Water and Wastewater Rate Workshop
January 2024
Infrastructure
WATER
53,000 metered connections
630 miles of water pipe
9 active wells (13,000 gpm)
4 reservoirs (55 MG storage)
5,800 fire hydrants
26,000 acre-feet of water served per year (23 mgd)
SEWER
52,000 service laterals
360 miles of sewer pipe
27 lift stations
31 siphons
7,678 manholes
Master Plan and Rate Studies
Key WATER Infrastructure Projects
3 New Water Wells
$22 million
Peck Reservoir Roof Replacement
$8 million
WOCWB OC-35 & OC-9 Corrosion Control Project
$11 million
Aging Pipe Repl.
$36 million
Onsite Chlorine & Fluoride Generation
$15 million
???
Key SEWER Infrastructure Project
Sewer Lift Station Replacements
$17 million
Sewer Pipe Inspection
$250K
Aging Pipe Rehab
$7 million
Utility Relocations $750K
Sewer Infrastructure Repairs
$27 million
Pumps
Wet-well
Generators
How are these projects/services paid?
Water and wastewater fees are not a tax but a fee for service deposited into “enterprise funds”.
Fees are used to pay for “specific benefits”.
To increase fees, we need approval from the elected body Taxes are used to pay for “general benefits”.
To increase taxes, we need approval from the public by a vote For water and sewer fees, customers only pay for what they use.
Water & Sewer Rate Study
Good news
High resident satisfaction
Reliable system
Challenges
50-60 year old infrastructure needs to be replaced
Rate Study
Cost of Service
Balance revenue vs. expenses
Affordability
Major drivers in our analysis
Last rate adjustments adopted in 2019
Rising construction costs
Inflation
Electricity
Maintenance
Supplies
Labor
Additional revenue needed to balance operating budget and fund CIP projects
Potential Consequences
Leaks or failures
Costly repairs and community disruptions
Unsafe conditions
Sewer spills
Unreliable service
Fines for violations
Reserve Targets for FY 2024
Reserve Type
Water
Wastewater
Operating Reserves:
Deals with cash flow
3 months of O&M
~$12.5M
4 months of O&M
~$3.5M
Capital Reserves:
Assists with timing and awarding contracts
150% of Average 5-year CIP
~$12.2M
Average of 5-year CIP
~$2.7 Million
Emergency Reserve:
Asset Failure
Cost to replace one groundwater well + incremental cost of buying imported water ~$10.7M
Cost to replace one lift station
~$4.5 Million
WaterDiscussion
Current Water Rate
Components
Commodity Rate - pass-through cost of purchasing water from Metropolitan Water District and Orange County Water District Fixed Meter Charge - funds the operations and maintenance of the water system Capital Charge - funds the capital improvements needed to the system as defined within the Water Master Plan Private Fire Line Fee – for costs directly related to fire protection
Future Water CIP Expenditure
Status Quo:Ending Water FundBalance
ProposedWater Cash Flow Analysis
Proposed:Water Ending Balance
Water Rate Comparison Fixed O&M Charge (meter) – Per Month Meter Size
Current Rates
Proposed Rates
Difference $
3/4"
$18.23
$19.31
$1.08
1"
$30.45
$32.17
$1.72
1 1/2"
$60.71
$64.34
$3.63
2"
$97.18
$102.94
$5.76
3"
$212.77
$225.19
$12.42
4"
$303.93
$321.69
$17.76
4" Fire Meter
$425.35
$450.37
$25.02
6"
$607.67
$643.38
$35.71
6" Fire Meter
$972.31
$1,029.40
$57.09
8"
NA
$1,029.40
NA
8" Fire Meter
$1,701.59
$1,801.45
$99.86
10" Fire Meter
$2,674.09
$2,830.85
$156.76
Water Rate ComparisonFixed Capital Charge – Per Month
Meter Size
Current Rates
Proposed Rates
Difference $
3/4"
$4.00
$4.26
$0.26
1"
$6.67
$7.94
$1.27
1 1/2"
$13.33
$15.88
$2.55
2"
$21.33
$25.40
$4.07
3"
$46.67
$55.57
$8.90
4"
$66.67
$79.38
$12.71
4" Fire Meter
$93.33
$111.13
$17.80
6"
$133.33
$158.76
$25.43
6" Fire Meter
$213.33
$254.01
$40.68
8"
NA
$254.01
NA
8" Fire Meter
$373.33
$444.52
$71.19
10" Fire Meter
$586.67
$698.54
$111.87
Water Rate ComparisonFire Service - Per Month
Meter Size
Current
Proposed
Difference $
3/4"
$3.65
$0.29
-$3.36
1"
--
$0.29
--
1 1/2"
--
$0.82
--
2"
$10.04
$1.74
-$8.30
3"
$14.90
$5.05
-$9.85
4"
$20.08
$10.75
-$9.33
6"
$30.11
$31.21
$1.10
8"
$40.15
$66.51
$26.36
10"
$49.88
