Loma Linda City Council
April 9, 2024

SECTION 1. FINDINGS.

The City Council finds:
a. Notice of the proposed amended water rates and of the public hearing thereon was given pursuant to Proposition 218 to record owners of all affected parcels on January 18, 2024. 4911 notices were sent to residents and owners with 24 returned as undeliverable. b. The public hearing required by Proposition 218 was duly held by the City Council on March 12, 2024, pursuant to notice.
c. Three (3) written protests were received in opposition to the proposed amended water rates, constituting less than a majority of the affected property owners. d. Revenues derived shall not exceed the funds required to provide the propertyrelated service. e. Revenues derived shall not be used for any purpose other than that for which the fee is imposed.
f. The fee imposed shall not exceed the proportional cost of the service. g. No fee may be imposed unless the service is actually used by, or immediately available to, the owner of the property.
h. No fee may be imposed for general governmental services such as police, fire, ambulance, or library services where the service is available to the public at large in substantially the same manner as it is to property owners.

SECTION 2. CONCLUSIONS
a. The minimum water rates are hereby established pursuant to Exhibit “A” attached hereto and made a part hereof.
b. Rates for private fire lines used exclusively for commercial fire protection, whether said lines are connected with automatic sprinkling systems or hose attachments are hereby established pursuant to Exhibit “A” attached hereto and made a part hereof. c. Rates for agricultural water shall be determined by a separate agreement. d. The City of Loma Linda retains the right to be the retail water purveyor for all domestic water service within the City limits of the City of Loma Linda and areas beyond the City limits by written agreement with the exception of those institutionally related services which at any time receive water from the Loma Linda University Water System. e. Ordinance No. 754 is hereby repealed.

Council Bill #O-2024-03

f. The effective date of the rates shall be June 1, 2024.

SECTION 3. POSTING AND PUBLICATION. The City Clerk is directed to cause copies of this ordinance to be posted at three (3) prominent places in the City of Loma Linda and to cause publication once in The Sun, the official newspaper of the City of Loma Linda, of a notice setting forth the date of adoption, the title of this ordinance, and a list of places where copies of this ordinance are posted, within fifteen (15) days after adoption of this ordinance.

This Ordinance was introduced at a regular meeting of the City Council of the City of Loma Linda, California, held on the 12th day of March, 2024, and adopted as an Ordinance the on the day of , 2024, by the following vote to wit:

Ayes:

Noes:

Abstain:

Absent:
______________________________
Phillip Dupper, Mayor
ATTEST:
________________________________
Lynette Arreola, City Clerk
Submitted By:

Tuckfield & Associates
Contact: Mr. G. Clayton Tuckfield
2549 Eastbluff Dr, #450B
Newport Beach, CA 92660
(949) 760-9454
www.tuckfieldassociates.com
January 2024
Report For:

City of Loma Linda
25541 Barton Road
Loma Linda, CA 92354
(909) 799-2811
Report on
Water and Wastewater
Rate Study
[This Page Intentionally Left Blank for Two-sided Printing] Tuckfield & Associates
2549 Eastbluff Drive, Suite 450B, Newport Beach, CA 92660 Phone (949) 760-9454 Fax (949) 760-2725
Email [email protected]
January 4, 2024
Mr. Jarb Thaipejr
City Manager
City of Loma Linda
25541 Barton Road
Loma Linda, CA 92354
Dear Mr. Thaipejr:

I am pleased to present this Water and Wastewater Rate Study (Study) report for the City of Loma Linda (City).

The water and wastewater rates presented in this report have been developed based on cost of service principles following industry methods. The rates are fair and equitable for the users of the water and wastewater systems and have been established in accordance with Proposition 218.

This study included a review and analysis of the water and wastewater enterprise revenue and revenue requirements, number of customers, volumes, and current rate structure. The major objectives of the Study include the following.
 Generate positive levels of income in the Study period  Maintain operating and capital reserves at or greater than target levels  Maintain debt service coverage ratios at or greater than the minimum required  Meet annual capital replacement spending from enterprise rate revenue This report documents the findings and recommendations for the financial plans and rates for the City’s water and wastewater enterprises. Tables and figures are provided throughout the report to demonstrate the calculations.

