumbing supply shops -- C P
Pool and billiards halls -- C P
Pool and spa sales and service -- -- P
Post office and private mail services -- C P
Pottery and woodworking shops -- -- P
Printing, lithography and engraving -- C P
Public information centers – indoor P P P
Public utility installations, including public service
pumping stations, power stations and substations,
equipment buildings and installations
-- C C
Radio and television broadcast and recording studios -- C C Radio, television and stereo sales and service -- P P
Recreational equipment rental -- -- P
Recreational vehicle sales, services, repair and
storage -- -- P
Residential visitor lodging -- C C
Restaurants, cafes and eating establishments, indoor
and outdoor eating, including sale of alcoholic
beverages as an ancillary use and indoor music with
no sound amplification. Amplified sound requires a
P P P

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Conditional Use Permit.
• Amplified music C C C
Restaurants, drive-in, walk-up and drive-through -- -- C Retail warehouses over 6,000 square feet of floor area -- -- C Retail warehouses under 6,000 square feet of floor
area
-- -- P
Secondhand stores and pawn shops -- C C
Shoe repair -- P --
Sign painting -- C P
Skating rinks (within building) -- -- P
Spa, day -- P P
• Above ground floor
• ground floor
C
--
P
P
--P
--P
• Any floor -- P --
Spa, overnight P P --
Sporting goods sales, with rental as an accessory use,
with no firearm sales -- P P
Sporting goods sales, with rental as an accessory use,
with firearm sales -- -- C HMC 20.20.105
Supermarkets (over 3,500 square feet of retail sales
area) -- P P
Tasting room C C -- HMC 20.20.075
Theaters and auditoriums C C C
Tire sales, not including tire recapping -- -- P
Tobacco and pipe shops P P P
Toy stores P P --
Travel agencies – above ground floor P P P
Travel agencies – ground floor C P P
Upholstery shops -- C C
Vacation timeshares -- -- --

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Permitted (P) and Conditionally Permitted (C)
Uses PR CD CS Specific Use Regulations
Variety stores and dry goods -- P P
Vending machine service -- -- P
Veterinarian offices and small animal hospitals -- -- C Recreation, Education and Public Assembly
Churches and other religious institutions -- C C
Private clubs, fraternal lodges and meeting halls C C C Private museums P C --
Accessory Uses
Accessory structures and uses located on the same
site as a permitted or conditional use P P P
-- = not permitted
Section 12. Title 20, Section 20.08.310, Definitions shall be amended to read as follows (additions underlined, deletions strikethrough):

Live/work facilities. An integrated housing unit and working space, occupied and utilized by a single household in a structure that has been designed or structurally modified to accommodate joint residential occupancy and work activity, and which includes complete kitchen space and sanitary facilities in compliance with the City building code and working space reserved for and regularly used by one orf more occupants of the unit.

Amplified Sound. Any sound that is made larger through a human-made device (i.e. sound systems, speakers, drums, bullhorns)
Libraries and Museums. Public or Quasi-Public facilities including arboretums, art exhibitions, botanical gardens, historic sites and exhibits, libraries and museums which are generally noncommercial in nature.

Section 13. Title 20 Land Use Code, Section 20.16.045 maximum height of fences and walls shall be amended to read as follows (additions underlined, deletions strikethrough):

20.16.045 Maximum height of fences and walls
A. The maximum height of fences and walls allowed within required yards shall not exceed the following:

1. Required front yard within all zoning districts except R-1-20,000 and R-1-40,000 Districts: Four feet, except as further restricted for vision clearance per HMC 20.16.005(E).

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For corridor (i.e., flag) lots, this subsection shall apply to the portion of the access corridor (a.k.a. “flag”) that adjoins the required front yard of the adjoining lot(s).

2. Required front yard in R-1-20,000 and R-1-40,000 Districts: Six feet, except as restricted for vision clearance under HMC 20.16.005(E); and provided further, that the location and design of the fence complies with all of the following requirements:
a. The street frontage of the lot is not developed with a sidewalk nor is it designated by the General Plan for sidewalk development.
b. The fence is located 10 feet or more behind the property line fronting the street or the edge of the road, whichever is closer.
c. The fence is transparent, as defined in Chapter 20.28 HMC, Article IX.

Otherwise, walls or fences with opaque siding material (e.g., solid boards) exceeding four feet in height are not allowed within a required yard fronting a street.

3. Required rear yard and interior side yard: Six feet plus two feet of additional 50% open lattice.

4. Required side yard fronting a street: Six feet if located 15 feet or more behind the front wall of the main building. Otherwise, the maximum height of a fence or wall located within a side yard fronting a street shall not exceed four feet, except as further restricted for vision clearance under HMC 20.16.005(E).

B. The maximum height of fences and walls allowed outside of required yards shall not exceed 12 feet. (Ord. 1090 § 4 (Exh. B § 1825), 2009; Ord. 1012 § 2 (Exh. B § 1), 2004; Ord. 950 § 2 (Exh. A § 1825), 1998.)
Section 14. Title 20 Land Use Code, Section 20.16.055 Fences Walls and hedges exceeding the allowed height shall be amended to read as follows (additions underlined, deletions strikethrough):

20.16.055 Fences, walls and hedges exceeding allowed height Fences, walls, hedges and other screening vegetation may exceed the maximum height allowed by HMC 20.16.045 and 20.16.050 under the following circumstances:

A. The planning and building director determines that a grade separation exists such that a property owner is denied private use of a lot, or
B. The Planning and Building Director approves a minor conditional use permit, subject to Chapter 20.28 Article V. A Building Permit is required for fences exceeding seven feet in height.

Section 15. Title 20 Land Use Code, Section 20.20.055 Large Family Day care Facilities shall be deleted as follows (additions underlined, deletions strikethrough):

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20.20.055 Large family day care facilities
The following standards shall apply to large family day care facilities:

A. A large family day care facility shall be permitted only on lots zoned for residential uses.

B. No large family day care shall be located within 500 feet of an existing small family day care, and limited or general day care facility, as measured from exterior lot lines.

C. The driveway of a large day care facility may be used to provide required off-street parking, if such parking will not obstruct any required drop-off and pick-up areas or block any sidewalks or other public access.

D. A City business license shall be required and no building permit shall be issued until all state permits and licenses have been obtained by the applicant and copies forwarded to the building official.

E. The premises shall be inspected by the Healdsburg Fire Department for compliance with applicable fire codes prior to issuance of a City business license. (Ord. 950 § 2 (Exh. A § 1850), 1998.)
Section 16. Title 20, Land Use Code, Section 20.20.110 Temporary Use Permit (TUP) shall be added and shall read as follows (additions underlined, deletions strikethrough):

20.20.110 Temporary Use Permits (TUP)
A. Purpose. This section establishes procedures for the granting of Minor and Major Temporary Use Permits for certain nonrecurring, specific duration activities not otherwise permitted by the Land Use Code. A Minor or Major Temporary Use Permit may allow for the temporary utilization of a privately owned property for a special, unique, or limited duration of use that may not comply with the normal development or use standards of the applicable zoning district but may otherwise be acceptable because of their temporary nature. The issuance of a Minor or Major Temporary Use Permit does not confer any land use entitlement or property right to the holder of the permit. Minor or Major Temporary Use Permits are not subject to Section 20.28.105-Design Review Compliance. This section does not supersede existing regulations pertaining to specific temporary uses included in other code sections.

B. Minor Temporary Use Permits may only be issued if the proposed use meets the following requirements:

1. The use has a time limit not to exceed 12 months, with the possibility of one (1) 12-month extension;

2. The temporary use is located on the same parcel as or a contiguous parcel to the primary use;

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3. The temporary use site is zoned CS, I, MP, or MU;

4. The use does not include the construction or establishment of permanent structures, pavement, or other features;

5. Sensitive environmental resources such as oak trees, wetlands, and endangered species will not be impacted;

6. The use is accessory to an existing primary use (or approved primary use) within the Healdsburg city limit;

7. The use is not in conflict with conditions or other limitations of existing discretionary approvals that apply to the site; and

8. The use shall be sensitive to the health, safety and general welfare of persons residing and working in the community and shall be conducted so as not to have detrimental effects on the surrounding properties or the community. a. A Major Temporary Use Permit may only be issued if the temporary use meets all the requirements of a Minor Temporary Use Permit, except:

1. The temporary use has a time limit greater than 12 months but not to exceed 36 months, with the possibility of one (1) 12-month extension; and/or

2. The temporary use is off-site on a non-contiguous parcel from the primary use.

C. Allowed temporary activities. The following temporary uses may be allowed within the specified time limits, subject to the issuance of a Minor or Major Temporary Use Permit.

Other temporary or short-term activities that do not fall within the categories defined below shall instead comply with the land use permit requirements and development standards that otherwise apply to the property.

1. Temporary Construction yards—Off-site. Off-site contractors’ construction yards, including a work trailer in conjunction with an approved construction project. The construction yard shall be removed immediately upon completion of the construction project, or the expiration of the companion Building Permit authorizing the construction project, or the expiration of the Minor or Major Temporary Use Permit, whichever first occurs.

2. Temporary unpaved parking lots.

3. Temporary outside storage of equipment and product.

4. Modular/portable buildings used for classrooms or offices.

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5. Other temporary uses of a similar nature as determined by the planning and building director.

D. Approval process. Minor Temporary Use Permits are subject to review and approval by the Zoning Administrator after a public hearing. Major Temporary Use Permits are subject to review and approval by the Planning Commission after a public hearing. The approving authority may grant up to one (1) 12-month extension after a public hearing.

E. Conditions of Approval. In granting a Minor or Major Temporary Use Permit, the reviewing authority may prescribe appropriate conditions and safeguards in conformity with this section. The reviewing authority may prescribe a time limit within which the action for which the temporary use permit shall be started, completed, or both. Conditions of approval for the temporary use may include, but are not limited to:

1. Regulation of hours and days of operation;

2. Requirement of bonds or other guarantees for cleanup or removal of any structures or equipment and/or the return of temporary use site to its original state within a specified period of time;

3. Regulation of permit duration except for as specified herein;

4. Regulation of signs and advertising;

5. Regulation of lighting and fencing;

6. Regulation of public-address or sound system;

7. Regulation of gas, dust, smoke, noise, fumes, vibrations or other nuisances;

8. Regulation of design features including, but not limited to, size, colors, material, architectural details and landscaping;

9. Provisions for adequate traffic access/circulation, off-street parking and pedestrian safety, to be maintained during the operation of the use as necessary; and

10. Such other conditions as are deemed necessary to protect the health, safety and welfare of the community and to assure compliance with the intent and purpose of this section.

F. Application requirements. An application for a Major or Minor Temporary Use Permit shall be filed on forms prescribed for this purpose and accompanied by the required application fee. The application shall provide any other information, prescribed by the

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planning and building director, including plans and/or maps as may be necessary for adequate review of the application. The applicant may also be required to submit environmental reports as determined by the Director in order to demonstrate that no environmental resources will be impacted.

G. Findings. The reviewing authority shall make the following findings in granting a Minor or Major Temporary Use Permit:

1. The Minor or Major Temporary Use Permit complies with the various provisions of this chapter;

2. The temporary use will not impede the reasonable use of land, or the orderly development of land in the immediate vicinity;

3. The temporary use will not adversely affect sensitive species, or wetlands, or adjacent uses, buildings or other structures;

4. The temporary use will not endanger the public health, safety or general welfare; and

5. That the granting of the temporary use permit is made subject to those conditions necessary to preserve the general welfare, not the individual welfare of any particular applicant.

H. Revocation. This permit may be revoked for any reason in the sole and absolute discretion of the planning and building director or their designee upon 30 days’ written notice, or immediately upon written notice in the event that the permittee, as determined by the planning and building director or their designee, is in violation of any law such that the activity endangers the public health, safety, or general welfare.

Section 17. Title 20 Land Use Code, Section 20.28.075 Reviewing Entities shall be amended to read as follows (additions underlined, deletions strikethrough):

C. Zoning Administrator. A zoning administrator may be appointed to perform certain duties as described in this title and as authorized by the State Planning And Zoning Law. The City Manager shall appoint the zoning administrator and determine qualifications for the office.

1. The zoning administrator provides a method by which minor adjustments from ordinance requirements can be made without the delays resultant to the setting of such matters for public hearing before the planning commission and to relieve the planning commission from certain minor and routine matters.

2. The zoning administrator shall have the authority to grant or conditionally grant minor use permits, minor temporary use permits, minor variances, and determinations of unspecified uses as set forth elsewhere in this title.

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3. The zoning administrator shall adopt rules and regulations to govern the procedures at public meetings and to set times for required meetings. All meetings shall be open to the public.

D. Table 22 summarizes the various reviewing and approval bodies for applications made pursuant to this title.

Table 22 Permit approval matrix
Application Type
Recommending
Authority
Approval
Authority Appeal
Final
DecisionMaking Body
Approval for
Appeals
Building relocation
None
Building
official and
planning
director
Planning
commission City Council
Conditional use permit
- major Staff Planning commission City Council City Council Conditional use permit
- minor Staff Zoning administrator
Planning
commission City Council
Design review - major Staff Planning
commission City Council City Council
Design review - minor
Staff
Planning and
building
director
Planning
commission City Council
Determination of use Staff Zoning
administrator
Planning
commission City Council
General Plan
amendment (map
and/or text)
Planning
commission City Council None None City Council
Variance - major Staff Planning
commission City Council City Council
Temporary use permit
- major Staff Planning commission City Council City Council Temporary use permit
- minor Staff Zoning administrator
Planning
commission
None City
Council
Variance - minor Staff Zoning Planning City Council

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Application Type
Recommending
Authority
Approval
Authority Appeal
Final
DecisionMaking Body
Approval for
Appeals
administrator commission
Zone change Planning
commission City Council None City Council
Zoning ordinance
amendment (rezone
and prezone)
Planning
commission City Council None None City Council
Staff: The professional staff of the planning and building department *The City Council is the appeal body if the planning commission denies the rezone. (Ord. 1187 § 6, 2019; Ord. 1012 § 2 (Exh. A § 10), 2004; Ord. 950 § 2 (Exh.

A § 2505), 1998.

Section 18. Title 20 Land Use Code, Section 20.28.080 Public Notice Requirements, shall be amended to read as follows (additions underlined, deletions strikethrough):

A. Notice shall be given in accordance with state law and as set forth in Table 23. In addition, the City may give notice of hearings in any other manner deemed necessary or desirable so long as compliance with state law is assured.

Table 23 Notification requirements
Type of Procedure, Permit or
Hearing
Surrounding
Properties Publication On-Site Posting
On-Site
Sign
Appeal (1) (1) (1) (1)
Conditional use permit - major yes yes no yes
Conditional use permit - minor yes no yes no
Determination of use no no no no
General Plan amendment (map
designation)
(2) yes no yes
General Plan amendment (text) no yes no no
Design review - major yes yes no yes
Design review - minor no no no no

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Type of Procedure, Permit or
Hearing
Surrounding
Properties Publication On-Site Posting
On-Site
Sign
Variance - major yes yes no yes
Variance - minor yes no yes no
Temporary use permit - minor yes no yes no
Temporary use permit - major yes yes no yes
Subdivision - major yes yes no yes
Section 19. Environmental Compliance.

The City Council finds that the proposed ordinance Amendments are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) (the “common sense exemption”) because it can be seen with certainty that there is no possibility that the municipal code Amendments will have a significant effect on the environment. The proposed Amendments make clarifying changes to the Municipal Code and will not allow for, nor encourage, any more development than is already anticipated under the City’s General Plan, or otherwise allow for or promote physical changes in the environment and, therefore, it can be seen with certainty that there is not a possibility that the proposed Amendments may have a significant impact on the environment.

In addition, the proposed Amendments are exempt from CEQA pursuant to Section 15304 of the CEQA Guidelines (“minor alterations to land”) because any new uses permitted by the Amendments, such as temporary use permits, are temporary in nature having negligible or no permanent effects on the environment, and will not involve the removal of any healthy, mature scenic trees as required by the statute.

Moreover, none of the CEQA exceptions apply. The Amendments will not impact any environmental resources of hazardous or critical concern. The Amendments are primarily procedural in nature, and any new uses are minor and temporary, with no impacts to critical resources. The Amendments will also not contribute to cumulative impacts, or have a significant effect due to unusual circumstances. The Amendments make clarifying procedural changes to the municipal code, and any new uses such as temporary use permits are minor and transient in nature and would not arise to the level of an unusual circumstance or contribute to cumulative impacts.

Lastly, the Amendments will not impact scenic highways, will not involve hazardous waste sites, and will not impact historical resources. Any new uses would be minor and temporary, and cannot not be approved if there are environmental impacts to sensitive species, wetlands, or adjacent uses, buildings or other structures.

Section 20. Severability.

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If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

Section 21. Effective Date and Publication.

This Ordinance of the City of Healdsburg shall be effective thirty (30) days after the date of its passage. Before expiration of fifteen (15) days after its passage, this Ordinance or a summary thereof as provided for in Government Code Section 36933, shall be published at least once in a newspaper of general circulation published and circulated in the City of Healdsburg, along with the names of the City Council members voting for and against its passage.

