City of HerculesSewer Utility Financial Overview
May 28, 2024
Willdan Financial Services
Chris Fisher, Vice President
Michael Cronan, Project Manager
2 Financial Overview Objectives
Development of a 5-year financial plan
Funding current and future operations, capital
Debt repayment, compliance with bond covenants
Maintaining adequate reserves for operations and capital Equitable, cost-based rate structure
Proposition 218 compliance
3 Factors Driving Financial Plan
Rising operating costs (equipment, supplies, treatment, etc.) Rising personnel costs (labor, benefits, pensions, etc.) Rate study includes the addition of a Sewer & Stormwater Supervisor Meeting debt service coverage to maintain compliance with debt covenants Increasing operating and capital costs at the Pinole-Hercules Water Pollution Control Plant Funding ongoing sewer collection capital projects
Have not increased rates since 2014
Starting rate adjustments in FYE 2026 through FYE 2030
City of HerculesSewer Rate StudyMethodology & Projections 4 5
Customer Accounts
Usage/Volumes
Customer Billing/Revenue Reconciliation
Revenue Sufficiency under Existing Rates
Other Revenues
Rate Design
Total Revenue Requirements
O&M Expenses
Debt Service & Debt Service Coverage
Liquidity Requirements
Capital Expenditures
General Rate Study Methodology
6 Status Quo Projections
7 Capital Improvement Program
5-Year Financial Plan
8 5-year annual rate path
5-year annual bill path
Comparison with neighboring utilities – annual bills
Projected financial metrics & operating results over the 5-year financial plan including rate adjustments
9 5-Year Annual Rate Path
10 5-Year Annual Bill Path
11 Annual Neighboring Utility Comparison
12 Adjusted Financial Metrics
City of HerculesSewer Rate StudyQUESTIONS
13 14
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