It has been a pleasure to work with City staff during the performance of this study. If there are any questions, please contact me at (949) 760-9454.

Very Truly Yours,

TUCKFIELD & ASSOCIATES

G. Clayton Tuckfield
Principal Consultant
[This Page Intentionally Left Blank for Two-sided Printing] Water and Wastewater Rate Study
City of Loma Linda
Table of Contents
Page
Executive Summary ............................................................................................... 1 Water Financial Plan ....................................................................................................................................... 1 Current Water Rates ....................................................................................................................................... 1 Proposed Water Rate Structure and Rates..................................................................................................... 2 Water Bill Impacts ........................................................................................................................................... 2 Wastewater Financial Plan .............................................................................................................................. 4 Current Wastewater Rates .............................................................................................................................. 4 Proposed Wastewater Rate Structure and Rates ........................................................................................... 4 Wastewater Bill Impacts .................................................................................................................................. 5 Introduction ............................................................................................................. 7 Background ..................................................................................................................................................... 7 Objectives ........................................................................................................................................................ 7 Scope of Study ................................................................................................................................................ 8 Assumptions ........................................................................................................... 8 City Reserve Policy ......................................................................................................................................... 9 City Beginning Balances and Reserve Targets .............................................................................................. 9 Water Financial Planning ..................................................................................... 10 Current Water Fixed and Variable Charges .................................................................................................. 10 Water User Classifications ............................................................................................................................ 11 Number of Customers............................................................................................................................ 11 Number of Water Meters ....................................................................................................................... 11 Water Financial Plan ..................................................................................................................................... 12 Revenues ............................................................................................................................................... 12 Revenue Requirements ......................................................................................................................... 13 Operation and Maintenance Expense ............................................................................................ 13 Annual Replacement Transfer ....................................................................................................... 14 Annual Debt Service....................................................................................................................... 14 Water Capital Improvement Program .................................................................................................... 14 Water Financial Plan .............................................................................................................................. 15 Proposed Revenue Adjustments.................................................................................................... 15 Cost of Service ..................................................................................................... 17 Industry Methodology .................................................................................................................................... 17 Costs of Service to be Allocated ................................................................................................................... 17 Water and Wastewater Rate Study
City of Loma Linda
Table of Contents (continued)
Page
Water Rate Design ................................................................................................ 18 Proposed Rate Structure ............................................................................................................................... 18 Proposed Fixed Charges ..................................................................................................................... 18 Private Fire Protection Charges ..................................................................................................... 20 Proposed Variable Charges ................................................................................................................. 21 Tier Definitions................................................................................................................................ 21 Delivery Costs ................................................................................................................................ 21 Peaking Costs ................................................................................................................................ 22 Water Supply .................................................................................................................................. 22 Proposed Water Rates .................................................................................................................................. 24 Water Bill Impact Analysis ................................................................................... 25 Water Rate Survey ................................................................................................ 25 Wastewater Financial Planning ........................................................................... 27 Current Wastewater Rates ............................................................................................................................ 27 Wastewater User Classifications ................................................................................................................... 