INTRODUCED by the City Council of the City of Healdsburg on the 5th day of June, 2023, and PASSED and APPROVED at a regular meeting of the City Council on the ____ day of ____, 2023, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAIN: Councilmembers: ( )
SO ORDERED: ATTEST:
__________________________________ ____________________________________ Ariel Kelley, Mayor Raina Allan, City Clerk
Dated: ______________________________

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Packet Pg. 351 Attachment: Att 2 Planning Commission Resolution 2023-14 (4050 : Municipal Code Amendments Chapter 17 and Chapter 20)

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Packet Pg. 352 Attachment: Att 2 Planning Commission Resolution 2023-14 (4050 : Municipal Code Amendments Chapter 17 and Chapter 20)

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Packet Pg. 353 Attachment: Att 2 Planning Commission Resolution 2023-14 (4050 : Municipal Code Amendments Chapter 17 and Chapter 20)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 5, 2023
SUBJECT: Consider adoption of electric rates for fiscal years 2023-24 through 2026- 27 PREPARED BY: Terry Crowley, Utilities Director
STRATEGIC INITIATIVE(S):

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

Adopt a Resolution rescinding Resolution No. 9-2016 following the October 2023 utility billing and adopting electric rate increases and updated rate schedules.

COMMUNITY ENGAGEMENT/OUTREACH:

This is the third in a series of presentations regarding Healdsburg’s electric cost of service analysis (COSA) and rate development. The intent of this item is to adopt electric rates previously discussed during the March 6, 2023 and April 17, 2023 council meetings. The potential adoption of electric rates was also publicly noticed in the Press Democrat.

BACKGROUND:

In 2016, the City Council adopted a resolution approving annual rate increases for fiscal years (FY) 2016-17 through FY 2018-19. As those increases have now ended and costs have increased, City staff along with EES Consulting began the process of performing a Cost-of-Service Analysis (COSA) for a new series of electric rates for FY2023-24 through FY2026-27. The COSA helps ensure fair and reasonable cost recovery amongst the City’s various customer classes (residential, small, and medium commercial and industrial) while also ensuring the City’s Electric Enterprise has adequate funding to continue to operate.

Since the final approved rate increase in FY 2018-19, the city has used electric revenues and unrestricted reserves to maintain daily operations, increased the department’s operating reserve to 50% of annual operating costs plus a $4 million capital reserve, and completed large capital improvement projects such as Healdsburg Avenue & Mill Street Undergrounding ($2.6 million) and the Badger Substation upgrades ($5.0 million). However, FY 2022-23 and 2023-24 budgets show the fund entering a deficit. Extreme inflation, energy market volatility, and desired

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community improvements necessitate rate increases to ensure fund stability.

During the March 6 and April 17 Council meetings staff presented an overview of the rate setting process and financial challenges facing Healdsburg’s electric department. With Healdsburg’s electric rates 50% lower than PG&E and Sonoma Clean Power (SCP), Healdsburg electric customers receive significant savings on their monthly energy bills. Healdsburg’s lower electric rates result in communitywide savings of over $12 million annually. The proposed rate increases over the next four years will reduce these savings but still allow the City to provide reliable energy, community driven projects, and substantial savings over both PG&E and SCP.

DISCUSSION/ANALYSIS:

During the initial phases of the COSA, EES Consulting reviewed and developed revenue requirements for FY2023-24 through FY2026-27. The table below lists each year’s revenue requirement and represents the cost forecasts for the coming years. As shown, costs will increase over the next several years and therefore the City’s cost recovery requirements (rates) will need to increase.

FISCAL YEAR

FORECASTED

REVENUE REQUIREMENT

PERCENT

INCREASE
FY 2023-24 $14.0 mil 16%
FY 2024-25 $16.0 mil 14%
FY 2025-26 $17.4 mil 8%
FY 2026-27 $18.6 mil 7%
The revenue requirements assume a use of fund reserves and represent the rate revenues required to cover forecasted costs in each of the major cost categories: Generation, Transmission, Distribution, and General. Energy and transmission costs, utility undergrounding projects, and inflationary constructions costs are large drivers increasing revenue requirements.

Energy and Transmission Costs
Multiple years of drought, inflation, and necessary plant repairs and maintenance have all resulted in cost increases for energy. From FY2017-18 to FY2021-22 the City’s energy prices have increased 29% and energy costs for FY2022-23 are expected to come in 26% over FY2021- 22 costs. Forecasts for energy costs, without the addition of new renewable or other clean energy sources, are expected to lower from the peak in FY2022-23 but remain roughly 50% higher than energy prices seen in FY2017-18. Compounding this are increased transmission costs; the cost necessary to bring power from the City’s various generation plants within California to Healdsburg. In FY2017-18 the City paid just over $1.7 million for transmission services. For FY2022-23 these costs are estimated to exceed $2.5 million, a 43% increase over 6-years.

Continuing to increase, transmission charges are expected to reach $2.8 million in FY2026-27.

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Healdsburg’s energy and transmission costs have seen recent and rapid increases in costs. The forecast for future years indicates they will remain higher than the historic average.

O&M and Planned Capital Improvements
The rapid increase in material costs has and is expected to continue to outpace inflation.

Following COVID equipment prices have seen increases between two to five times their historical pricing. Over the next four years the City will need to prepare to spend more on materials. While material costs are a small portion of the electric department’s internal costs, they will contribute to overall cost increases.

Additionally, is planning to fund succession planning efforts as a result of anticipated staff retirements. In most cases this will require a brief overlap of positions to transition knowledge.

While this will temporarily increase the department’s costs it is a necessary cost to recruit and transition new employees and maintain continuity in communitywide services.

To minimize the near-term costs and impact of rate increases, staff have removed three large projects shown on the current Capital Improvement Plan: the South Healdsburg Back-tie, Badger Substation Bank Replacement, and the Reconductor of Grove Street north of Dry Creek. This work can be deferred with a limited but increased risk of planned and unplanned outages.

Removing these projects eliminates just over $1.6 million of capital improvement projects from the four-year cost-of-service analysis and will have the effect of reducing rate increases.

The proposed rate increase will continue to fund a grant match for seismic retrofitting (liquefaction) at the Badger Substation, undergrounding of Grove Street between Dry Creek Road and Grant Street, and undergrounding portions of Healdsburg Avenue between Parkland Farms to just south of the Community Center. Over the next four years, these projects are estimated to have a combined cost of $6.9 million with most of the funding going to undergrounding projects planned in FY2024-25 and FY2025-26. Each of these projects contribute to the need for increased rates but will return measurable benefits to the community.

Timing of the projects, and the corresponding revenue requirement, is based on the need to complete undergrounding work in advance is other planned improvements to those areas.

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COSA Revenue Requirement Results
The table below summarizes the COSA results and illustrates the forecasted revenue requirements that need to be recovered by electric rates. These costs have been reduced by eliminating the forementioned capital projects but will support community improvements such as the undergrounding projects planned for Healdsburg Avenue and Grove Street.

Rate Adjustment Plan 2023 2024 2025 2026 2027
Proposed Rate Adjustment 16.0% 14.0% 8.0% 7.0%
Revenue with Rate Adjustment $12,064,804 $13,995,172 $16,010,818 $17,352,755 $18,633,055 Other Revenue (op and non-op) $232,519 $238,519 $245,675 $253,045 $260,636 Total Revenue $12,297,323 $14,233,691 $16,256,493 $17,605,800 $18,893,691 Purchased Power & Transmission (NCPA) $9,470,050 $9,173,804 $8,984,866 $8,761,614 $8,810,075 Operations & Maintenance $6,383,947 $6,416,240 $6,648,899 $6,434,450 $6,177,090 Capital Improvement Program $35,000 $62,500 $1,410,000 $4,488,750 $900,000 Total Expenses $15,888,997 $15,652,544 $17,043,765 $19,684,814 $15,887,164 Surplus (Deficit) ($3,591,675) ($1,418,853) ($787,272) ($2,079,014) $3,006,527 The above table shows the preliminary revenue requirements for the next four fiscal years. A significant jump in energy and transmission costs, along with planned capital improvement projects are driving a need to increase electric rates.

The proposed rate increase will, over time, correct the planned deficit of FY2023-24, adjust revenues to account for increases in wholesale power costs and transmission services, and fund undergrounding projects along major thoroughfares. The proposed rate increase also benefits the community by improving long-term revenues to support future projects. The projected “surplus” in 2027 is deemed necessary to meet the fund’s reserve policy and re-establish the financial resilience of the enterprise after the deficits of the current and future years.

Proposed Rate Increases
As developed from the COSA, Attachment A details the proposed electric rate schedules for the coming fiscal years. Incorporated into the proposed rate increases are rate adjustments indicated by the cost allocation methodology applied within the COSA model. In developing these rates, the timing of future capital projects and the use of fund reserves help minimize the magnitude of the overall increases. As a generalized summary, the following table illustrates three of the proposed electric rate increases for various customer usages levels.

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Multi-Family Rate (D-1)
Monthly kWh
Usage (kWh) Old Rate
Low Usage 150 $26.78 $29.11 $2.33 8.7% $34.72 $3.59 11% Average Usage 272 $43.37 $47.85 $4.47 10.3% $55.03 $4.83 10% High Usage 450 $67.59 $75.18 $7.59 11.2% $84.67 $6.63 9% Single-Family Rate (D-1)
Monthly kWh
Usage (kWh) Old Rate
Low Usage 350 $53.98 $63.10 $9.11 16.9% $74.32 $8.06 12% Average Usage 484 $72.21 $83.67 $11.46 15.9% $96.63 $9.41 11% High Usage 700 $101.59 $116.85 $15.25 15.0% $132.59 $11.60 10% Small Commercial Rate (C-1)
Monthly kWh
Usage (kWh) Old Rate
Low Usage 950 $165.36 $194.38 $29.01 17.5% $228.96 $24.01 12% Average Usage 1120 $191.74 $223.82 $32.08 16.7% $261.22 $26.06 12% High Usage 1350 $227.44 $263.66 $36.23 15.9% $304.86 $28.82 11% Four Year Average
Four Year Average
FY2024 New Rate Four Year Average
FY2024 New Rate
FY2024 New Rate
Annual Rate changes are for general reference and actual changes will depend upon each individual customer’s monthly consumption. Over the four year period rates will increase by an average of between 10 and 12% per year.

As discussed in the COSA, each rate class can have varying increases. As each rate class, or customer grouping, consumes energy differently and therefore changes how the City incurs costs to provide service. For example, multi-family customers tend to have a lower demand per customer than single-family homes. The proposed establishment of differing monthly fees for single and multi-family customers more fairly allocates costs to maintain the electric system year-round. Additionally, a focus on increasing the monthly customer charge, rather than the per unit cost of energy, better recovers fixed costs that are independent of the amount of energy supplied.

Certain charges within the commercial and residential rates are proposed to be removed. For residential customers, the highest residential tier rate has been removed. Removal of this rate follows a utility trend of narrowing the residential per-unit charge as it better represents how utilities incur energy costs. For all customers, there is a focus on gradually increasing the fixed monthly customer charge. The intent of this charge is to represent the costs of providing a service connection and maintaining access and availability to the power grid. For small energy users within a rate class, this will result in a proportionally larger rate increase but more fairly collects costs incurred to operate and maintain the electric system.

Staff have updated the Electric Rate Schedules to further define each rate class and associated electric rates. The Rate Schedule includes application guidelines, definitions of each rate component, details of available rate modifiers, and the proposed costs. This allows for clarity and consistency in the application of electric rates. The Rate Schedule also defines rate modifiers such as net-metering (solar), Healdsburg’s Green Rate, demand charges, and time-of-use rate application. Updated Rate Schedules are included at Attachment B to the staff recommended resolution.

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Savings over Pacific Gas & Electric & Sonoma Clean Power The City’s electric rates are currently 50% lower than PG&E and SCP and these low rates result in community-wide savings of $12 million each year. If adopted the proposed rates will reduce these savings but would still provide substantial savings PG&E and SCP current electric rates.

The three charts below compare Healdsburg’s current and proposed electric rates against PG&E and SCP. The comparison shows Healdsburg maintaining a 41 to 46% savings over the neighboring service providers. With the proposed rates the yearly savings will be $11 million and create total savings over the four years of between $53 to $66 million.

PG&E & SCP’s proposed average rates compared to Healdsburg’s current and proposed rates.

With the proposed rate increases, Healdsburg will continue to have lower electricity rates and provide measurable savings to the community.

ENVIRONMENTAL STEWARDSHIP:

Maintaining the financial stability of the City’s electric enterprise will allow the support of the City electrification of the transportation and building sectors to reduce greenhouse gas emissions.

If adopted, the proposed rates increases will also prepare the electric enterprise financially to increase the capacity of the electric grid in support of increased future use of electric vehicles and building electrification.

ALTERNATIVES:

The City Council may choose not to approve the electric rate increases or lower the percent rate increase indicated by the COSA. If the Council chooses this option, the City’s Electric Enterprise

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it would also be necessary to adjust the forecast of future investments in order to balance costs and revenues while meeting reserve requirements.

FISCAL IMPACT:

The proposed electric rates will gradually increase the Electric Enterprise revenues to fund operational costs, complete planned capital replacements, and re-establish reserves to ensure the long term health of the enterprise. In FY2023-24 approximately $400,000 of the operating reserves would be used to support operations and over FY2024-25 and FY2025-26 $3.1 million of the capital reserve funds will support expediting the planned capital projects. The proposed rates will facilitate a full recovery of all reserves in FY2026-27 and ensure ongoing funding for future projects in subsequent years. The chart below illustrates the effect of the proposed rates on the fund balance in the Electric Fund.

FY 23-24 FY 24-25 FY 25-26 FY26-27
Beginning Working Capital $ 13,678,162 $ 12,259,310 $ 11,472,037 $ 9,393,023 Revenue 14,233,691 16,256,493 17,605,800 18,893,691
Expenditure - Operations 15,590,044 15,633,765 15,196,064 14,987,164 Expenditure - Capital 62,500 1,410,000 4,488,750 900,000 Estimated Ending Working Capital $ 12,259,310 $ 11,472,037 $ 9,393,023 $ 12,399,550 Change in Working Capital $ (1,418,853) $ (787,272) $ (2,079,014) $ 3,006,527 Components of Fund Balance
Reserve Policy (50%) $ 7,795,022 $ 7,816,883 $ 7,598,032 $ 7,493,582 Reserve Policy ($4 Million Capital) $ 4,000,000 $ 4,000,000 $ 4,000,000 $ 4,000,000 Pension Stabilization $ 882,291 $ 889,291 $ 896,291 $ 903,291 Remaining Working Capital (Reserve Use) $ (418,003) $ (1,234,136) $ (3,101,300) $ 2,677 Electric Fund
ENVIRONMENTAL ANALYSIS:

This Resolution is not subject to the California Environmental Quality Act (“CEQA”). This action is not a project within the meaning of the CEQA Guidelines Section 15378 and 15061(b)(3) as it has no potential for physical effects on the environment because it involves an adoption of certain rates and/or charges imposed by the City and does not commit the City to any specific project.

ATTACHMENT(S):

Resolution
Attachment-A Proposed Electric Rates
Attachement-B Proposed Electric Rate Schedule FY2023-24 Healdsburg Electric Cost of Service Study

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CITY OF HEALDSBURG
RESOLUTION NO.

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
HEALDSBURG RESCINDING RESOLUTION NO. 9-2016
FOLLOWING THE OCTOBER 2023 UTILITY BILLING AND

ADOPTING ELECTRIC RATE INCREASES AND UPDATING

ELECTRIC RATE SCHEDULES
WHEREAS, the City Council of the City of Healdsburg adopted Resolution 9-2016, setting the current electric rates for the City of Healdsburg; and WHEREAS, EES Consulting, Inc. performed a Cost of Service Analysis (“COSA”) detailing the revenue requirements for Fiscal Years 2023-24, 2024-25, 2025-26, and 2026-27; and WHEREAS, the revenue requirements resulting from the COSA show increases in the cost to provide the City with electric service; and
WHEREAS, on June 5, 2023 EES Consulting presented to the City Council the completed COSA and provide proposed electric rates designed to recover the Electric Enterprise’s forecasted costs; and
WHEREAS, the COSA model allocates costs fairly and proportionately based upon the monthly coincident peak, energy consumption, and customer costs; and WHEREAS, the fair and reasonable allocation of costs to provide electric service is required by California’s Proposition 26(Article XIII-C, Section 1 of the California Constitution) and the COSA ensures that the proposed electric rates comply with California’s Proposition 26; and
WHEREAS, any judicial action or proceeding to attack, review, set aside, void, or annul this Resolution, which fixes and adopts the proposed electric rates, shall be commenced within 120 days of the effective date of this Resolution; and
WHEREAS, this Resolution is not subject to the California Environmental Quality Act (“CEQA”). This action is not a project within the meaning of the CEQA Guidelines Section 15378 and 15061(b)(3) as it has no potential for physical effects on the environment because it involves an adoption of certain rates and/or charges imposed by the City and does not commit the City to any specific project.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Healdsburg determines that each of the findings set forth above is true and correct, and by this reference incorporates those findings as an integral part of this Resolution.