$119.60
$69.72
12"
$59.92
$193.19
$133.27
Water Rate Comparison Commodity per $/ccf
Current
Proposed
Difference $
Commodity
$2.4034
$2.6870
$0.2836
Water Rate Survey for Single Family (¾ in meter at 9 ccf)
Wastewater Discussion
Current Sewer Rates
Future Sewer CIP Expenditures
Proposed Sewer Cash Flow Analysis
Sewer Cost of Service Analysis
Current Revenues
Estimated Sewer Flow
Proposed Sewer Ending Balance
Wastewater Rate Comparison
Current
Proposed
Difference $
Single Family
$10.98
$12.43
$1.45
Multi-family
$9.10
$9.15
$0.04
Commercial
$12.74
$23.05
$10.31
K-8
$2.26
$2.48
$0.22
High School
$3.51
$3.72
$0.21
Sewer Rate Survey for Single Family
Sample Residential Bill Impact
Residential Monthly Water Bill (3/4” meter)
(12 CCF = 6,552 gallons)
Current
Proposed
Change
Consumption
$ 28.84
$ 32.24
$ 3.40
Meter
$ 18.23
$ 19.31
$ 1.08
Capital Charge
$ 4.00
$ 4.26
$ 0.26
Water Subtotal
$ 51.07
$ 55.81
$ 4.74
Sewer Charge
$ 10.98
$ 12.43
$ 1.45
TOTAL
$ 62.05
$ 68.24
$ 6.19
5-Year Rate Schedule: Commodity, $/ccf
31 Current
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
Commodity
$2.4034
$2.6870
$3.0551
$3.5494
$3.8852
$4.2024
5-Year Water Rate Schedule: Fixed O&M, $/mo
32 Current
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
3/4"
$18.23
$19.31
$21.14
$22.94
$24.43
$25.53
1"
$30.45
$32.17
$35.23
$38.22
$40.70
$42.53
1 1/2"
$60.71
$64.34
$70.45
$76.44
$81.41
$85.07
2"
$97.18
$102.94
$112.72
$122.30
$130.25
$136.11
3"
$212.77
$225.19
$246.58
$267.54
$284.93
$297.75
4"
$303.93
$321.69
$352.25
$382.19
$407.03
$425.35
4" Fire Meter
$425.35
$450.37
$493.16
$535.08
$569.86
$595.50
6"
$607.67
$643.38
$704.50
$764.38
$814.06
$850.69
6" Fire Meter
$972.31
$1,029.40
$1,127.19
$1,223.00
$1,302.50
$1,361.11
8"
$1,604.98
$1,029.40
$1,127.19
$1,223.00
$1,302.50
$1,361.11
8" Fire Meter
$1,701.59
$1,801.45
$1,972.59
$2,140.26
$2,279.38
$2,381.95
10" Fire Meter
$2,674.09
$2,830.85
$3,099.78
$3,363.26
$3,581.87
$3,743.05
5-Year Rate Schedule: Fixed Capital, $/mo
33 Current
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
3/4"
$4.00
$4.76
$5.66
$6.74
$8.02
$9.54
1"
$6.67
$7.94
$9.45
$11.25
$13.39
$15.93
1 1/2"
$13.33
$15.88
$18.90
$22.49
$26.76
$31.84
2"
$21.33
$25.40
$30.23
$35.97
$42.80
$50.93
3"
$46.67
$55.57
$66.13
$78.69
$93.64
$111.43
4"
$66.67
$79.38
$94.46
$112.41
$133.77
$159.19
4" Fire Meter
$93.33
$111.13
$132.24
$157.37
$187.27
$222.85
6"
$133.33
$158.76
$188.92
$224.81
$267.52
$318.35
6" Fire Meter
$213.33
$254.01
$302.27
$359.70
$428.04
$509.37
8"
$373.33
$254.01
$302.27
$359.70
$428.04
$509.37
8" Fire Meter
$373.33
$444.52
$528.98
$629.49
$749.09
$891.42
10" Fire Meter
$586.67
$698.54
$831.26
$989.20
$1,177.15
$1,400.81
5-Year Rate Schedule: Fire Service, $/mo
34 Current
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
3/4"
$3.65
$0.29
$0.32
$0.35
$0.37
$0.39
1"
NA
$0.29
$0.32
$0.35
$0.37
$0.39
1 1/2"
NA
$0.82
$0.90
$0.98
$1.04
$1.09
2"
$10.04
$1.74
$1.91
$2.07
$2.20
$2.30
3"
$14.90
$5.05
$5.53
$6.00
$6.39
$6.68
4"
$20.08
$10.75
$11.77
$12.77
$13.60
$14.21
6"
$30.11
$31.21
$34.17
$37.07
$39.48
$41.26
8"
$40.15
$66.51
$72.83
$79.02
$84.16
$87.95
10"
$49.88
$119.60
$130.96
$142.09
$151.33
$158.14
12"
$59.92
$193.19
$211.54
$229.52
$244.44
$255.44
5-Year Sewer Rate Schedule
35 Customer Class
Current Rates
FY 2025
FY 2026
FY 2027
FY 2028
FY 2029
SFR
$10.98
$12.43
$14.48
$16.87
$19.57
$22.70
MFR
$9.10
$9.15
$10.66
$12.41
$14.40
$16.70
CII
$12.74
$23.05
$26.85
$31.29
$36.29
$42.10
K-8
$2.26
$2.48
$2.89
$3.36
$3.90
$4.52
High School
$3.51
$3.72
$4.33
$5.04
$5.85
$6.78
Next Steps
Prop 218
Rate Change
Process
Mail notices to all property owners before or by end of February 2024 Minimum 45 days advance public notification period
Requires a majority protest process for property-related fees for services such as water, sewer, and refuse collection With 50% +1 written protests, proposed fees would not be implemented 5-Year Rate Resolution
Conduct a public hearing on April 16
If approved, 2nd reading on May 7
If adopted, rate effective on July 1
Questions?