28 Number of Customers............................................................................................................................ 28 Wastewater Financial Plan ............................................................................................................................ 28 Revenues ............................................................................................................................................... 29 Revenue Requirements ......................................................................................................................... 30 Operation and Maintenance Expense ............................................................................................ 30 Capital Improvement Funding ........................................................................................................ 30 Advances Repayment .................................................................................................................... 30 Wastewater Capital Improvement Program........................................................................................... 31 Wastewater Financial Plan .................................................................................................................... 31 Proposed Revenue Adjustments.................................................................................................... 31 Wastewater Rate Survey ...................................................................................... 33 List of Tables
Table ES-1 Proposed Water Fixed and Variable Charges ................................................................................ 2 Table ES-2 Comparison of Current Single-family Residential Bi-monthly Water Bill with ¾-inch Meter Size With Proposed Bill Using June 2024 Water Rates ........................................................................ 3 Table ES-3 Proposed Wastewater Monthly Fixed and Variable Charges ........................................................ 5 Water and Wastewater Rate Study
City of Loma Linda
Table of Contents (continued)
Page
Table 1 Assumptions and Planning Factors ................................................................................................ 8 Table 2 June 30, 2023 Estimated Beginning Cash Balances and Reserve Targets .................................. 9 Table 3 Current Water Rates .................................................................................................................... 10 Table 4 Historical and Projected Water Customers by Classification ....................................................... 11 Table 5 Projected Number of Water Meters by Size ................................................................................. 12 Table 6 Projected Rate-based Water Revenue Using Existing Rates ...................................................... 13 Table 7 Projected Water Miscellaneous Revenue .................................................................................... 13 Table 8 Budget and Projected Water Operation and Maintenance Expense ........................................... 14 Table 9 Water Capital Improvement Program ........................................................................................... 15 Table 10 Water Financial Plan .................................................................................................................... 16 Table 11 Allocation of Water Revenue Requirements to Cost Component ................................................ 18 Table 12 Design of Water Fixed Charges ................................................................................................... 19 Table 13 Design of Water Fixed Charges by Meter Size ............................................................................ 19 Table 14 Proposed Water Fixed Charges by Meter Size ............................................................................ 20 Table 15 Design of Private Fire Protection Charges ................................................................................... 20 Table 16 Proposed Bi-monthly Private Fire Protection Charges ................................................................. 21 Table 17 Design of Uniform Volume Rate for Delivery Costs ..................................................................... 22 Table 18 Design of Single-family Residential Peaking Rate ....................................................................... 22 Table 19 Design of Water Supply Costs by Tier ......................................................................................... 23 Table 20 Design of Water Rate Structure ................................................................................................... 23 Table 21 Proposed Water Fixed and Variable Charges .............................................................................. 24 Table 22 Comparison of Current Single-family Residential Bi-monthly Water Bill with 3/4 -inch Meter Size With Proposed Bill Using June 2024 Water Rates ....................................................................... 25 Table 23 Current Wastewater Fixed and Variable Charges........................................................................ 27 Table 24 Historical and Projected Wastewater Customers by Classification .............................................. 28 Table 25 Projected Rate-based Wastewater Revenue Using Current Rates ............................................. 29 Table 26 Projected Wastewater Miscellaneous Revenue ........................................................................... 29 Table 27 Projected Wastewater Operation and Maintenance Expense ..................................................... 30 Table 28 Wastewater Capital Improvement Program ................................................................................. 31 Table 29 Wastewater Financial Plan ........................................................................................................... 32 List of Charts
Chart ES-1 Single-family Residential Bi-monthly Water Bills with ¾-inch Meter Using 37 HCF ....................... 3 Chart ES-2 Single-family Residential Bi-monthly Wastewater Bills .................................................................. 6 Water and Wastewater Rate Study
City of Loma Linda
Table of Contents (continued)
Page
Chart 1 Single-family Residential Bi-monthly Water Bills Using 35 HCF .................................................. 26 Chart 2 Single-family Residential Bi-monthly Wastewater Bills ................................................................ 33 Appendix
Appendix A-1 Allocation of Water Revenue Requirements to Cost Component ................................................ 35 Appendix A-2 Allocation of Costs to Public and Private Fire Protection ............................................................. 36 Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 1
Executive Summary
The City of Loma Linda (City) engaged Tuckfield & Associates to conduct a comprehensive Water and Wastewater Rate Study (Study) for its water and wastewater enterprise systems. The major objectives of the Study were to develop forward-looking financial plans of revenues and revenue requirements for each system, perform analyses to determine the costs of providing service, and design new water and wastewater rates and charges for implementation.