NOW, THEREFORE, BE IT FURTHER RESOLVED, that the City Council of the City of Healdsburg rescinds Resolution No. 9-2016 following the October 2023 utility billing and

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Packet Pg. 361 Attachment: Resolution (3962 : Electric Rate Setting) Resolution No. -2023

adopts the electric rates shown in Attachment-A and electric rate schedules shown in AttachmentB as updated annually to remain consistent with Attachment-A and that these rates will be effective with the first billing cycle of November 2023.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Healdsburg this 5 th
day of June 2023, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
________________________________ ____________________________________ Ariel Kelley, Mayor Raina Allan, City Clerk

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Packet Pg. 362 Attachment: Resolution (3962 : Electric Rate Setting)

ATTACHMENT A
PROPOSED ELECTRIC RATES FOR FISCAL YEARS 2024, 2025, 2026 & 2027 (rates will be effective with the November billing of each fiscal year) FY2023-24 FY2024-25 FY2025-26 FY2026-27
D1 - Residential Service:

Single-Family Customer Charge/Per Month $9.34 $13.31 $17.07 $24.45 Multi-Family Customer Charge/Per Month $6.07 $7.99 $10.24 $14.67 Energy Charge/Per KWH:

Tier 1 $0.1571 $0.1657 $0.1702 $0.1765
Tier 2 $0.2119 $0.2799 $0.3035 $0.3192
FY2023-24 FY2024-25 FY2025-26 FY2026-27
D4 - All Electric Residential Service:

Single-Family Customer Charge/Per Month $9.34 $13.31 $17.07 $24.45 Multi-Family Customer Charge/Per Month $6.07 $7.99 $10.24 $14.67 Energy Charge/Per KWH:

Tier 1 $0.1571 $0.1657 $0.1702 $0.1765
Tier 2 $0.2119 $0.2799 $0.3035 $0.3192
FY2023-24 FY2024-25 FY2025-26 FY2026-27
E7 - Residential TOU Service:

Single-Family Customer Charge/Per Month $15.89 $19.97 $25.61 $36.67 Multi-Family Customer Charge/Per Month $9.53 $11.98 $15.37 $22.00 Summer Energy Charge/Per KWH:

Peak $0.3273 $0.3786 $0.3886 $0.3958
Off Peak $0.1723 $0.1993 $0.2045 $0.2083
Winter Energy Charge/Per KWH:

Peak $0.2836 $0.3281 $0.3370 $0.3495
Off Peak $0.1576 $0.1823 $0.1872 $0.1941
FY2023-24 FY2024-25 FY2025-26 FY2026-27
C1 - Small General Service:

Customer Charge/Per Month $29.82 $42.26 $54.49 $68.27
Summer Energy Charge/Per KWH: $0.1956 $0.2110 $0.2181 $0.2249 Winter Energy Charge/Per KWH: $0.1508 $0.1639 $0.1718 $0.1817

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Packet Pg. 363 Attachment: Attachment-A Proposed Electric Rates (3962 : Electric Rate Setting) FY2023-24 FY2024-25 FY2025-26 FY2026-27
A6 - Small General Service TOU:

Customer Charge/Per Month $35.79 $54.94 $70.84 $88.75
Summer Energy Charge/Per KWH:

On-Peak $0.2917 $0.3165 $0.3209 $0.3328
Part-Peak $0.1823 $0.2042 $0.2139 $0.2219
Off-Peak $0.1402 $0.1459 $0.1528 $0.1585
Winter Energy Charge/Per KWH:

Part-Peak $0.2273 $0.2657 $0.2785 $0.2965
Off-Peak $0.1508 $0.1574 $0.1652 $0.1718
FY2023-24 FY2024-25 FY2025-26 FY2026-27
P2 - Medium General Service:

Customer Charge/Per Month $121.93 $131.72 $138.86 $144.79 Summer Demand Charge/Per KW: $10.28 $12.49 $16.10 $16.79 Summer Energy Charge/Per KWH: $0.1441 $0.1493 $0.1503 $0.1525 Winter Demand Charge/Per KW: $9.00 $11.11 $13.17 $15.56 Winter Energy Charge/Per KWH: $0.1344 $0.1410 $0.1425 $0.1469 FY2023-24 FY2024-25 FY2025-26 FY2026-27
E19 - Medium General Service TOU:

Customer Charge/Per Month $146.31 $158.07 $166.63 $173.74 Summer Demand Charge/Per KW:

On-Peak $12.34 $16.24 $20.12 $20.98
Part-Peak $7.40 $9.75 $10.06 $10.49
Summer Energy Charge/Per KWH:

On-Peak $0.2211 $0.2310 $0.2333 $0.2406
Part-Peak $0.1701 $0.1777 $0.1795 $0.1851
Off-Peak $0.1479 $0.1481 $0.1496 $0.1542
Winter Demand Charge/Per KW:

Part-Peak $9.00 $11.11 $13.17 $15.56
Winter Energy Charge/Per KWH:

Part-Peak $0.1681 $0.1692 $0.1709 $0.1762
Off-Peak $0.1344 $0.1410 $0.1425 $0.1469

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Packet Pg. 364 Attachment: Attachment-A Proposed Electric Rates (3962 : Electric Rate Setting) FY2023-24 FY2024-25 FY2025-26 FY2026-27
Electric Non-Metered:

Customer Charge/Per Month $17.89 $21.13 $21.80 $23.89
Energy Charge/Per Connected Watt: $0.1264 $0.1369 $0.1423 $0.1484 Outside Lights Service: FY2023-24 FY2024-25 FY2025-26 FY2026-27 Customer Charge/Per Month
Cobra Head / Month $8.74 $9.07 $9.29 $9.60
Esplanade Pendant / Month $13.48 $13.84 $14.12 $14.56
Nostaligic / Month $13.01 $13.26 $13.48 $13.88
Residential / Month $8.28 $8.48 $8.64 $8.90
FY2023-24 FY2024-25 FY2025-26 FY2026-27
Net Surplus Compensation Rate
Energy Compensation Rate ($/KWH) $0.0888 $0.0888 $0.0888 $0.0888 Green Rate
Additional Energy Charge ($/KWH) $0.0209 $0.0238 $0.0257 $0.0275

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Packet Pg. 365 Attachment: Attachment-A Proposed Electric Rates (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 1 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES

HEALDSBURG ELECTRIC DEPARTMENT

HEALDSBURG, CA

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Packet Pg. 366 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 2 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

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Packet Pg. 367 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 3 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

TABLE OF CONTENTS
D-1 RESIDENTIAL RATE SCHEDULE 4
D-4 RESIDENTIAL ALL ELECTRIC RATE SCHEDULE 6
E-7 RESIDENTIAL TIME OF USE (TOU) 8
C-1 SMALL COMMERCIAL RATE SCHEDULE 11
A-6 SMALL COMMERCIAL TIME OF USE (TOU) 13
P-2 MEDIUM COMMERCIAL DEMAND 16
E-19 LARGE INDUSTRIAL TIME OF USE (TOU) 19
OL - OUTDOOR LIGHTING 23
NM – NON METERED SERVICES 24
NEMA – NET ENERGY METER AGGREGATION 25

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Packet Pg. 368 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 4 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

CITY OF HEALDSBURG
D-1 RESIDENTIAL RATE SCHEDULE

GENERAL DESCRIPTION
This rate schedule is applicable to individually metered residential dwellings, taking single-phase service within Healdsburg’s service territory. This rate is not applicable to the service(s) of common spaces of multi-family units.

RATES AND BASELINE QUANTITIES
The D-1 schedule is based upon a tiered system. The tier 1 energy allotment is equivalent to the daily seasonal baseline multiplied by the number of days in the billing cycle; tier 2 is for all usage above the first tier. The D-1 rates include a monthly customer charge, applicable state and local taxes will be added to the amounts in the table below.

D-1 Electric Rates
Tier 1 $0.1571 / kWh
Tier 2 $0.2119 / kWh
Single Family Monthly Customer Charge $9.34 / Month
Multi-Family Monthly Customer Charge $6.07 / Month
Daily Baseline quantities applicable to the D-1 Rate Schedule are listed below for both the winter and summer season.

D-1 Daily Baseline Quantities
Summer (May thru. October billing) 10.2 kWh / Billing Day Winter (November thru. April billing) 10.8 kWh / Billing Day

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Packet Pg. 369 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 5 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

BILLING SEASONS AND CHANGE OVER DATES
There are two billing seasons, winter and summer. The winter season begins with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May and November seasonal changeover dates will be calculated by multiplying the applicable seasonal daily baseline quantity by the number of days in the billing period.

D-1 RATE MODIFIERS AND DISCOUNTS
The following modifiers and discounts are available to electric services provided under the D-1 rate schedule.

Single-Family vs Multi-Family Month Charge – The monthly charge helps recover fixed costs of maintaining electric service to a residence. The multi-family monthly charge is applicable to residential housing with multiple units with a shared wall. The multi-family fee is typically applicable to duplexes or multiplexes that are rented or leased. All other metered residential housing, including accessory dwelling units, will be charged the single-family monthly customer charge.

Low Income Discount – For qualifying customers, a 25% discount is available to offset a portion of the customer’s energy bill. Customers receiving this discount are required to certify annually that they qualify for this program. See the City of Healdsburg’s CARE program for more information.

Net-Metering – For customers with qualifying self-generation, a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable rate will be applied under the crediting policy of net-metered services. At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a debt will be shown. If after twelve-months the customer is a net-consumer, a bill will be sent showing the balance owed and due. If after a twelve-month period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Customers wishing to take the benefits of net-metering must sign and comply with the City’s interconnection agreement before the net-metering modifier will be applied to their account.

Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, Renewable Energy to match the customer’s monthly energy consumption.

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Packet Pg. 370 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 6 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016 Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

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Packet Pg. 371 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 7 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

CITY OF HEALDSBURG
D-4 RESIDENTIAL ALL ELECTRIC RATE SCHEDULE

GENERAL DESCRIPTION
This rate schedule is applicable to individually metered residential dwellings, taking single-phase service within Healdsburg’s service territory and is only available to customers with permanently installed electric heat as their primary source of heating (e.g., no natural gas or propane furnace).

This rate is not applicable to the service(s) of common spaces of multi-family units.

RATES AND BASELINE QUANTITIES
The D-4 schedule is based upon a tiered system. The tiers 1 energy allotment is equivalent to the daily seasonal baseline multiplied by the number of days in the billing cycle; tier 2 is for all usage above the first tier. The D-4 rates include a monthly customer charge, applicable state and local taxes will be added to the amounts listed below.

D-4 Electric Rates
Tier 1 $0.1571 / kWh
Tier 2 $0.2119 / kWh
Single Family Monthly Customer Charge $9.34 / Month
Multi-Family Monthly Customer Charge $6.07 / Month
Daily Baseline quantities applicable to the D-4 Rate Schedule are listed below for both the winter and summer season.

D-4 Daily Baseline Quantities
Summer (May thru. October billing) 12.0 kWh / Billing Day Winter (November thru. April billing) 12.7 kWh / Billing Day

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Packet Pg. 372 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 8 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

BILLING SEASONS AND CHANGE OVER DATES
There are two billing seasons, winter and summer. The winter season begins with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May and November seasonal changeover dates will be calculated by multiplying the applicable seasonal daily baseline quantity by the number of days in each billing period.

D-4 RATE MODIFIERS AND DISCOUNTS
The following modifiers and discounts are available to electric services provided under the D-4 rate schedule.

Single-Family vs Multi-Family Month Charge – The monthly charge helps recover fixed costs of maintaining electric service to a residence. The multi-family monthly charge is applicable to residential housing with multiple units with a shared wall. The multi-family fee is typically applicable to duplexes or multiplexes that are rented or leased. All other metered residential housing, including accessory dwelling units, will be charged the single-family monthly customer charge.

Low Income Discount – For qualifying customers, a 25% discount is available to offset a portion of the customer’s energy bill. Customers receiving this discount are required to certify annually that they qualify for this program. See the City of Healdsburg’s CARE program for more information.

Net-Metering – For customers with qualifying self-generation, a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable rate will be applied under the crediting policy of net-metered services. At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a debt will be shown. If after twelve-months the customer is a net-consumer, a bill will be sent showing the balance owed and due. If after a twelve-month period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Customers wishing to take the benefits of net-metering must sign and comply with the City’s interconnection agreement before the net-metering modifier will be applied to their account.

Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, Renewable Energy to match the customer’s monthly energy consumption.

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Packet Pg. 373 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 9 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023 Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

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Packet Pg. 374 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 10 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

CITY OF HEALDSBURG
E-7 RESIDENTIAL TIME OF USE (TOU)

RATE SCHEDULE

GENERAL DESCRIPTION
For residential customers who use most of their energy outside of the peak period, a Time of Use (TOU) rate may be beneficial. The E-7 rate schedule is applicable to individually metered residential dwellings, taking single-phase service within Healdsburg’s service territory. This rate is not applicable to the service(s) of common spaces of multi-family units.

The E-7 rate schedule requires specialized metering that may not be installed at the customer’s residence. Where appropriate TOU metering was not previously installed, a one-time fee, per service will be required to reimburse the City’s cost to install, program, and maintain the TOU metering.

Customers taking service under the E-7 rate schedule may request a rate change to any other applicable rate but cannot change rates more than once every twelve months except where there is a mutual agreement between the City and Customer.

RATES
Rates for the E-7 schedule are time-based and vary throughout the day and seasonally. The E-7 rate includes a monthly customer charge. Applicable state and local taxes will be added to the amounts in the table below.

E-7 Electric Rates
Summer Peak Period $0.3273 / kWh
Summer Off Peak Period $0.1723 / kWh
Winter Peak Period $0.2836 / kWh
Winter Off Peak Period $0.1576 / kWh
Single-Family Monthly Customer Charge $15.89 / Month
Multi-Family Monthly Customer Charge $9.53 / Month

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Packet Pg. 375 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 11 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

TIME PERIODS, BILLING SEASONS, AND CHANGE OVER DATES
Rates will vary seasonally with the winter season beginning with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May and November seasonal changeover dates will be calculated by applying the applicable seasonal rates of each billing period. Daylight savings time will affect both the winter and summer seasons. Peak and Off-Peak times are defined below.

E-7 Time Schedules
Summer (May 1
st – October 31st)
Peak Period – 1:30pm to 7:30pm Monday through Saturday
Off-Peak Period – All other times and Holidays*
Winter (November 1
st – April 30th)
Peak Period – 1:30pm to 7:30pm Monday through Saturday
Off-Peak Period – All other times and Holidays*
*The following holidays, consistent with NERC definitions, will be recognized as Off-Peak periods: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas Day.

E-7 RATE MODIFIERS AND DISCOUNTS
The following modifiers and discounts are available to electric services provided under the E-7 rate schedule.

Single-Family vs Multi-Family Month Charge – The monthly charge helps recover fixed costs of maintaining electric service to a residence. The multi-family monthly charge is applicable to residential housing with multiple units with a shared wall. The multi-family fee is typically applicable to duplexes or multiplexes that are rented or leased. All other metered residential housing, including accessory dwelling units, will be charged the single-family monthly customer charge.

Low Income Discount – For qualifying customers, a 25% discount is available to offset a portion of the customer’s energy bill. Customers receiving this discount are required to certify annually that they qualify for this program. See the City of Healdsburg’s CARE program for more information.

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Packet Pg. 376 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 12 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016 Net-Metering – For customers with qualifying self-generation, a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable rate will be applied under the crediting policy of net-metered services. At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a debt will be shown. If after twelve-months the customer is a net-consumer, a bill will be sent showing the balance owed and due. If after a twelve-month period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Customers wishing to take the benefits of net-metering must sign and comply with the City’s interconnection agreement before the net-metering modifier will be applied to their account.

Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, Renewable Energy to match the customer’s monthly energy consumption.

Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

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Packet Pg. 377 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 13 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

CITY OF HEALDSBURG
C-1 SMALL COMMERCIAL RATE SCHEDULE

GENERAL DESCRIPTION
This rate schedule is applicable to non-residential, commercial services with peak demands less than 60kW, ten months out of the last twelve months. This rate is applicable to separately metered services to common areas of multi-family accommodations.

Customers taking service under the C-1 rate schedule must remain on the rate for at least twelve months except where there is a mutual agreement between the City and Customer.

RATES
The C-1 rate schedule is seasonal and varies from the winter months (November 1 st through
April 30th) to the summer months (May 1
st through October 31st). The C-1 rate includes a
monthly customer charge and applicable state and local taxes will be added to the amounts in the table below.

C-1 Electric Rates
Summer Energy Charge $0.1956 / kWh
Winter Energy Charge $0.1508 / kWh
Monthly Customer Charge $29.82 / Month

BILLING SEASONS AND CHANGE OVER DATES
There are two billing seasons, winter, and summer. The winter season begins with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May and November seasonal changeover dates will be calculated by applying the applicable seasonal rate of each billing period.

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Packet Pg. 378 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 14 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016 C-1 RATE MODIFIERS
The following modifiers are available to electric services provided under the C-1 rate schedule.

Net-Metering – For customers with qualifying self-generation, a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable rate will be applied under the crediting policy of net-metered services. At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a debt will be shown. If after twelve months the customer is a net-consumer, a bill will be sent showing the balance owed and due. If after a twelve-month period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Customers wishing to take the benefits of net-metering must sign and comply with the City’s interconnection agreement before the net-metering modifier will be applied to their account.

Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, Renewable Energy to match the customer’s monthly energy consumption.

Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

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Packet Pg. 379 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 15 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

CITY OF HEALDSBURG
A-6 SMALL COMMERCIAL TIME OF USE (TOU)

RATE SCHEDULE

GENERAL DESCRIPTION
For commercial customers who use most of their energy outside of the peak period or have high load factors, a Time of Use (TOU) rate may be beneficial. This schedule is applicable to nonresidential, commercial services with peak demands less than 60kW for ten months out of the last twelve months. This rate is also applicable to separately metered services to common areas of multi-family accommodations.