Water Financial Plan
The revenue and revenue requirements of the water system were identified and projected to create a forward looking financial plan for the water enterprise. Annual costs of the water system include operation and maintenance expense (O&M), capital improvement funding, and debt service. Projected O&M expenses of the financial plan include the City’s FY 2023-24 budget expenses for the first year of the financial plan, with future O&M expenses being projected through application of inflation factors to budget year expenses.

The City has prepared a five-year Capital Improvement Program (CIP) that includes replacements and other capital improvements. The majority of the CIP includes spending on various structures, improvements, and equipment including the South Hills 1.6 MG Reservoir, waterline replacements, and meter replacements. The construction costs of the CIP total about $6.3M over the period FY 2023-24 to FY 2027-28. The CIP is expected to be financed through water revenues, development impact fees, and capital reserves.

An analysis was performed that compared the projected revenue using the City’s current water rates with the projected revenue requirements (costs) of the water system. The analysis indicated that the current level of revenue being received is not sufficient to meet future obligations and needs to be increased by approximately

4.0 percent on June 1, 2024 and on each January 1 for the remaining years of the Study period. Revenue increases are recommended to adequately meet future obligations, debt coverage requirements, and other financial planning criteria. The water financial plan is presented in Table 10.

Current Water Rates
The current water rates consist of fixed charges by meter size and variable charges for water consumption. Singlefamily Residential (SFR) customers have a tiered variable rate structure for blocks of water consumption while all other customers have a uniform variable charge. Table ES-1 provides the current water rates charged to water customers of the City.

Proposed Water Rate Structure and Rates
The proposed rate structure for the City maintains the current rate structure in place. The proposed water rate structure keeps the fixed charge structure by meter size and maintains the consumption tiered structure for SFR Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 2
customers and uniform volume rates for all other customers. A discussion of the proposed rate structure is provided on page 18. Table ES-1 presents the water rates for June 1, 2024 and for future years.

Water Bill Impacts
Table ES-2 presents the impacts to SFR bills from the implementation of the proposed June 1, 2024 water rates.

For a SFR customer with a 3/4-inch meter using the average consumption of 35 hundred cubic feet (HCF) bimonthly, the bill will increase from $120.11 to $129.90, an increase of $9.79, or 8.2 percent. The 8.2 percent increase is higher than the overall 4.0 percent revenue increase required due to cost of service rate changes in this first year.

Table ES-1
Proposed Water Fixed and Variable Charges
Current June 1, January 1, January 1, January 1, January 1, Rate FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28
Meter Size Fixed Charge ($ per bi-month)
3/4" $39.15 $41.82 $43.49 $45.23 $47.04 $48.92
1" $54.47 $57.54 $59.84 $62.23 $64.72 $67.31

1.5" $86.44 $90.53 $94.15 $97.92 $101.84 $105.91
2" $136.00 $141.28 $146.93 $152.81 $158.92 $165.28
3" $361.38 $369.50 $384.28 $399.65 $415.64 $432.27
4" $504.65 $516.33 $536.98 $558.46 $580.80 $604.03
6" $977.44 $1,003.49 $1,043.63 $1,085.38 $1,128.80 $1,173.95 8" $1,517.81 $1,560.23 $1,622.64 $1,687.55 $1,755.05 $1,825.25 10" $2,175.22 $2,238.19 $2,327.72 $2,420.83 $2,517.66 $2,618.37 Fireline Size Fixed Charge ($ per bi-month)
1" $1.01 $1.06 $1.10 $1.14 $1.19 $1.24