The A-6 rate schedule requires specialized metering that may not be installed at the customer’s premise. Where appropriate TOU metering was not previously installed, a one-time fee per service will be required to reimburse the City’s cost to install, program, and maintain the TOU metering.

Customers taking service under the A-6 rate schedule may request a rate change to any other applicable rate but cannot change rates more than once every twelve months except where there is a mutual agreement between the City and Customer.

RATES
Rates for the A-6 schedule are time-based and vary throughout the day and seasonally. The A-6 rate includes a monthly customer charge, applicable state and local taxes will be added to the amounts in the table below.

A-6 Electric Rates
Summer Peak Period $0.2917 / kWh
Summer Partial-Peak Period $0.1823 / kWh
Summer Off-Peak Period $0.1402 / kWh
Winter Partial Peak $0.2273 / kWh
Winter Off-Peak Period $0.1508 / kWh
Monthly Customer Charge $35.79 / Month

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Packet Pg. 380 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 16 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

TIME PERIODS, BILLING SEASONS, AND CHANGE OVER DATES
Rates will vary seasonally with the winter season beginning with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May and November seasonal changeover dates will be calculated by applying the applicable seasonal rates of each billing period. Daylight savings time will affect both the winter and summer seasons. Peak, Partial-Peak, and Off-Peak times are defined below.

A-6 Time Schedules
Summer (May 1
st – October 31st)
Peak Period – 2:30pm to 6:30pm Monday through Saturday
Partial-Peak Period – 8:30am to 2:29pm and 6:31pm to 9:30pm Monday through Saturday Off-Peak Period – All other times and Holidays*
Winter (November 1
st – April 30th)
Partial-Peak Period – 8:30am to 9:30pm Monday through Saturday Off-Peak Period – All other times and Holidays*
*The following holidays, consistent with NERC definitions, will be recognized as Off-Peak periods, New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas Day.

A-6 RATE MODIFIERS
The following modifiers are available to electric services provided under the A-6 rate schedule.

Net-Metering – For customers with qualifying self-generation, a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable rate will be applied under the crediting policy of net-metered services. At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a debt will be shown. If after twelve months the customer is a net-consumer, a bill will be sent showing the balance owed and due. If after a twelve-month period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Customers wishing to take the benefits of net-metering must sign and comply with the City’s interconnection agreement before the net-metering modifier will be applied to their account.

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Packet Pg. 381 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 17 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023 Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, Renewable Energy to match the customer’s monthly energy consumption.

Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

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Packet Pg. 382 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 18 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

CITY OF HEALDSBURG
P-2 MEDIUM COMMERCIAL DEMAND

RATE SCHEDULE

GENERAL DESCRIPTION
This rate schedule is applicable to non-residential, commercial services with peak demands that exceed 60kW three months out of the past twelve months. Customers taking service under this rate that do not maintain greater than 60kW peak demands for more than three months out of the past twelve will be changed to the C-1 rate schedule and billed accordingly under the C-1 schedule.

Customers taking service under the P-2 rate schedule may request a rate change to any other applicable rate but cannot change rates more than once every twelve months except where there is mutual agreement between the City and Customer.

RATES
Rates for the P-2 schedule are seasonal and vary from the winter months (November 1 st through
April 30th) to the summer months (May 1
st through October 31st). The P-2 rate includes a
monthly customer charge and peak demand charges. Applicable state and local taxes will be added to the amounts in the table below.

P-2 Electric Rates
Summer Energy Charge $0.1441 / kWh
Summer Peak Demand Charge $10.28 / kW
Winter Energy Charge $0.1344 / kWh
Winter Peak Demand Charge $9.00 / kW
Monthly Customer Charge $121.93 / Month

PEAK DEMAND
The customer’s monthly peak demand is the highest 15-minute average power consumption throughout the billing month. The peak demand is calculated by use of a rolling 15-minute

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Packet Pg. 383 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 19 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023 window. In cases where a customer’s peak demand is determined by the City to be intermittent or subject to frequent fluctuations, a rolling 5-minute average will be used.

BILLING SEASONS AND CHANGE OVER DATES
There are two billing seasons, winter and summer. The winter season begins with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May or November seasonal changeover dates will be calculated by applying the applicable seasonal rates of the billing period.

P-2 RATE MODIFIERS
The following modifiers are available to electric services provided under the P-2 rate schedule.

Net-Metering – For customers with qualifying self-generation a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable energy rate will be applied under the crediting policy of net-metered services. Demand charges apply and are not credited regardless of the direction of energy.

At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a bill will be sent showing the balance owed and due. If after a twelve month period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, Renewable Energy to match the customer’s monthly energy consumption.

Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

Primary Service – Customers with demands of more than 500kW, taking service from a single location, at voltages higher than 12kV will receive a 3% discount on the demand and energy charges. Primary service under the P-2 rate schedule is subject to the customer’s ability to meet and maintain the interconnection requirements of the City.

The City retains the right to change its line voltage (primary service voltage) at any time after providing reasonable advance notice to any customer receiving a discount hereunder and affected by such change. The customer then has the option to change their system so as to receive service

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Packet Pg. 384 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 20 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016 at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to the City’s maximum kVA size limitation.

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Packet Pg. 385 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 21 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

CITY OF HEALDSBURG
E-19 LARGE INDUSTRIAL TIME OF USE (TOU)

RATE SCHEDULE

GENERAL DESCRIPTION
For large commercial customers that can shift a significant portion of their energy to off-peak and partial-peak periods or customers with high load factors a Time of Use (TOU) rate may be beneficial. The E-19 rate schedule is a TOU rate applicable to non-residential, commercial services with peak demands that exceed 60kW three months out of the past twelve months.

Customers taking service under this rate that do not maintain greater than a 60kW peak demand for more than three months out of the past twelve the customer will be changed to the A-6 rate schedule and billed according to the A-6 rate schedule.

The E-19 rate schedule requires specialized metering that may not be installed at the customer’s premise. Where appropriate TOU metering was not previously installed, a one-time fee, per service will be required to reimburse the City’s cost to install, program, and maintain the TOU metering.

Customers taking service under the E-19 rate schedule may request a rate change to any other applicable rate but cannot change rates more than once every twelve months expect where there is mutual agreement between the City and Customer.

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Packet Pg. 386 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 22 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016 RATES
Rates for the E-19 schedule are time-based and vary throughout the day and seasonally. The E19 rate includes demand charges and a monthly customer charge. Applicable state and local taxes will be added to the amounts in the table below.

E-19 Electric Rates
Summer Peak Demand Charge $12.34 / kW
Summer Partial-Peak Demand Charge $7.40 / kW
Summer Peak Energy Charge $0.2211 / kWh
Summer Partial-Peak Energy Charge $0.1701 / kWh
Summer Off-Peak Energy Charge $0.1479 / kWh
Winter Partial-Peak Demand Charge $9.00 / kW
Winter Partial-Peak Energy Charge $0.1681 / kWh
Winter Off-Peak Energy Charge $0.1344 / kWh
Monthly Customer Charge $146.31 / Month

PEAK DEMAND
The customer’s monthly peak demands for each time period is the highest 15-minute average power consumption of the time period. The peak demand is calculated by use of a rolling 15- minute window. In cases where a customer’s peak demand is determined by the City to be intermittent or subject to frequent fluctuations a rolling 5-minute average will be used.

The E-19 rate contains three time periods for summer and two time periods for winter.

Customers under the E-19 rate will be billed for each demand charge for each time period.

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Packet Pg. 387 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 23 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

TIME PERIODS, BILLING SEASONS, AND CHANGE OVER DATES
Rates will vary seasonally with the winter season beginning with the first billing cycle that includes any day in the month of November. The summer season begins with the first billing cycle that includes any day in the month of May. Monthly bills that include May and November seasonal changeover dates will be calculated by applying the applicable seasonal rates of each billing period. Daylight savings time will affect both winter and summer rates. Peak, PartialPeak, and Off-Peak times are defined below.

E-19 Time Schedules
Summer (May 1
st – October 31st)
Peak Period – 2:30pm to 6:30pm Monday through Saturday
Partial-Peak Period – 8:30am to 2:29pm and 6:31pm to 9:30pm Monday through Saturday Off-Peak Period – All other times and Holidays*
Winter (November 1
st – April 30th)
Partial-Peak Period – 8:30am to 9:30pm Monday through Saturday Off-Peak Period – All other times and Holidays*
*The following holidays, consistent with the NERC definitions, will be recognized as Off-Peak periods; New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas Day.

E-19 RATE MODIFIERS AND DISCOUNTS
The following modifiers are available to electric services provided under the E-19 rate schedule.

Net-Metering – For customers with qualifying self-generation a net-metered rate modifier is available to promote the development of renewable energy. The customer’s applicable energy rate will be applied under the crediting policy of net-metered services. Demand charges apply and are not credited regardless of the direction of energy.

At the end of each billing period, excess kWh will be converted to an equivalent bill credit based upon that billing period’s kWh rate. If at the end of the billing period, the customer owes the utility a payment, a bill will be sent showing the balance owed and due. If after a twelve month

8.A.c
Packet Pg. 388 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 24 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016 period the customer was a net-generator of energy, each surplus kWh will be credited according to the customer’s Net-Surplus credit election.

Green Rate – For customers wishing to promote the development and use of renewable energy, the City of Healdsburg offers a Green Rate. Under the Green Rate, the City will procure, on the customer’s behalf, additional Renewable Energy to match the customer’s monthly energy consumption. Customers choosing the Green Rate will incur an additional $0.0209 per kWh for every kWh consumed during the billing period.

Primary Service – Customers with demands more than 500kW, taking service from a single location, at voltages higher than 12kV will receive a 3% discount on the demand and energy charges. Primary service under the E-19 rate schedule is subject to the customer’s ability to meet and maintain the interconnection requirements of the City.

The City retains the right to change its line voltage (primary service voltage) at any time after providing reasonable advance notice to any customer receiving a discount hereunder and affected by such change. The customer then has the option to change their system so as to receive service at the new line voltage or to accept service (without voltage discount) through transformers to be supplied by the City subject to the City’s maximum kVA size limitation.

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Packet Pg. 389 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 25 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

CITY OF HEALDSBURG

OL - OUTDOOR LIGHTING

RATE SCHEDULE

GENERAL DESCRIPTION
This schedule provides service to un-metered outdoor lighting provided to streets, private parking lots, other publicly dedicated areas and/or paths readily accessible to City personnel, vehicles, and equipment. The OL service is not applicable where no or inadequate City owned facilities exist for the mounting of City approved light fixtures. This schedule is applicable to lighting service rendered to the City for lighting public streets. The monthly usage charge includes the energy required for the lighting, as well as the cost and replacement of City approved lamps, fixtures, braces, wiring, and sensors.

Customers taking service under the OL rate schedule must remain on the rate for at least twelve months. Once service is established, changes of lamp wattage will not be allowed unless initiated by the City.

RATES
Rates for the OL rate schedule is based upon the Light Emitting Diode (LED) lamp wattage and expected maintenance and replacement costs. Only LED lighting is available under this rate.

Applicable state and local taxes will be added to the amounts in the table below.

OL Electric Rates
Cobra Head / Month $8.74 / Month
Esplanade Pendant / Month $13.48 / Month
Nostalgic / Month $13.01 / Month
Residential Post Top / Month $8.28 / Month

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Packet Pg. 390 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 26 OF 27
RESOLUTION XX-201X EFFECTIVE FIRST BILLING CYCLE JULY 2016

CITY OF HEALDSBURG
NM – NON METERED SERVICES

RATE SCHEDULE

GENERAL DESCRIPTION
This schedule provides service to un-metered electric services, where the connected nameplate wattage does not exceed 900 watts, for utilities or government agencies requiring limited monthly energy usage. This schedule is not applicable to entities that do not provide public utility or governmental services such as cable communications, telephone and/or cell service, gas, electric, or water services. The monthly usage charge does not include any annual attachment fees for utility pole space.

Customers taking service under the NM rate schedule must remain on the rate for at least twelve months. Once service is established, changes to the connected equipment must be approved by the City prior to installation. As a condition of taking services under the non-metered rate schedule, the Customer will provide access to the City to, at any time, inspect, and audit all equipment connected. Further, at the City’s sole discretion usage and monthly charges for nonmetered accounts may be billed in advance on a monthly, quarterly, or annual basis.

RATES
The NM rate schedule is based upon the continuous use of the connected nameplate wattage. If the total connected load exceeds 900 watts, the customer must take service under an applicable metered commercial rate. If, upon the City’s inspection, the connected load exceeds 900 watts the customer’s service will be converted to a metered service at the customer’s sole expense and billed based upon the C-1 commercial rate. Applicable state and local taxes will be added to the amounts in the table below based upon the City’s estimated monthly usage.

NM Electric Rates
Monthly Customer Charge $17.89 / Month
Monthly Energy Charge per Connected Watt $0.1264 / Connected Watt

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Packet Pg. 391 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

ELECTRIC RATE SCHEDULES
PAGE 27 OF 27
RESOLUTION XX-2023 EFFECTIVE FIRST BILLING CYCLE NOVEMBER 2023

NET-ENERGY METER AGGREGATION (NEMA) RATE MODIFIER
Net-Energy Meter Aggregation – For customers who own or lease multiple adjacent properties with at least one solar generating facility, the NEMA rate allows aggregation of all electric services of the adjacent properties. Under NEMA, the electric meter of an aggregated generating facility records separately both the energy received by the City from the generating unit and the energy delivered to the customer by the City. At the end of each billing cycle, the generation received by the City is valued at the City’s current excess generation rate and provides a bill credit. The bill credit is then allocated proportionally to each of the aggregated properties based upon each electric services usage.

Any energy delivered to the customer’s aggregated electric services is billed at the normally applicable electric rate. Generation that is consumed onsite helps to lower the customer’s overall energy bill. The Public Benefits Charge and California Energy Surcharge are applied to any City delivered energy prior to applying the bill credit.

The NEMA program requires special billing manual meter reads. To cover these costs each generating facility of an aggregation is assessed a monthly fee equivalent to one-half the standard labor rate for the Electric Department (approved labor rates are listed in the City Master Fee Schedule).

Under the NEMA program applicable demand charges apply to the generating facility and aggregated properties. Demand fees are applied regardless of the direction of energy.

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Packet Pg. 392 Attachment: Attachement-B Proposed Electric Rate Schedule FY2023-24 (3962 : Electric Rate Setting) 4856
-1674-6855 v1
Electric Cost of Service Study
Draft Report
City of Healdsburg
Add Date

P R E P A R E D B Y E E S C O N S U L T I N G
May 25, 2023

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Packet Pg. 393 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) 4856-1674-6855 v1 570 Kirkland Way
◼ Suite 100 ◼ Kirkland, WA 98033 ◼
425-889-2700
◼ Fax 866-611-3791 ◼ www.eesconsulting.com
G e o r g i a
◼
Te x a s
◼ A l a b a m a ◼
N e w H a m p s h i r e
◼
W i s c o n s i n
◼
F l o r i d a
◼ M a i n e ◼ W a s h i n g t o n ◼ C a l i f o r n i a Amber Gschwend, Managing Director
[email protected]
direct 425-655-1042
May 25, 2023
Mr. Terry Crowley
City of Healdsburg
401 Grove Street
Healdsburg, California 95448
SUBJECT: Cost of Service Analysis– Draft Report
Dear Mr. Crowley:

It is with pleasure that EES Consulting (EES), a GDS Associates Company, submits this Cost of Service Analysis Report for the City of Healdsburg electric utility (City).

We appreciate all of the help you and your staff have provided in conjunction with this study. Please feel free to contact me directly with any questions or comments.

Very truly yours,
Amber Gschwend
Managing Director, EES Consulting

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Packet Pg. 394 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) CITY OF HEALDSBURG ELECTRIC UTILITY Cost of Service Analysis– Draft Report 4856-1674-6855 v1 prepared by
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Contents
1 EXECUTIVE SUMMARY...................................................................................................1

1.1 Revenue Requirement.......................................................................................................................................1

1.2 Cost of Service Study .........................................................................................................................................4

1.3 Recommendations ..............................................................................................................................................6 2 OVERVIEW OF RATE SETTING PRINCIPLES..................................................................7

2.1 Overview and Organization of Report.........................................................................................................7

2.2 Overview of the Analyses .................................................................................................................................8

2.3 Types of Utilities...................................................................................................................................................8

2.4 Overview of Revenue Requirement Methodologies ..............................................................................8

2.5 Overview of Cost Allocation Procedures ....................................................................................................9 3 DEVELOPMENT OF THE REVENUE REQUIREMENT ...................................................11

3.1 Overview of The City of Healdsburg Electric Utility Revenue Requirement Methodology .. 11

3.2 Development of the Projected Load Forecast and Forecast Revenues ....................................... 11

3.3 Development of Power Supply Costs ....................................................................................................... 12

3.4 Other Operations and Maintenance Expenses...................................................................................... 12

3.5 Payment in Liue of Taxes............................................................................................................................... 13

3.6 Interest and Debt Service.............................................................................................................................. 13

3.7 Rate Funded Capital Expenses .................................................................................................................... 13

3.8 Other Revenues................................................................................................................................................. 13

3.9 Other Contributions ........................................................................................................................................ 13

3.10 Summary of Revenue Requirement........................................................................................................ 14

3.11 Recommendation........................................................................................................................................... 14 4 COST OF SERVICE ANALYSIS.......................................................................................16

4.1 COSA Definition and General Principles.................................................................................................. 16

4.2 General Ratemaking Principles.................................................................................................................... 17

4.3 Functionalization of Costs............................................................................................................................. 17

4.3.1 Standard Functionalization.....................................................................................................18

4.3.2 City of Healdsburg Functionalization Method.......................................................................18

4.4 Classification of Costs..................................................................................................................................... 18

4.4.1 Standard Classification............................................................................................................19

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4.4.2 City of Healdsburg Classification Method..............................................................................19

4.5 Allocation of Costs........................................................................................................................................... 21

4.5.1 City of Healdsburg Allocation Methodology..........................................................................21

4.6 Review of Customer Classes of Service.................................................................................................... 23

4.7 Major Assumptions of the Cost of Service Study................................................................................. 23

4.8 Cost of Service Results ................................................................................................................................... 23 5 COSA UNIT COSTS........................................................................................................25

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Packet Pg. 396 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) CITY OF HEALDSBURG ELECTRIC UTILITY Cost of Service Analysis– Draft Report 4856-1674-6855 v1 prepared by EES CONSULTING 1
1 Executive Summary
The City of Healdsburg, (City) retained EES Consulting (EES) to update its most recent Cost of Service study as part of its ongoing efforts to maintain fiscally prudent and fair rates for its electric customers. The purpose of this report is to discuss the data inputs, assumptions and results that were part of developing the rate study.

A comprehensive rate study generally consists of three separate, yet interrelated, analyses. These three analyses are revenue requirement, cost of service and rate design. This report details the revenue requirement and cost of service studies.

1.1 REVENUE REQUIREMENT
A revenue requirement analysis compares the overall revenues of the utility to its expenses and helps determine the overall adjustment to rate levels that is required. For this analysis, a “cash basis” method was used for determining the City’s revenue requirement. Projected fiscal years (FY) 2023 and FY 2024 operating expenses used to determine the revenue requirement in the COSA were provided by the City.

A base case was defined to develop the COSA. This base case assumed the following:
◼ Historic year is FY 2022 (July 2021 – June 2022).
◼ Test year/allocation year is FY 2024.
◼ The customer classes included in the COSA are: Residential, Small Commercial (C-1), Large Commercial (P-2, E-19), Public Lighting (city owned), and Outdoor Lighting (OL). ◼ The FY 2022 loads, including monthly energy consumption, number of customers and demand, was provided by the City. The FY 2024 load forecast includes projected load growth of -0.8% for all customer classes in FY 2024 and then 0.4% annually for FY 2025 through FY 2027. Historic and projected loads for FY 2022-FY 2027 are shown below in Figure 1-1.

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FIGURE 1-1: CITY OF HEALDSBURG ELECTRIC RETAIL SALES PROJECTIONS BY CUSTOMER CLASS ◼ Projected retail revenues for the forecast period were calculated based on projected loads and the City’s current electric retail rates.
◼ Projected and historic non-power costs were provided by the City for FY 2022 through 2024. Expenses were escalated at 3% after 2024 unless specific cost categories were known to have differing rates of inflation (e.g. equipment, power, transmission costs, etc.). ◼ Projected power supply costs are based on a power supply cost forecast provided by NCPA for the period 2024 through 2027. On a dollar per megawatt-hour basis power supply costs (energy, transmission) are projected to range between $105/MWh to $116/MWh over the study period.

Table 1-1 below shows the projected power supply costs included in the COSA. 0 10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
2023 2024 2025 2026 2027
kWh
Residential Commercial C-1 Medium Commercial P-2 Industrial Streetlighting Outdoor Lighting

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Packet Pg. 398 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) CITY OF HEALDSBURG ELECTRIC UTILITY Cost of Service Analysis– Draft Report 4856-1674-6855 v1 prepared by EES CONSULTING 3
TABLE 1-1: PROJECTED POWER SUPPLY COSTS
FY22 FY23 FY24 FY25 FY26 FY27
NCPA Plants -$322,442 -$727,672 $2,548,379 $2,390,205 $2,377,303 $2,220,999 NCPA Western -$70,534 $107,045 $344,155 $372,584 $388,312 $396,983 Market Power Purchases $5,585,112 $6,952,867 $8,074,203 $7,175,224 $7,109,817 $6,457,119 Gas Power Generation $0 $554,293 $2,826,159 $2,702,590 $2,842,289 $2,647,136 NCPA Transmission $2,181,787 $2,459,790 $2,585,923 $2,634,581 $2,721,821 $2,832,103 Management Services $367,357 $455,342 $425,511 $436,288 $445,489 $454,532 Solar Rebates $56,703 $60,000 $60,000 $66,000 $71,280 $75,557 Power Sales Revenue -$44,375 -$391,615 -$7,690,527 -$6,792,606 -$7,194,698 -$6,274,354 Total Purchased Power $7,753,609 $9,470,050 $9,173,804 $8,984,866 $8,761,614 $8,810,075 Table 1: shows the actual FY2022 costs and forecasted costs for FY2023 through FY2027. Note that NCPA’s forecast includes the net cost or revenue from NCPA generating resources optimized in the CAISO market.

As shown below, power supply costs are 54% of projected FY 2024 total expenses. Figure 1-2 below shows a breakdown of the projected $14 million in FY 2024 total expenses.

FIGURE 1-2: PROJECTED FY 2024 EXPENSES
Total FY 2023 revenues, including other revenue (non-retail rate revenue) of $0.2 million, are projected to be $12 million. An increase in retail rate revenue is required in FY 2024. Other revenues include miscellaneous service revenues, pole rental fees, dividends and interest, and line extension revenues.

A summary of the FY 2023- FY 2027 revenue requirements are shown below in Table 1-2.

Power Supply &
Generation
59%
Distribution
10%
Customer Accounts
and Services
1%
Administration and
General
28%
Capital Projects
Funded From Rates
0%
PILOT
1%
Debt Service
1%

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TABLE 1-2: SUMMARY OF THE REVENUE REQUIREMENT
Fiscal Year: 2023 2024 2025 2026 2027
Planned Rate
Adjustment

16.0% 14.0% 8.0% 7.0%
Rate Revenue with Rate
Adjustment $12,150,672 $13,995,172 $16,010,818 $17,352,755 $18,633,055 Other Revenue $232,519 $238,519 $245,675 $253,045 $260,636 Total Revenue $12,383,191 $14,233,691 $16,256,493 $17,605,800 $18,893,691 Purchased Power $9,470,050 $9,173,804 $8,984,866 $8,761,614 $8,810,075 O&M plus A&G $5,944,027 $6,101,875 $6,328,791 $6,108,426 $5,844,973 PILOT $186,777 $191,447 $197,190 $203,106 $209,199
Principal & Interest
Payment
$253,143 $122,918 $122,918 $122,918 $122,918
Capital Improvement
Program from Rates $35,000 $62,500 $1,410,000 $4,488,750 $900,000 Total Expenses $15,888,997 $15,652,544 $17,043,765 $19,684,814 $15,887,164 Change in Working
Capital ($3,505,806) ($1,418,853) ($787,272) ($2,079,014) $3,006,527 Given the assumptions detailed above, the results show that, under current retail rates, the City is not collecting sufficient revenue to meet projected expenses in FY2023-FY2027. To balance the needed rate increases across the four-year period, the proposed rate adjustment utilizes approximately $4.2 million in reserves. It is estimated that by the end of FY 2027, $3 million of this amount will be transferred back to the reserve fund. By the end of the study period, the electric utility meets the 50% reserve requirement authorized by Resolution 112-2019.

1.2 COST OF SERVICE STUDY
A cost of service study is concerned with the equitable allocation of the revenue requirement to the various customer classes of service. As is standard procedure for cost of service analyses, the revenue requirement for the City was functionalized, classified and allocated.

A COSA can be performed using embedded costs or marginal costs. Embedded costs generally reflect the actual costs incurred by the utility and closely track the costs kept in its accounting records. Marginal costs reflect the cost associated with adding a new customer and are based on costs of facilities and services if incurred at the present time. This study uses an embedded COSA as its standard methodology.

Generally, there are two methodologies that can be used to classify distribution costs: 100 percent demand and minimum system. The 100 percent demand methodology assumes that the distribution system is built to meet the non-coincident peak. Therefore, distribution costs using this method are classified as 100 percent demand-related.

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Specific distribution costs are sometimes split between demand and customer according to a minimum system approach. This approach reflects the philosophy that the system is in place in part because there are customers to serve throughout the service territory, and that a minimally sized distribution system is needed to serve these customers even if they only use 1 kilowatt-hour (kWh) of energy per year.

The concept follows that any costs associated with a system larger than this minimal size are due to the fact that customers “demand” a delivery quantity greater than the minimum unit of electricity and that therefore, those costs should be treated as demand-related.

Because the residential class tends to have a higher share of the number of customers compared to its share of non-coincident peaks, the minimum system methodology tends to allocate more costs to the residential customer class and customer charges tend to be higher than with the 100 percent demand methodology. Demand and customer allocation factors were derived for the minimum system case using data from other public utilities. The study assumes that 60% of the system is in place due to customer demand while 40% of the distribution system plant value is in place due to the need to serve the number of customers. Greater detailed plant asset data would be needed in order to develop a minimum system analysis specific to the City.

This analysis utilizes the minimum system approach for cost allocation. This methodology is typical for utilities in California reflecting a trend toward improving the recovery of fixed costs through monthly charges to gain financially prudent cost recovery across all customer types.

TABLE 1-3: SUMMARY OF COST OF SERVICE ANALYSIS FY 2024
Present Rate
Revenues
Net Revenue
Requirement
Surplus/(Deficiency)
in Present Rates
Rate Increase
(Decrease)
Residential D-1, D-4 & E-7 $4,867,033 $5,195,574 ($328,541) 7% Small Commercial, C-1 & A-6 $3,512,553 $3,946,937 ($434,384) 12% Large Commercial P-2, E-19 $3,630,294 $4,673,709 ($1,043,415) 29% Outdoor Lighting $54,923 $176,857 ($121,934) 222%
TOTAL $12,064,804 $13,993,077 ($1,928,274) 16%
Present Rate
Revenues
Net Revenue
Requirement
Surplus/(Deficiency)
in Present Rates
Rate Increase
(Decrease)
Residential D-1, D-4 & E-7 $4,867,033 $5,195,574 ($328,541) 7% Small Commercial, C-1 & A-6 $3,512,553 $3,946,937 ($434,384) 12% Large Commercial P-2, E-19 $3,630,294 $4,673,709 ($1,043,415) 29% Outdoor Lighting $54,923 $176,857 ($121,934) 222%
TOTAL $12,064,804 $13,993,077 ($1,928,274) 16%
The City pays for all City Facility electric usage based on current established rates. The City currently funds street and area lighting through electric retail revenue. This study includes the cost of repair and replacementin the Outdoor Lighting class and assumes city owned and maintained street and area lighting will be paid for by the City at the same rate as outdoor lighting charged to customers. The revenue requirement for this class is estimated at $176,857 in fiscal year 2024.

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When examining the results shown above in Tables 1-3, it is important to note that the inter-class cost allocations are based on load data estimates and usage pattern assumptions. Therefore, utilities often elect not to make rate modifications when deviations are within 10 percent.

1.3 RECOMMENDATIONS
Based on the projected revenue requirement and COSA analysis, the following recommendations are made:
◼ Using current rates, the City is not collecting sufficient revenues compared to the projected FY 2024 revenue requirement and, as such, an increase in total retail revenue is required. ◼ This study developed a rate adjustment plan over a 4-year forecast period. During this time, rates are adjusted so that the City can mitigate impacts through use of reserves as well as recover the reserves by the end of the planning period
◼ Use the minimum system methodology for distribution system cost allocation to improve recovery of fixed costs
◼ Several customer classes are outside of the +/- 10% band from their cost of service. It is recommended that the rate adjustment by class gradually move each customer class to within 10% of its cost of service.
◼ This study shows that fixed monthly costs should be increased slowly over time so that the electric utility is able to recover fixed costs while mitigating potential cost shifts of low users.

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2 Overview of Rate Setting Principles
EES was retained by the City of Healdsburg to perform a comprehensive electric cost of service and rate study. Performing an electric rate study is necessary to assure that the City’s electric rates continue to recover the cost of operations, fund planned capital projects, and are structured to be fair, equitable and competitive.

In conducting this study, three inter-related analyses were performed. The first analysis performed was a revenue requirement analysis. This analysis examines the various sources and applications of funds for the utility and determines the overall revenue (retail rate) adjustment required of the utility. The next analysis developed is a cost of service analysis. The cost of service analysis is used to determine the fair and equitable allocation of the total revenue requirement to the various customer classes of service. The cost of service results in unit costs that will assist with a rate design analysis.

2.1 OVERVIEW AND ORGANIZATION OF REPORT
In developing electric rates for the City, a major goal of the study is to develop cost-based rates that meet the City’s electric utility revenue requirement. It is important to understand that revenue requirement consists of both operational expenses and capital costs. Failure to collect the full revenue requirement may lead to a system that is more expensive to operate in the long run, and more susceptible to periodic outages and failures.

This report is organized such that it follows the steps taken in analyzing and developing the City’s electric utility cost of service. Contained in this section is a generic discussion of the theory and financial principles behind setting rates. This is followed by a section discussing the development of the revenue requirement analysis for the City’s electric utility. The next section discusses the cost of service study and the results of that process.

The setting of electric utility rates that are “fair and equitable” is a complex process. This process is directed, however, by “generally accepted methodologies” that can be used as a guide in developing the City’s electric rates. At the same time, there are often a number of financial principles or guidelines that must be taken into consideration during this process. Therefore, the setting of electric rates that are “fair and equitable” is an integration of these generally accepted methodologies and any related financial policies or specific considerations from the City.

The purpose of this section of the report is to provide a brief overview of the basic fundamentals of cost identification and allocation for purposes of developing electric rates. From this base-level of knowledge, more insight and understanding can be obtained from the following sections of the report that discuss the specifics of the review of the City’s electric utility allocated costs.

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2.2 OVERVIEW OF THE ANALYSES
As discussed previously, there are a number of “generally accepted methodologies” for allocating costs for ratemaking purposes. However, all of these methodologies share the same basic framework. That is, in allocating electric costs two separate yet interrelated analyses are generally performed. It is within these two separate analyses that different methodologies exist. The two analyses contained within the basic framework for allocating electric costs are revenue requirement analysis and cost of service analysis.

The revenue requirement analysis reviews the various sources of funds and applications of funds for the utility.

Within the next step of the study, the cost of service analysis takes the results of the revenue requirement analysis and attempts to equitably allocate those costs to the various customer classes of service (e.g., residential, commercial, etc.). This analysis provides a determination of the level of revenue responsibility of each class of service and the adjustments required to meet the cost of service.

2.3 TYPES OF UTILITIES
As noted above, there are different methodologies that exist for setting electric rates. The first distinction often made in developing a methodology is the type of utility that is attempting to set the rates. Utilities are generally divided into two types by ownership—public and private utilities.

Public utilities are generally owned by a municipality, cooperative, county or special district, and are operated on a not-for-profit basis. Public utilities are generally capitalized by issuing debt and soliciting funds from customers through direct capital contributions or user rates. Through statute and/or the lack of profit motive, public utilities do not pay state and federal income taxes. Finally, a public utility is usually regulated by a publicly elected or appointed City Council, Board of Commissioners or Board of Trustees.

As a point of reference, the City is a municipal utility regulated by the City Council.

In contrast, private electric utilities are capitalized by issuing debt or equity (stock) to the general public.

The owners of the private utility are its equity contributors, or shareholders. Private utilities are taxable entities, and finally, they are generally regulated by state public utility commissions. PG&E is an example of a private electric utility.

These differences in ownership and other characteristics often lead to two different methods for reviewing revenue requirement needs. A more detailed discussion of the different methodologies that may be used is provided below.

2.4 OVERVIEW OF REVENUE REQUIREMENT METHODOLOGIES
By virtue of differences noted above for public versus private utilities, revenue requirements are based upon different elements or methodologies. Most private utilities use what is known as a “utility” or “accrual” basis of determining revenue requirement or setting rate levels. This convention calculates a utility’s annual revenue requirement by aggregating a period’s operation and maintenance (O&M) expenses, taxes, depreciation expense and a “fair” return on investment. Operating expenses include the labor, materials, supplies, etc., that are needed to keep the utility functioning. Private utilities must also pay state and federal income taxes, along with any applicable property, franchise, sales or other forms of taxes. Next, depreciation expense is a means of recouping the cost of capital facilities over the useful lives

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of those facilities as well as generating internal cash. Finally, a return on the capital invested pays for the utility’s interest expense on indebtedness, provides funds for a return to the utility’s equity holders in the form of dividends and leaves a balance for retained earnings and cash flow purposes.

In contrast to the “utility” or “accrual” method of developing revenue requirement for private utilities, a different method of determining annual revenue requirement is often used for public utilities. The convention used by most public utilities is called the “cash basis” of cost accounting. As the name implies, a public utility aggregates its cash expenditures to determine its total revenue requirement for a specified period of time. This methodology conforms nicely to most public utility budgetary processes and is a very straightforward and easily understood calculation.