1.5" $2.96 $3.08 $3.21 $3.34 $3.47 $3.61
2" $6.31 $6.57 $6.83 $7.10 $7.38 $7.68

2.5" $25.55 $11.81 $12.29 $12.78 $13.29 $13.82
3" $39.06 $19.08 $19.85 $20.64 $21.47 $22.33
4" $113.47 $40.66 $42.29 $43.98 $45.74 $47.57
6" $241.78 $118.12 $122.85 $127.76 $132.87 $138.18
8" $434.82 $251.72 $261.79 $272.26 $283.15 $294.48
10" $702.35 $452.68 $470.79 $489.62 $509.20 $529.57
Variable Charge ($ per HCF)
Single-family Residential
Tier 1 - 0 to 18 HCF $1.91 $2.23 $2.32 $2.41 $2.51 $2.61 Tier 2 - 18 to 50 HCF $2.74 $2.82 $2.93 $3.05 $3.17 $3.30 Tier 3 - Over 50 HCF $3.87 $3.95 $4.11 $4.27 $4.44 $4.62 Multiunit Residential $2.11 $2.23 $2.32 $2.41 $2.51 $2.61 Commercial $2.75 $2.79 $2.90 $3.02 $3.14 $3.27
Irrigation $3.02 $3.13 $3.25 $3.38 $3.52 $3.66
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 3
Chart ES-1 has been prepared to compare the City’s average SFR water bill with those of other communities at the same consumption. The chart indicates that with the proposed June 2024 rates, a SFR customer with a monthly consumption of 35 HCF will experience a bill that is in the mid to upper range of the communities listed.

Table ES-2
Comparison of Current Single-family Residential Bi-monthly Water Bill with 3/4 -inch Meter Size with Proposed Bill Using June 2024 Water Rates
Current Bill Proposed FY 23-24 Bill
Service Volume Current Service Volume Proposed Dollar Percent Description Use (HCF) Charge Charge Bill Charge Charge Bill Difference Change 0 $39.15 $0.00 $39.15 $41.82 $0.00 $41.82 $2.67 6.8%
Very Low 5 $39.15 $9.55 $48.70 $41.82 $11.15 $52.97 $4.27 8.8% Low 10 $39.15 $19.10 $58.25 $41.82 $22.30 $64.12 $5.87 10.1% Median 24 $39.15 $50.82 $89.97 $41.82 $57.06 $98.88 $8.91 9.9% Average 35 $39.15 $80.96 $120.11 $41.82 $88.08 $129.90 $9.79 8.2% 50 $39.15 $122.06 $161.21 $41.82 $130.38 $172.20 $10.99 6.8% High 60 $39.15 $160.76 $199.91 $41.82 $169.88 $211.70 $11.79 5.9% 75 $39.15 $218.81 $257.96 $41.82 $229.13 $270.95 $12.99 5.0% Very High 100 $39.15 $315.56 $354.71 $41.82 $327.88 $369.70 $14.99 4.2% Chart ES-1
Single-family Residential Bi-monthly Water Bills with 3/4-inch Meter Using 37 HCF For Rates in Effect November 2023
Note: Above table uses water rates in effect November 2023. City’s June 2024 bill is based on the rate structure and rates in Table ES-1.
$0 $20 $40 $60 $80 $100 $120 $140 $160
East Valley Water District
Loma Linda May 1, 2024 Bill
West Valley Water District
Current Loma Linda Bill
City of SB Muni Water Dept.

City of Colton
City of Redlands
Yucaipa Valley Water District
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 4
Wastewater Financial Plan
The revenue and revenue requirements of the wastewater system were identified and projected to create a forward-looking financial plan of the wastewater enterprise. Annual costs include operation and maintenance expense (O&M), San Bernardino wastewater treatment expense, capital improvement funding, and repayment of advances from the Water Fund to the Sewer Fund. Projected O&M expenses include the City’s FY 2023-24 Budget expenses for the first year of the financial plan, with future expenses projected through application of inflation factors to budget year expenses. San Bernardino wastewater treatment expenses are offset by charges from the City of San Bernardino to Loma Linda customers. Revenues collected from these charges are remitted to the City of San Bernardino.

The City has prepared a five-year capital improvement program (CIP) spending plan for the wastewater system.

Major projects of the CIP include Juanita Street Sewer Pump Station, sewer line casing, and sewer line replacements. The CIP expenditures total about $713,000 for the period FY 2023-24 to FY 2027-28. The CIP is planned to be funded through the sewer revenues and capital reserves.