Under the “cash basis” approach, there are four component costs. They are operation and maintenance expenses, taxes, debt service, and capital improvements funded from rates. The operating portion of the revenue requirement, i.e., O&M and taxes, are similar under either methodology. The major difference between the two methodologies is the way in which capital costs are viewed and handled. Capital costs under the cash basis approach are calculated by adding debt service to capital improvements financed with rate revenues. A utility’s depreciation expense is often used as a measure of the reasonable level of funding required from rates for capital improvement activities. Depreciation expense represents the current investment of the utility and that portion that has become worn out or obsolete and must be renewed or replaced. It should further be noted that the two portions of the capital expense component (principal and interest) are necessary under the cash basis approach because utilities often cannot finance all capital facilities with long-term debt.

Table 2-1 compares the cash and utility accounting conventions.

TABLE 2-1: CASH VS. UTILITY BASIS COMPARISON
Cash Basis Utility (Accrual) Basis
+ O&M Expense + O&M Expense
+ Taxes or Payment in Lieu of Taxes + Taxes
+ Capital Improvements Financed with
Operating Revenues (Depreciation Expense)
+ Depreciation Expense
+ Debt Service (Principal & Interest) + Interest Expense + Margin
 = Revenue Requirement  = Revenue Requirement
For this study, a cash basis was used to determine the utility’s revenue requirement.

2.5 OVERVIEW OF COST ALLOCATION PROCEDURES
After the total revenue requirement has been determined, it is allocated to the various customer classes of service based upon a fair and equitable methodology that reflects the cost-causal relationships for the production and delivery of the services. This analytical exercise usually takes the form of a “cost-ofservice” study. A cost of service study begins by “functionalizing” a utility’s revenue requirement as power supply, transmission, distribution and customer. Next, the functionalized costs are “classified” to demand-, energy- and customer-related component costs. Demand-related costs are those that the utility incurs to meet a customer’s maximum instantaneous usage requirement and is usually measured in kilowatts (kW). Energy-related costs are those that vary directly with longer periods of consumption and are usually measured in kWh. Customer-related costs are those that vary with the number and type of customers served. These three component costs are then “allocated” to each class of service based upon

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the most equitable method available for each specific cost. At that point, the revenue requirement has been allocated to each class of service and a determination of the necessary revenue adjustments between classes of service can be made.

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3 Development of the Revenue Requirement
This section of the report presents the development of the electric revenue requirement for the City’s electric utility. Simply stated, a revenue requirement analysis compares the overall revenues of the utility to its expenses and determines the overall adjustment to rate levels that is required.

3.1 OVERVIEW OF THE CITY OF HEALDSBURG ELECTRIC UTILITY REVENUE

REQUIREMENT METHODOLOGY
In developing the revenue requirement, a number of decisions must be made regarding the basic methodology to be used. As discussed in the previous section of the report, the first decision the City’s electric utility must make is the method of accumulating costs. The City utilized the “cash basis” approach for determining revenue requirement. In summary form, components to its revenue requirement include the elements shown in Table 3-1.

TABLE 3-1: ELEMENTS OF A CASH BASIS REVENUE REQUIREMENT + Operation and Maintenance Expenses (O&M)
✓Power Supply Expense
✓Distribution Expense
✓Customer Accounting & Service Expense
✓Administrative and General Expense
+ Debt Service Costs(Principal + Interest)
+ Rate Funded Capital
+ PILOT
= Total Revenue Requirement
− Other Revenue Sources
 = Net Revenues Required from Rates
From this basic analytical framework, the next step in determining the revenue requirement methodology is to select a time period over which to review revenue and expenses. In the case of the City of Healdsburg, a fiscal year test period was utilized (July through June). FY 2022 was chosen as the test period for the cost of service study. The City provided projected FY 2023-2024 costs. Revenues from retail rates and purchased power costs were forecast based on forecast FY 2024 customer usage.

3.2 DEVELOPMENT OF THE PROJECTED LOAD FORECAST AND FORECAST REVENUES The FY 2024 load forecast, including monthly energy consumption, number of customers and billed demand, was provided by the City. The FY 2024 load forecast includes projected load growth of 0.4% for all classes compared with FY 2023 projections. While Healdsburg continues to develop, new solar projects and efficiency programs reduce or eliminate increases in overall kilowatt-hour sales.

The load forecast is a key component of a cost of service study as it is used to allocate costs to the customer classes and provides the units of consumption used to design final rates. Line losses were calculated using total FY 2022 system purchases and total FY 2022 customer sales. For FY 2022, line losses on the secondary system were assumed to be 2% while line losses on the primary system were assumed to be 3%. For non-demand metered classes, load factors and coincident factors were determined using PG&E load profile data for each customer class.

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Forecasted retail revenues were calculated for FY 2024 and beyond using current retail rate schedules and forecast loads.

3.3 DEVELOPMENT OF POWER SUPPLY COSTS
The City purchases wholesale power as a member of NCPA. Projected power and transmission costs were provided by NCPA through FY 2027. As with most electric utilities, power supply is the City’s electric utility’slargest operating expense. Approximately $9.2 million, or 54 percent of the FY 2024 total revenue requirement are power supply and transmission costs as shown in Table 3-2.

TABLE 3-2: PROJECTED POWER SUPPLY COSTS
FY22 FY23 FY24 FY25 FY26 FY27
NCPA Plants -$322,442 -$727,672 $2,548,379 $2,390,205 $2,377,303 $2,220,999 NCPA Western -$70,534 $107,045 $344,155 $372,584 $388,312 $396,983 Market Power Purchases $5,585,112 $6,952,867 $8,074,203 $7,175,224 $7,109,817 $6,457,119 Gas Power Generation $0 $554,293 $2,826,159 $2,702,590 $2,842,289 $2,647,136 NCPA Transmission $2,181,787 $2,459,790 $2,585,923 $2,634,581 $2,721,821 $2,832,103 Management Services $367,357 $455,342 $425,511 $436,288 $445,489 $454,532 Solar Rebates $56,703 $60,000 $60,000 $66,000 $71,280 $75,557 Power Sales Revenue -$44,375 -$391,615 -$7,690,527 -$6,792,606 -$7,194,698 -$6,274,354 Total Purchased Power $7,753,609 $9,470,050 $9,173,804 $8,984,866 $8,761,614 $8,810,075

3.4 OTHER OPERATIONS AND MAINTENANCE EXPENSES
Projected FY 2023-2024 expenses were provided by the City based on approved budgets and forecasts.

Projected operating costs were provided for distribution, customer service and accounting and administrative and general expenses categories. Table 3-3 shows the forecast for non-power operation and maintenance expenses (O&M). Overall, these expenses are forecast to remain fairly stable over the study period.

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TABLE 3-3: PROJECTED NON-POWER O&M (MILLIONS)
FY23 FY24 FY25 FY26 FY27
Distribution $1,519,763 $1,604,222 $1,677,446 $1,298,029 $869,971 Customer Accounts and
Services $129,763 $134,586 $139,910 $145,446 $151,201
Administration and General $4,294,501 $4,363,067 $4,511,434 $4,664,951 $4,823,801 Total $5,944,027 $6,101,875 $6,328,791 $6,108,426 $5,844,973

3.5 PAYMENT IN LIUE OF TAXES
FY 2024 PILOT, approved under Council resolution 72-1982 and exempt from Proposition 26, is projected at $191,447 based on 1% of the net plant value attributed to the electric utility (including general plant).

3.6 INTEREST AND DEBT SERVICE
Total interest and debt service expenses are projected at $122,918 in each of the forecast years.

3.7 RATE FUNDED CAPITAL EXPENSES
The City provided the CIP plan for the next 5 years. The CIP includes only distribution system projects including undergrounding projects and routine repair and replacement expense. Table 3-4 shows the portion of CIP funded directly through rates. The rate adjustment plan smooths out these capital expenses through the use of reserves, especially in FY 2026 where capital projects are nearly $5 million.

TABLE 3-4: RATE FUNDED CAPITAL PROJECTS
FY23 FY24 FY25 FY26 FY27
Distribution CIP $35,000 $62,500 $1,410,000 $4,488,750 $900,000

3.8 OTHER REVENUES
Other revenues include customer contributions, miscellaneous service revenue, dividends and interest, line extension revenue, and utility pole attachment fees. Projected other revenues are provided in Table 3-5 below.

TABLE 3-5: PROJECTED OTHER REVENUES
FY23 FY24 FY25 FY26 FY27
Pole Attachment Fees $84,000 $90,000 $92,700 $95,481 $98,345 Misc. Revenue $148,519 $148,519 $152,975 $157,564 $162,291 Total Other Revenues $232,519 $238,519 $245,675 $253,045 $260,636

3.9 OTHER CONTRIBUTIONS
Finally, reserve fund transfers and contributions are based on the fund use needed to meet the rate adjustment plan.

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TABLE 3-6: CONTRIBUTIONS
FY23 FY24 FY25 FY26 FY27
Rate Reserve Fund
(Transfers from) or
Contributions
($3,505,806) ($1,418,853) ($787,272) ($2,079,014) $3,006,527

3.10 SUMMARY OF REVENUE REQUIREMENT
Once all of the components of the cash basis revenue requirement have been forecast, the parts can be summed to equal the total revenue requirement. Since the City uses a “cash basis” approach for rate setting, the basic revenue requirement is presented in that format. A summary of the City’s electric utility revenue requirement for the forecast period is summarized below in Table 3-7.

TABLE 3-7: SUMMARY OF THE FORECAST REVENUE REQUIREMENT
Fiscal Year: 2023 2024 2025 2026 2027
Planned Rate
Adjustment

16.0% 14.0% 8.0% 7.0%
Rate Revenue with Rate
Adjustment $12,150,672 $13,995,172 $16,010,818 $17,352,755 $18,633,055 Other Revenue $232,519 $238,519 $245,675 $253,045 $260,636 Total Revenue $12,383,191 $14,233,691 $16,256,493 $17,605,800 $18,893,691 Purchased Power $9,470,050 $9,173,804 $8,984,866 $8,761,614 $8,810,075 O&M plus A&G $5,944,027 $6,101,875 $6,328,791 $6,108,426 $5,844,973 PILOT $186,777 $191,447 $197,190 $203,106 $209,199
Principal & Interest
Payment
$253,143 $122,918 $122,918 $122,918 $122,918
Capital Improvement
Program from Rates $35,000 $62,500 $1,410,000 $4,488,750 $900,000 Total Expenses $15,888,997 $15,652,544 $17,043,765 $19,684,814 $15,887,164 Change in Working
Capital ($3,505,806) ($1,418,853) ($787,272) ($2,079,014) $3,006,527 Table 3-7 shows that, based on the assumptions detailed above and current retail rates, the City’s electric utility is not collecting sufficient revenue to meet projected expenses. The annual rate increases shown in Table 3-7 are recommended.

3.11 RECOMMENDATION
The City’s electric utility projected revenues are not sufficient to cover its projected revenue requirement in FY 2023-FY 2027. Table 3-7 shows that a significant rate increase is needed beginning in FY 2024 with additional adjustments through FY 2027. Both short- and long-term supply and operating cost

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considerations need to be evaluated and analyzed as the City Council works with the electric utility’s management to reach its operating objectives.

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4 Cost of Service Analysis
The objective of the COSA is to analyze costs and equitably assign those costs to customers commensurate with the cost of serving those customers. The founding principal of cost allocation is the concept of costcausation. Cost-causation evaluates which customer or group of customers causes the utility to incur certain costs by linking system facility investments and operating costs to serve certain facilities to the services used by different customers. This section of the report will discuss the general approach used to apportion the utility’s cost of service and provide a summary of the results.

4.1 COSA DEFINITION AND GENERAL PRINCIPLES
A COSA study allocates the costs of providing utility service to the various customer classes served by the utility based upon the cost-causal relationship associated with specific expense items. This approach is taken to develop a fair and equitable designation of costs to each customer class, where customers pay for the costs that they incur. Because the majority of costs are not incurred by any one type of customer, the COSA becomes an exercise in spreading joint and common costs among the various classes using factors appropriate to each type of expense. The COSA is the second step in a traditional three-step process for developing service rates. The first step is the development of the test period revenue requirement for the utility, which is the starting input for the COSA. The COSA then spreads the revenue requirement across the various customer classes, creating per unit costs by class. In the third step, rates are designed for each customer class, with per unit costs being one consideration in setting the appropriate rate levels.

A COSA study can be performed using embedded costs or marginal costs. Embedded costs generally reflect the actual costs incurred by the utility and closely track the costs kept in its accounting records.

Marginal costs reflect the cost associated with adding a new customer and are based on costs of facilities and services if incurred at the present time. While marginal costs can be valuable for designing rates in certain instances, marginal costs are generally higher than embedded costs. Therefore, the use of a marginal COSA study usually requires that all costs be scaled back to a level equal to the embedded cost revenue requirement established using actual or projected costs from an “accounting” perspective.

This study uses an embedded COSA as its standard methodology. Therefore, the City’s electric utility embedded cost revenue requirement and existing rate base investment are used in developing the COSA results.

There are three basic steps to follow in developing a COSA, namely:
◼ Functionalization
◼ Classification
◼ Allocation
Functionalization separates costs into major categories that reflect the utility’s plant investment and different services provided to customers. The primary functional categories are production, transmission, distribution and general.

Classification determines the portion of the cost that is related to specific cost-causal factors, such as those that are demand-related, energy-related or customer-related. Production costs are related to

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supplying and transporting power to customers on the system. Transmission costs are related to the bulk transfer of power throughout the system, which is designed to meet the peak demand requirement. The distribution system is designed to extend service to all customers attached to the system and to meet the peak load capacity requirement of each customer. Additionally, costs can be classified based on system revenues or directly assigned to a customer or group of customers.

Allocation of costs to specific customer classes is based on the customer’s contribution to the specific classifier selected. For instance, demand-related costs are allocated to a customer group using that customer group’s contribution to the particular measurement of system demand, whether coincident peak, non-coincident peak or some variation determined to be appropriate for the particular cost item.

An analysis of customer requirement, loads and usage characteristics is completed to develop allocation factors reflecting each of the classifiers employed within the COSA. The analysis may include an evaluation of the system design and operations, its accounting and physical asset records, customer load data and special studies.

4.2 GENERAL RATEMAKING PRINCIPLES
While this section does not address the design of rates, it is important to note that the COSA results will be one of the considerations when the process of designing rates for various customer classes begins. The basic goals of rate design include:
◼ The utility has an ability to collect the appropriate revenue requirement ◼ Utility revenues and customer rates are stable and predictable ◼ Proper price signals are sent to create efficiency of resources ◼ Rates are fair and equitable among customers and avoid undue discrimination ◼ Rates are simple, easy to understand and feasible for the utility to implement The COSA is generally used to assist in meeting the second and fourth goals of rate design. Price signals are best if they reflect the specific costs incurred. Rates are generally considered fair and equitable if customers are deemed to pay their share of the costs incurred by the utility. Additionally, the first goal is met as long as the COSA is based on the appropriate revenue requirement, and the use of a consistent COSA methodology contributes towards the second goal. Rates are more stable through time if the COSA methodology is not significantly changed every time a rate application is made.

4.3 FUNCTIONALIZATION OF COSTS
The first step in the COSA process following finalization of the revenue requirement is to functionalize the revenue requirement. Functionalization is the separation of cost data into the functional activities performed in the operation of a utility system (i.e., power supply, transmission, distribution and customer service). Functionalization was accomplished using the City’s system of accounts, which largely segregates costs in this manner.

In addition to the functionalized costs, certain joint costs are spread to each functional category based on the relationship of the joint cost to the business function. These joint costs include such items as administrative and general costs.

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4.3.1 Standard Functionalization
Plant investment costs or rate base are generally functionalized into production, transmission, distribution and general cost categories. The functionalization of rate base typically is very straightforward as costs for the different functions are readily identifiable and rate base accounts are maintained by functional categories.

Expense accounts are also typically kept according to these basic functional categories, with expense items associated with certain types of plant being treated in the same manner as the corresponding plant account.

The two areas where there generally are differences in functionalization among utilities are in the treatment of general plant and A&G expenses. Typically, general plant is considered a separate functional category. Some utilities, when their internal accounting systems can support such an assignment process, will record general plant investment by loading the costs into the other functional categories, much like an overhead assignment or a form of activity-based accounting.

On the expense side, A&G costs can be treated in much the same way. Generally, they are treated as a separate expense category that can be spread to functions based upon all other O&M expenses. However, they can also be spread to functions on the basis of total net plant, labor ratios or, in some cases, directly assigned as part of the activity-based accounting approach.

4.3.2 City of Healdsburg Functionalization Method
The specific functions used for the City’s electric COSA are defined below. The functions generally follow standard cost of service approaches.
◼ Production/Power Supply. The power supply function category includes all power-related services that are obtained by the utility through generation/production and direct purchase. The purchase activity represents a form of supply acquisition activity. ◼ Transmission. The transmission services that the utility must acquire to deliver the purchased power supply to the service area are included in purchased power costs. The costs associated with the distribution system’s transmission service include only those costs for operating and maintaining the transmission lines, poles, towers, substations, etc., used to deliver power to the distribution network. ◼ Distribution. Distribution services include all services required to move the electricity from the point of interconnection between the transmission system and the distribution system to the end user of the power. These include substations, primary and secondary poles and conductors, line transformers, services and meters, as well as customer costs and any direct assignment items. ◼ Customer. Customer-related services include all services related to the presence of customers on the system, not to customer usage. These services include meter reading, billing, collections, advertising, etc.