The wastewater system currently does not have any outstanding debt. However, in the recent past the Sewer Fund borrowed funds from the Water Fund, and the wastewater financial plan includes repayment of those funds over a five-year period. Payments to the Water Fund are included at $500,000 in FY 23-24 with $165,600 paid annually for four years.

An analysis was performed that compared the projected revenue using the City’s current wastewater rates with the projected revenue requirements (costs) of the wastewater system. The analysis indicated that the current level of revenue being received is sufficient to meet revenue requirements for the Study period. No changes to wastewater rates are proposed in this Study. The wastewater financial plan is presented in Table 29.

Current Wastewater Rates
The current wastewater rates consist of fixed charges for all customers and a variable charge based on water consumption for Non-residential customers. Residential customers are charged a bi-monthly flat charge per billing cycle. Non-residential customers are charged a bi-monthly fixed charge and a variable charge based on water consumption depending on the rate classification. Table ES-3 provides the current wastewater charges by customer classification.

Proposed Wastewater Rate Structure and Rates
The proposed wastewater rates are the same as the current rates. Residential customers are charged a fixed charge per bi-month. Non-residential customer charges include a bi-monthly fixed charge and a variable rate for water consumption. Charges related to treatment of the City’s wastewater is recovered in the San Bernardino charges to City’s customers and are not included in the City’s wastewater rates in this Study. Table ES-3 presents the proposed wastewater rates for the next five years.

Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 5
Wastewater Bill Impacts
There is no impact to wastewater bills from the City’s proposed rates. For a SFR customer, the wastewater bill remains at $38.47 bi-monthly for the Study period. Chart ES-2 has been prepared to compare the City’s SFR wastewater bill with those of other communities. The City’s bill includes the City of San Bernardino treatment charge. The chart indicates that the City’s SFR wastewater bill is in the mid-range of the communities listed.

Table ES-3
Proposed Wastewater Fixed and Variable Charges
Classification Jan 1, 2023
$/bi-month
Residential $38.47
Commercial $8.57
Classification Jan 1, 2023
$/HCF
Class I: MHP (>=4 units) $1.58
Class II: Catergory a 1.98
Class II: Catergory b 1.84
Class III: Auto Service 2.00
Class IV: Laundry, Mortuary 2.11
Class V: Restaurant 2.11
Class VI $1.89
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 6
Chart ES-2
Single-family Residential Bi-monthly Wastewater Bills
For Rates in Effect November 2023
Note: Above table uses wastewater rates in effect November 2023. City’s June 2024 bill is based on the rate structure and rates in Table ES-3 and includes the San Bernardino Treatment charge. $0 $20 $40 $60 $80 $100 $120 $140
West Valley Sanitation District
Yucaipa Valley Water District
City of SB
Loma Linda Current Bill
East Valley Water District
City of Colton
City of Redlands
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 7
Introduction
The City of Loma Linda (City) engaged Tuckfield & Associates to conduct a comprehensive Water and Wastewater Rate Study (Study) for its water and wastewater enterprise systems. The major objectives of the Study are to develop forward-looking financial plans for each enterprise, perform analyses to determine the cost of providing service, and design new water and wastewater rates and charges for implementation.

Background
The City of Loma Linda is an incorporated City located in San Bernardino County in the San Bernardino-Ontario Metropolitan area. The City was formed in 1970 and provides water and wastewater service to a population of over 25,200 in a service area of approximately 7.5 square miles. The City’s customer base consists primarily of residential customers with additional commercial, retail, and public facility customers. Loma Linda University and the Loma Linda University Medical Center are within the City’s service area; however, water service is provided by their own water production and distribution system while wastewater collection is provided to these facilities by the City. The City’s water and wastewater service is identified in separate enterprise funds of the City.