4.4 CLASSIFICATION OF COSTS
The second step in performing a cost of service study is to classify the functionalized expenses to traditional cost causation categories. These cost causation categories can be directly related to specific consumption behavior or system configuration measurements such as coincident peak (CP) or noncoincident peak (NCP) demand, energy or number of customers. Each classification category will have a specific allocator that, when applied, will distribute those costs among the appropriate customer classes during the allocation phase of the analysis.

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Functionalized power purchases, generation and transmission system costs are classified as demandrelated and/or energy-related and in some instances directly assigned, while distribution costs are classified as demand- or customer-related, or directly assigned to specific customer classes of service.

4.4.1 Standard Classification
The three most general classification categories are demand-related, energy/commodity-related and customer-related. Within these three categories there are multiple ways of defining each option as well as varying ways to split costs between two or more classifiers. For example, demand- and energy-related costs can be separated by seasonal distinctions as well as to reflect peak/off peak consumption periods.

Customer-related costs could be separated by demand and customer categories, while customer categories can distinguish between actual customer and weighted customer characteristics. Other classifiers sometimes used in the process include revenue-related and direct assignment. In addition, there are many instances where costs are not specifically classified to a particular category but rather in the same manner as an individual cost account or subtotal of specific cost accounts.

Generally, power production and purchased power costs are classified by a combination of demand and energy. Transmission costs are generally classified as peak demand, while distribution costs are generally split between demand and customer.

There are two methodologies that can be used to classify distribution costs: 100% demand and minimum system. The 100% demand methodology assumes that the distribution system is built to meet the noncoincident peak. Therefore, distribution costs are classified as 100% demand-related. Specific distribution costs are sometimes split between demand and customer according to a minimum system approach. This approach reflects the philosophy that the system is in place in part because there are customers to serve throughout the service territory expanse, and that a minimally sized distribution system is needed to serve these customers even if they only use 1 kWh of energy per year. The concept follows that any costs associated with a system larger than this minimal size are due to the fact that customers “demand” a delivery quantity greater than the minimum unit of electricity and that therefore, those costs should be treated as demand-related. Because the residential class tends to have a higher share of the number of customers as compared to the share of non-coincident peak, the minimum system methodology tends to allocate more costs to the residential customer class and customer charges tend to be higher than with the 100% demand methodology.

The process of cost classification is the area within the COSA that can create considerable cost variability between customer classes due to differences in system configurations, demand measurements and assignment philosophy. The complexity of the entire COSA process is further compounded since, in some cases, the classification category is clear, but the specific allocator is not. For example, a particular cost item may clearly be peak demand-related but that demand can be measured as either a single coincident peak for the year, a 2 CP approach to reflect seasonal considerations, the sum of 12 monthly coincident peaks or through some other approach such as “Average & Excess.”

4.4.2 City of Healdsburg Classification Method
The following are the specific classifiers used in the City’s electric COSA within each of the four functions:
◼ Power Supply

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Classifying power supply costs to demand and energy (commodity) components requires the evaluation of a number of complex, interrelated factors. Consideration must be given to what or who caused the power supply purchase to be made, and to the uses to which it will be put (i.e., meeting demand and energy requirement). Within this study, power supply costs are classified to demand and energy based on the City’s power cost forecast for the test period. The specific classifiers used for the power supply function include:
 Energy
 Demand
Energy-related costs are those that vary with the total amount of electricity consumed by a customer.

Electricity usage measured in kWh is used in this portion of the analysis as well. Energy costs are the costs of consumption over a specified period of time, such as a month or year.

Demand-related costs are those that vary with the maximum demand or the maximum rates of power supply to customer classes. Customer and system demand for this analysis were measured in kW.

Demand costs are generally related to the size of facilities needed to meet a customer’s maximum demand at any point in time.

All of the City’s power supply costs are purchases related to energy including transmission purchases.

Transmission purchases through NCPA are included in this section of the revenue requirement. ◼ Transmission (Utility-Owned)
The transmission function includes the utility’s own transmission assets associated with providing power to the City’s distribution system. Transmission services that the City purchases in order to facilitate the delivery of wholesale power purchases to the City’s service area are included in power supply costs. The costs associated with the local utility’s transmission service include only those costs for operating and maintaining the transmission lines, poles, towers, substations, etc. used to deliver power to the distribution network. The cost of providing transmission service to a customer is considered to be directly proportional to the demand that customer imposes on the system. The City does not own transmission equipment; therefore, these line items are not included in the analysis. ◼ Distribution
Distribution services include all services required to get energy supply from the point of interconnection between the transmission system and the utility’s service area to the end user of the power. Classifying distribution costs requires a special analysis of the nature of the costs. Most distribution costs are split between demand and customer components. The demand component is the cost of facilities built to serve a particular load, such as distribution substations. The customer component is the cost of facilities that varies with the number of customers, such as meters. The following are the specific classifiers used for the distribution function:
 Non-coincident peak demand (NCP) on Primary System
 NCP on Secondary System
 Actual Customer
 Customers Weighted for Meters and Services
 Direct Assignment

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The minimum system analysis is used to determine the lowest level of plant investment required to serve a utility’s customers compared to the actual facilities in place to meet varying customer demands. This study uses data from other municipal utilities to develop the demand and customer share of the distribution system. Generally, 60% of the system is functionalized and classified as demand related and the remaining 40% is customer related. ◼ Customer
Customer-related services include all services related to the presence of customers on the system, not to customer usage. These services include meter reading, billing, collections, advertising, etc.

Customer-related costs vary with the number and type of customers. They do not vary with system supply levels. These costs are sometimes referred to as “readiness to serve” or “availability” charges.

Customer costs are incurred by the utility to have electricity supply readily available for a customer whether it is utilized or not.

There are two types of customer-related cost classification categories—actual and weighted. Actual customer costs vary proportionally with the addition or deletion of a customer, regardless of the size or usage characteristics of the customer. An example of an actual customer-related cost is postage on customer bills. The cost of postage does not vary regardless of the type or size of customer or usage levels. In contrast, a weighted customer cost reflects a disproportionate cost attributable to the addition or deletion of a customer. An example of weighted customer costs is meter-reading expenses. In some cases, it takes less time and effort to read a residential energy meter than it does to serve a large commercial customer that also has a demand meter. This type of difference is accounted for in the weighted customer allocation factors. ◼ Direct Assignment
Some costs can be directly assigned to certain customer classes without being classified as demand-, energy-, or customer-related. These are generally costs associated with specific services, such as dedicated capital facilities, or with specific customer classes, such as lighting customers. Direct assignments include costs incurred to maintain and serve city-owned streetlights.

4.5 ALLOCATION OF COSTS
The third step in performing a cost of service study is the allocation of the utility’s total functionalized and classified revenue requirement to the customer classes of service. This is performed through the application of an appropriate allocation methodology.

4.5.1 City of Healdsburg Allocation Methodology
The following are the specific allocation methods used in the City’s electric COSA. ◼ Demand Allocation Factors. For purposes of this study, five types of demand allocation factors were developed.
 Non-coincident peak demand allocation factor (NCP). First, a non-coincident peak demand allocation factor was developed for each customer class. Expenses classified and allocated by the non-coincident peak demand allocation factor included those predicated on maximum demands

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such as distribution substations, and a portion of poles and lines, mains, meters and services. The NCP demand method allocates costs to each class of service based upon their highest individual non-coincident peak demand regardless of the time of occurrence. The NCP allocation factor is used to allocate distribution.
 1 Coincident peak (1 CP). For each class of service, a contribution to a single annual system coincident peak was derived from the non-coincident peak by use of a coincidence factor. This coincident peak demand allocation method is referred to as the single coincident peak (1 CP) method. The 1 CP method allocates demand costs on the basis of a single demand value at the time of the system peak demand by each class. Expenses allocated on the 1 CP allocation factor include those related to the utility’s transmission system. The 1 CP allocation method is not used in this study.
 Sum of the two months coincident peaks (2 CP). For each class of service, a contribution to a seasonal system coincident peak was also derived from the non-coincident peak by use of a coincidence factor. The coincident peak demand allocation method used was the sum of the summer and winter coincident peaks (2 CP) method. The 2 CP method allocates demand costs on the basis of the sum of the contributions to seasonal system peak demands by each class. The 2 CP method was not used in this study.
 Sum of monthly coincident peak (12 CP). As with the 1 CP calculation, a contribution to monthly system coincident peaks was derived from the non-coincident peak by use of a coincidence factor.

This coincident peak demand allocation method is referred to as the sum of the monthly coincident peak (12 CP) method. The 12 CP method allocates demand costs on the basis of demand value at the time of the system peak demand in each month by each class. As discussed previously, the 12 CP method is used for power supply costs and transmission costs.  Average and excess method (A&E). The average and excess method represents an alternative approach to CP-related cost allocation. The A&E method compares each customer class’s average demand against its maximum NCP demand in order to reflect its potential peak demand volatility, and therefore its inherent ability to increase system peak requirement. The A&E method was not used in this study.
◼ Energy Allocation Factors. Energy costs vary directly with consumption. Accordingly, energy allocation factors were based upon electricity sales for each class. Energy allocation factors were used to allocate power supply costs, green-energy related costs and revenues and surplus sales revenue. ◼ Customer Allocation Factors. Two basic types of customer costs were identified—actual and weighted. The allocation factor for actual customers was derived from the actual number of customers served in each class of service. Two weighted customer allocation factors were also developed. The first weighted customer allocation factor considered the relative differences among the various customer classes of meter costs. The second weighted customer allocation factor considered the cost of customer accounting and meter reading by each rate class. Customer allocation factors were used to allocate some distribution costs such as meters and meter installations, and costs associated with customer service, accounts and sales. ◼ Rate Base Allocation. The value of the City’s electric system was estimated as of FY 2022 and is functionalized, classified and then allocated to customer classes. The resulting functionalized, classified and allocated rate base is then used to develop rate base allocation factors. These allocation factors (i.e., general plant, net plant, distribution rate base, etc.) are then used to allocate revenue requirement expenses. For example, maintenance of station equipment can be allocated using station equipment rate base, or property taxes might be allocated using net plant.

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◼ Other Cost Allocation. Other costs are allocated based on specific rate base items, O&M function totals, revenues, labor ratios and other allocation factors. These other allocation factors were used to allocate administrative and general expense items, as well as some other revenues such as dividend income or non-operating rental income.
◼ Administrative and General (A&G). All costs that are related to general overhead are classified to this area. Costs are allocated to customers based on their percentage of all other O&M expenses without power supply.
◼ Miscellaneous/Other Revenues. Miscellaneous/other revenues are generally allocated to customers based on allocation of all other O&M expenses.

4.6 REVIEW OF CUSTOMER CLASSES OF SERVICE
Customer classes of service refer to the arrangement of customers into groups that reflect common usage characteristics or facility requirement. The classes of service used within this study were as follows:
◼ Residential (D-1, D-4, & E-7)
◼ Small Commercial (C-1 & A-6)
◼ Large Commercial (P-2, E-19)
◼ Outdoor Lighting (OL)

4.7 MAJOR ASSUMPTIONS OF THE COST OF SERVICE STUDY
Major assumptions used in conducting the cost of service study for the City are as follows:
◼ Forecast calendar year 2024 was selected as the period for the allocation of costs within the cost of service study.
◼ The revenue requirement as outlined in Section 2 was used for the cost of service study. ◼ Power purchased is assigned to energy as detailed in the previous section. ◼ Distribution plant was classified based both on a “minimum system” approach. ◼ City-owned and maintained streetlights do not receive an allocation of capital projects funded through rates.
◼ Projected loads were based on data provided by the City.

Given these key assumptions, the cost of service analysis results are provided in the next subsection.

4.8 COST OF SERVICE RESULTS
Given the above assumptions regarding the cost of service analysis, the various costs were classified and allocated to the customer classes of service. Table 4-1 shows the results of this analysis by function for FY 2024.

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Packet Pg. 419 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) CITY OF HEALDSBURG ELECTRIC UTILITY Cost of Service Analysis– Draft Report 4856-1674-6855 v1 prepared by EES CONSULTING 24
TABLE 4-1: SUMMARY OF FUNCTIONALIZATION FY 2024
Production
Related
Distribution
Related
Customer
Related
Net Revenue
Requirement
Residential D-1, D-4 & E-7 $3,942,970 $405,606 $846,998 $5,195,574 Small Commercial, C-1 & A-6 $3,285,434 $265,587 $395,916 $3,946,937 Large Commercial P-2, E-19 $4,255,970 $353,515 $64,224 $4,673,709 Outdoor Lighting $58,712 $6,565 $111,579 $176,857
TOTAL $11,543,087 $1,031,273 $1,418,717 $13,993,077
The overall COSA results are summarized in Table 4-2.

TABLE 4-3: SUMMARY OF COST OF SERVICE ANALYSIS FY 2024
Present Rate
Revenues
Net Revenue
Requirement
Surplus/(Deficiency)
in Present Rates
Rate Increase
(Decrease)
Residential D-1, D-4 & E-7 $4,867,033 $5,195,574 ($328,541) 7% Small Commercial, C-1 & A-6 $3,512,553 $3,946,937 ($434,384) 12% Large Commercial P-2, E-19 $3,630,294 $4,673,709 ($1,043,415) 29% Outdoor Lighting $54,923 $176,857 ($121,934) 222%
TOTAL $12,064,804 $13,993,077 ($1,928,274) 16%
The results show that under present retail rates, the City’s electric utility is not collecting sufficient revenues to meet projected revenue requirements.

When examining the results shown above, it is important to note that the inter-class cost allocations are based on load data estimates and usage pattern assumptions. Therefore, utilities often elect not to make rate modifications when deviations from the total system rate change are within 10 percent. Some of the City’s rate classes are outside of the +/-10% margin of error. Proposed rate adjustments by class are recommended to gradually move each class closer to its cost of service rather than make large and sudden corrections.

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Packet Pg. 420 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) CITY OF HEALDSBURG ELECTRIC UTILITY Cost of Service Analysis– Draft Report 4856-1674-6855 v1 prepared by EES CONSULTING 25
5 COSA Unit Costs
This section provides the table comparisons for current rates and the COSA unit costs for FY 2024. For classes without demand rates, demand-related costs are included in the energy charge. In practice, a share of these costs may be included in both the basic charge and kWh charge.

TABLE 5-1: COSA UNIT COSTS FY 2024: RESIDENTIAL
Present Rates
D-1 & D-4
COSA Unit Costs
D-1, D-4, E-7
Basic Charge ($/month) $6.38 $14.84
Energy Charge Tier 1, ($/kWh) $0.1360
Energy Charge Tier 2, ($/kWh) $0.1711
Energy Charge Tier 3, ($/kWh) $0.2958
Energy Charge all kWh ($/kWh) Avg = $0.1697 $0.1716
Rate Change over Present 11.4%
TABLE 5-2: COSA UNIT COSTS FY 2024: SMALL COMMERCIAL
Present Rates
C-1
COSA Unit Costs
C-1, A-6
Basic Charge ($/month) $17.94 $29.74
Energy Charge Summer, ($/kWh) $0.1728
Energy Charge Winter, ($/kWh) $0.1375
Energy Charge all kWh ($/kWh) Avg = $0.1558 $0.1682
Rate Change over Present 11.8%

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Packet Pg. 421 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting) CITY OF HEALDSBURG ELECTRIC UTILITY Cost of Service Analysis– Draft Report 4856-1674-6855 v1 prepared by EES CONSULTING 26
TABLE 5-3: COSA UNIT COSTS FY 2024: LARGE COMMERCIAL P-2, E-19 Present Rates
P-2
COSA Unit Costs
P-2, E-19
Basic Charge ($/month) $87.92 $77.96
Energy Charge Summer, ($/kWh) $0.1179
Energy Charge Winter, ($/kWh) $0.1021
Energy Charge all kWh ($/kWh) Avg = $0.1103 $0.1556
Demand Charge Summer, ($/kWh-mo) $8.77
Demand Charge Winter, ($/kW-mo) $5.37
Demand Charge, ($/kW-mo) Avg = $7.16 $3.74
Rate Change over Present 23.8%

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Packet Pg. 422 Attachment: Healdsburg Electric Cost of Service Study (3962 : Electric Rate Setting)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 5, 2023
SUBJECT: Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention
PREPARED BY: Lance MacDonald, Fire Marshal/Division Chief STRATEGIC INITIATIVE(S):

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

Adopt a Resolution adopting a "Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention".

BACKGROUND:

The City of Healdsburg incorporates vegetation management in its fire prevention strategy. A key component of this approach is leveraging the natural grazing capabilities of animals to mitigate the risk of wildfires. In situations where grazing animals are employed, it's imperative for the City to partner with contractors who uphold the highest standards of care and ensure the wellbeing of these animals. Although previous projects that involved grazing involved a consideration for animal welfare, the City has since recognized an opportunity to more clearly codify specific requirements as well as enforcement mechanisms to ensure that they are achieved. The formulation of this policy, prioritizing the humane treatment and welfare of grazing animals, stems from a commitment set forth by the City Council, reflecting our dedication to the symbiotic relationship between sustainable fire prevention and animal care.

DISCUSSION/ANALYSIS:

The City of Healdsburg recognizes the need for proactive vegetation management in its comprehensive fire prevention strategy. Using grazing animals, including goats, sheep, and cattle, has proven to be not just effective in controlling wildfire fuels, but also a practice promoting ecological balance.

Staff recommend that the City Council adopt the proposed policy that includes several protocols designed to safeguard these animals and ensure the efficiency of this approach:
- Regular body condition appraisals of all grazing animals by the contractors to ensure

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their wellbeing.
- Implementation of a Herd Health Plan, formulated with the help of a licensed veterinarian, to maintain the health of the grazing animals. - Provision of a comprehensive diet for the animals, inclusive of necessary nutrient supplements.
- Uninterrupted access to fresh water for the livestock. - Adherence to humane handling and transportation practices to minimize stress on the animals.
- Measures to protect the animals from predators.
- Use of clear and informative signage to keep the public apprised of the grazing operations.
- Proper training of grazing company employees to ensure they are equipped to provide appropriate care to the animals.
- Immediate reporting and careful handling of non-ambulatory and terminally ill animals to prevent suffering.
- Prompt reporting of any animal deaths to the City of Healdsburg Fire Department to maintain transparency and accountability.
- Effective relay of any public questions, inquiries, or complaints to the City of Healdsburg Project Manager to ensure public concerns are addressed in a timely manner.

Adopting the proposed policy will not only protect the health and safety of the grazing animals but will also preserve the City's natural resources and contribute significantly to wildfire prevention efforts. This policy demonstrates the City of Healdsburg's commitment to the humane treatment of animals and our dedication to a sustainable and effective approach to fire management.

ALTERNATIVES:

The City Council can choose not to adopt the policy as proposed or amend and adopt the proposed policy with changes.

FISCAL IMPACT:

This policy does not have direct fiscal impact to the City.

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 of adopting a humane treatment of animals policy is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

ATTACHMENT(S):

Resolution
Exhibit A: Grazing Policy

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CITY OF HEALDSBURG
RESOLUTION NO. -2023

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG ADOPTING A POLICY FOR THE HUMANE

TREATMENT OF ANIMALS IN GRAZING OPERATIONS FOR

FIRE PREVENTION
WHEREAS, the City Council of the City of Healdsburg has prioritized sustainable fire prevention and, as a significant part of its established goals, has aimed to formulate a comprehensive grazing policy that aligns with the city's commitment to humane animal treatment and environmental stewardship; and
WHEREAS, as part of a broader commitment to effective fire risk mitigation, the City has integrated vegetation management strategies, including the innovative use of grazing animals, into its overarching fire prevention plan, recognizing the dual benefits of fuel reduction and natural resource conservation; and
WHEREAS, the City is dedicated to forging and maintaining collaborations with a selection of proficient grazing contractors, chosen for their demonstrated commitment to animal welfare and their capacity to carry out this important service within the standards set by the City; and
WHEREAS, it is an uncompromising requirement for these grazing contractors to provide the highest level of care and ensure the wellbeing of animals involved in grazing operations within the City, thus underlining the City's commitment to the ethical treatment of animals; and WHEREAS, as part of its leadership role and in the spirit of setting a positive example in ethical and humane animal treatment, the City Council and City Staff have worked diligently to create a grazing policy that outlines key protocols for the responsible care and handling of grazing animals.

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

1. Adopts the Grazing Policy: City of Healdsburg Policy for Humane Treatment of Animals in Grazing Operations for Fire Prevention attached as Exhibit A.

2. Finds 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.

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Packet Pg. 425 Attachment: Resolution (4068 : Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention) Resolution No. -2023

PASSED and ADOPTED by the City Council of the City of Healdsburg, this 5th day of June 2023, by the following vote:

AYES: Councilmembers: ( )
NOES: Councilmembers: ( )
ABSENT: Councilmembers: ( )
ABSTAINING: Councilmembers: ( )
SO ORDERED: ATTEST:
__________________________________ ____________________________________ Ariel Kelley, Mayor Raina Allan, City Clerk

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Packet Pg. 426 Attachment: Resolution (4068 : Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention) 1 City of Healdsburg Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention
The City of Healdsburg (“City”) incorporates vegetation management in its fire prevention strategy.

One vegetation management technique is the use of grazing animals to reduce wildfire fuels. The use of grazing animals, such as goats, sheep and cattle have proven to be an effective and ecologically sound practice. When the use of such grazing animals is deemed viable, the City may contract with various grazing contractors to provide this service. When doing so, the City will require the grazing contractor to provide the utmost care for and to safeguard the wellbeing of animals used for grazing in the City. The following protocols govern the treatment of animals for grazing operations and shall apply to all City contracts for grazing services.

Policy Purpose
Grazing livestock has three basic impacts on the landscape. They consume vegetation through grazing, they trample vegetation (which can facilitate the breakdown of plant carbon in the soil), and they transfer nutrients through their waste. Targeted grazing uses all three impacts to accomplish specific vegetation management goals.

This policy is intended to ensure the health and safety of animals while preserving natural resources.

Basic animal care practices can support animal well-being and assist grazers in evaluating husbandry practices and offer practices that are ethical and cost efficient. The below-mentioned best practices and protocols have been developed in coordination with grazers and veterinary doctors. Keeping animals healthy will help maintain the viability of the operation while maintaining animal welfare of animals. Safeguarding the wellbeing of the grazing animals is in the best interest of the grazers and is required by the City of Healdsburg.

Animal Condition
Grazing contractors are required to conduct frequent body condition appraisals of all grazing animals.

Contractors should use a systematic approach to review the condition of each animal prior to delivery, again when animals arrive, and throughout the grazing period. Contractors should arrange for a veterinarian to evaluate the herd condition on a regular basis. If any illness is found to be out of the scope of herders’ training and normal level of care, a veterinarian must evaluate, treat and provide a condition report to herder. This report is to be shared with the City of Healdsburg.

Health Care and Herd Health Plan
Grazing contractors are to manage grazing animals to prevent or reduce the incidence of disease and injury. Producers are required to have a licensed veterinarian assist in the design and implementation of their Herd Health Plan (“Plan”). The Plan shall be submitted to the City for review and approval prior to

HEALDSBURG

FIRE DEPARTMENT
601 Healdsburg Ave
Healdsburg, Ca 95448
______________
cityofhealdsburg.org.
(707) 431-3360
FAX (707) 431-3146
[email protected]

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Packet Pg. 427 Attachment: Exhibit A: Grazing Policy (4068 : Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention) 2 the initiation of any grazing activities. No grazing activities may take place without a City-approved Herd Health Plan.

The Plan must outline appropriate antibiotic and pain treatment, protocols for treatment of sick animals (outlined below), and feed and water protocols.

The Plan shall address the prevention and treatment of disease and injury. Each Plan must include the following protocol in the event that an animal is observed with illness or health-related symptoms (cough, runny nose, diarrhea, injury etc.):
1) The employee who discovers the disease or injury shall notify the herder or foreman in charge of the job immediately.
2) The animal shall be assessed, and a plan of action developed to treat the animal. The treatment plan will include, at a minimum, a complete health check by the herder. 3) If the animal does not need substantial medical attention and is in good overall health the animal may remain with the herd and be treated in accordance with the healthcare plan. • Animals may be doctored with the medication deemed appropriate at the time by trained employees of grazing contractor.
1) 4 If the health check by the herder concludes that the animal needs additional medical attention or to be quarantined, the herder will consider the following in determining next steps:
• Animal may be quarantined or receive additional medical attention by separating the animal from the herd and keeping it under a close eye near a herdsman’s trailer. If the condition worsens at any time, the animal may be removed from the property if deemed necessary by the grazing contractor.
• If deemed necessary to remove the animal(s), the animal shall be picked up in a timely manner. Contractor will have 24 hours from notification of the need to remove and relocate an animal for further inspection/medical attention by qualified grazing contractor employee or veterinarian.
• If a veterinarian has inspected the animal, the grazing contractor will comply with the veterinarian’s recommended procedure. When the approved procedure has been completed and the animal looks to be in adequate health, the grazing contractor will contact the veterinarian for confirmation.

Feeding & Nutrition
Goats require a well-rounded diet that typically includes bulk foods such as well-made hay that is free from mold, seasonal green vegetation, and daily mineral supplements. Nutrients that are not provided through consumption of vegetation are to be supplemented as needed to maintain a healthy diet.

Feeding protocols shall be detailed in the Herd Health Plan.

Water
Animal drinking water provisions must be addressed in the Herd Health Plan. The plan must be adapted to herd size, terrain, elements, and the availability of fresh water. Fresh water is to be provided through water troughs in multiple locations and when necessary, with additional holding tanks/ reservoirs. Livestock shall not go more than 12ours without access to fresh water.

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Packet Pg. 428 Attachment: Exhibit A: Grazing Policy (4068 : Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention) 3 Handling & Transportation
Animals shall be handled in a manner that minimizes stress for the animal. Grazing animals have panoramic vision – they can see nearly all the way around except directly behind them. To induce movement, a handler usually approaches from the side rather than from directly in front of or behind the animal. When approaching animals from any direction, a low, quiet voice will prevent the animal from being startled.

When livestock cannot be herded (walked) from one location to another, hauling is necessary. Trailers shall be well ventilated. Floor surfaces shall be covered with shavings, matting, or other materials to enhance traction and stability. Good sanitation practices shall be employed to help prevent disease in both grazing animals and humans.

Protection from Predators
Sheep and goats are especially vulnerable to a number of predators (including coyotes, mountain lions, black bears, and domestic dogs). Grazers shall utilize appropriate tools to protect livestock. These tools are appropriate to the degree of predator threat, as well as to the human environment where the livestock are grazing. These tools may include electric fencing, guardian animals (dogs, llamas, or donkeys), FoxLights™, or other devices that deter predation. If guardian animals are utilized, they shall be provided with appropriate health care, nutrition, and access to fresh drinking water.

Electric Fencing
Grazing operators may use electric fencing to contain livestock. Signage shall be utilized to inform the public of the electric fencing. Fences are typically only off when moving livestock or when the operator or his/her employee(s) are entering the paddock.

Signage
Grazing contractors must provide signs stating the company name, and 24-hour contact number, and should be located at multiple locations around the targeted grazing locations.

Additional signs may include, but are not limited to, signs that:
• Inform the public to keep personal dogs/ pets on leashes • Inform the public not to feed grazing animals
• Inform the public that there are working dogs in the area • Inform the public of electric fence (posted every 20-25 feet hanging from fence when in use)
Herder/Employee Training
Grazing company employees shall be trained in the operation’s specific animal husbandry protocols.

Employees shall also receive the necessary equipment and supplies to care for the animals (including dogs) under their supervision. Training practices shall be summarized in the Herd Health Plan.

Herd Provisions
Each individual herd shall be comprised of approximately 400 animals or less:
• There shall be at least 1 herder per 400 animals.
• If the herd exceeds more than 400 animals, a second herder shall be added to help facilitate and watch the herd.

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Packet Pg. 429 Attachment: Exhibit A: Grazing Policy (4068 : Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention) 4 Non-Ambulatory and Terminally Ill Animals
A non-ambulatory animal is one that is incapable of standing or walking without assistance. Every grazing operation will occasionally have to handle animals that are acutely diseased or injured and unable to walk. Handling sick and non-ambulatory animals shall be done with a minimum of force and trauma. Animals determined to be terminally ill by a veterinarian shall be euthanized without delay.

Animal Death
In the rare and unfortunate event of an animal death, due to illness, predator or any other circumstance, the grazing contractor is to notify the City of Healdsburg Fire Department as soon as possible. Depending on circumstances an additional written report may be requested. The animal remains are required to be removed from city property as soon as possible, and in no event more than 12 hours, and with great respect and care.

Questions or Complaints
If the Grazing Contractor, their supervisors, Herders, or any employees under their purview receive questions, inquiries, or complaints, they must promptly relay such communications to the designated City Contract Manager. The employee is expected to make every effort to provide the contact information of the individual raising the concern, ensuring a timely and appropriate response can be provided.

Monitoring and Enforcement
The City will implement the following monitoring measures to ensure compliance with the relevant contract and safety of the animals:
1) Regular Monitoring and Inspections: The City shall conduct periodic inspections of the grazing sites to monitor compliance with the policy's guidelines and protocols. Inspections may include visual evaluations of animal health, feeding and water provisions, handling and transportation practices, and adherence to the Herd Health Plan.
2) Violation Reporting: Community members, City staff, and grazing contractors are encouraged to report any observed non-compliance, including the mistreatment of animals, failure to follow the Herd Health Plan, or any other deviation from the established guidelines, to the Healdsburg Fire Marshal.

3. Enforcement: Any contract for grazing services shall include reference to these policies, and provisions permitting the City to suspend or terminate the contract for violation of these policies.

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Packet Pg. 430 Attachment: Exhibit A: Grazing Policy (4068 : Policy for the Humane Treatment of Animals in Grazing Operations for Fire Prevention)

CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: June 5, 2023
SUBJECT: Appoint Council subcommittee to interview Planning Commission applicants
PREPARED BY: Raina Allan, City Clerk
STRATEGIC INITIATIVE(S):

Provide Effective Governance
RECOMMENDED ACTION(S):

Consider appointing a Council subcommittee to interview the applicants for the Planning Commission.

COMMUNITY ENGAGEMENT/OUTREACH:

The Planning Commission vacancy was published in the Press Democrat on May 8, 2023, May 15, 2023 and May 22, 2023. Information on the vacancy was also posted on the City Social Media Platforms.

BACKGROUND:

On June 30, 2023, two positions on the Healdsburg Planning Commission will expire.

DISCUSSION/ANALYSIS:

Staff Recommends the Council form a subcommittee at this time to interview the Planning Commission applicants and make recommendations to Council at the June 20, 2023, meeting, on the best qualified candidates to fill the positions. The application period closed May 25, 2023.

Staff will schedule interviews after the subcommittee has been formed. Staff received five applications. The applicants are listed below.

Jonathan Pearlman
Carrie Hunt
Alex Wood
Noah Jeppson
David Jones

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ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

ALTERNATIVES:

Council could wait to form the Subcommittee until the June 20, 2023, City Council meeting and fill the seats at the first meeting in August. The Council could also pursue an alternative plan to make the appointments without the formation of a subcommittee.

FISCAL IMPACT:

There is no fiscal impact related to the proposed 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):

Applications

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Packet Pg. 433 Attachment: Applications (4072 : Planning Commission - Council subcommittee)

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Packet Pg. 434 Attachment: Applications (4072 : Planning Commission - Council subcommittee)

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Packet Pg. 435 Attachment: Applications (4072 : Planning Commission - Council subcommittee)

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Packet Pg. 438 Attachment: Applications (4072 : Planning Commission - Council subcommittee)

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Packet Pg. 439 Attachment: Applications (4072 : Planning Commission - Council subcommittee)

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Packet Pg. 440 Attachment: Applications (4072 : Planning Commission - Council subcommittee)

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Packet Pg. 441 Attachment: Applications (4072 : Planning Commission - Council subcommittee) 05-15-2023

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Packet Pg. 442 Attachment: Applications (4072 : Planning Commission - Council subcommittee) 5/31/2023 – Page 1

CITY OF HEALDSBURG

CITY COUNCIL FUTURE AGENDA ITEMS
(NOTE: The schedule is tentative and subject to change pending final publication and posting of the City Council meeting agenda) June 20, 2023 Disabilities Pride Month Proclamation
(Tuesday) Terms of Service Agreement Renewal with Reach For Home Animal Control Contract Renewal
Fitch Mountain Public Access Improvements Bid Award, PSA Approval, and CIP Budget Amendment Reject bids for the Dry Barrel Fire Hydrant Replacement Project Misc. Land Use Code Amendments – 2
nd reading
YWCA Preschool Lease Agreement
Fire Services Contract Approval
Professional Services Agreement with SOS Community Counseling for Juvenile Diversion Service Investment Policy
GANN Appropriation Limit
Landscaping and Lighting Assessment District
Safe Gun Storage Ordinance
Climate Mobilization Strategy Draft Actions
Appointments to Planning Commission
Senior Advisory Commission Subcommittee Report Out
Professional Services Agreement with the Chamber of Commerce Fitch Mountain Artwork
August 7, 2023 Saggio Hills Park CEQA Addendum and Final Master Plan Approval Senior Center Bistro Dining Contract Renewal
Diversity, Equity, and Inclusion Plan Development Update Amend Special Event Policy and Chapter 12.24 of Municipal Code

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Packet Pg. 443 Attachment: Future Agenda Items (4074 : Future Agenda Items - June 5, 2023) 5/31/2023 – Page 2
Professional Services Agreement for Design Services for Healdsburg Avenue Discussion of Future SMART Train Station Location in Healdsburg August 21, 2023 Council Position on California Business Roundtable Ballot Initiative for 2024 Bid Award for Fire Substation
Foley Family Community Pavilion Bid Award
September 5, 2023
(Tuesday) Review Draft Climate Mobilization Strategy
September 18, 2023
VMT Policy
(NOTE: The schedule is tentative and subject to change pending final publication and posting of the City Council meeting agenda)

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Packet Pg. 444 Attachment: Future Agenda Items (4074 : Future Agenda Items - June 5, 2023)