The City obtains its water supply from groundwater, replenishment water, and imported water. Groundwater is pumped from the San Bernardino Basin Area (SBBA) from six wells. The City purchases replenishment water that is injected into the basin to maintain safe yield and the health of the basin. A small amount of water is imported from the San Bernardino Valley Municipal Water District (SBVMWD). Water is delivered through a distribution system consisting of pump stations, storage tanks, pressure reducing valves, and water pipelines.

The City’s wastewater is collected through a system of sewer gravity mains and several lift stations. Wastewater treatment service is provided by the City of San Bernardino at the San Bernardino Water Reclamation Plant treatment plant that provides secondary treatment.

Objectives
The objectives of this Study are to (1) review the current and future financial status of each of the water and wastewater enterprises, (2) make any adjustments to the revenue being received to ensure that the financial obligations are being met now and in the future, including adequate reserves and debt service coverage, and (3) design water and wastewater rates that generate the required revenue while being fair and equitable for its customers. Additionally, the Study also sought to provide the following.  Revenue sufficiency to fund operating and capital needs  Appropriate levels of operating and capital reserves
 Cost of service allocations following appropriate standards, regulations, and guidelines  Rates that are consistent with industry practice
 Rates that are easy to understand and administrate
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 8
Scope of the Study
This Study includes the findings and recommendations of analyzing each of the water and wastewater enterprise’s financial status. Historical trends were analyzed from data supplied by the City showing the number of customers, volumes, revenue, and revenue requirements.

Revenue requirements of each enterprise include operation and maintenance expenses, routine capital outlays, replacement transfers, debt service, and additions to reserves. Changing conditions such as additional facilities, system growth, employee staffing levels, and non-recurring maintenance expenditures are recognized. Inflation for ongoing expenditures is included to reflect cost escalation.

The financial plan and rates developed herein are based on funding of the capital improvement plan as stated as well as estimates of operation and maintenance expenses developed from information provided by the City.

Deviation from the financial plans, construction cost estimates and funding requirements, major operational changes, or other financial policy changes that were not foreseen, may result in the need for lower or higher revenue than anticipated. It is suggested that the City conduct an update to the rate study at least every five years for prudent rate planning.

Assumptions
Several assumptions were used to conduct the Study for the period FY 2023-24 to FY 2027-28. The assumptions included growth rates in customer accounts and annual consumption, interest earnings on reserve balances, and expense inflation factors used for making projections. The financial planning assumptions are provided below in Table 1.

Table 1
Assumptions and Planning Factors
Description Value
Annual Account & Demand growth [1]
Residential 0.5%
All Other 0.0%
Interest earnings on fund reserves (annual) 2.5%
Cost Escalation
Personnel Services [2] 4.0%
Benefits 8.0%
Electrical Power 3.0%
Chemicals 3.0%
Purchased Water 5.0%
All Other Operations & Maintenance 3.0%
Capital 3.0%
[1] Annualized growth in water accounts is based on future growth information provided by staff.
[2] Personnel Services growth in staffing, promotions, and inflation Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 9
City Reserve Policy
A reserve policy sets forth goals for maintaining various reserves for water and wastewater operations and capital spending. The reserve policy provides guidelines to maintain the financial health and stability of the enterprise funds, allowing the enterprises to meet unanticipated reductions in revenues, changes in the costs of providing services, fixed asset repair and replacement needs, natural disasters, and other issues.

The City has established various reserve types for the water and wastewater enterprises. The City’s goals for the amount of the reserves to be held are discussed below.

Operating Reserve – The purpose of the Operating Reserve is to provide working capital to meet cash flow needs during normal operations and support the operation, maintenance and administration of the utility. This reserve ensures that operations can continue should there be significant events that impact cash flow. The target balance to be maintained is 180 days of annual operation and maintenance expenses.

Capital Replacement Reserve – The Capital Replacement Reserve is used to fund future replacement of assets and capital projects. The target balance is equal to 50 percent of annual depreciation expense for both enterprises.

Expansion Reserve – The Expansion Reserve is funds held in an account separate from all other funds. The reserve is accumulated from the collection of capacity charges and may only be spent on capital projects that increase capacity. There is no specific target balance to be maintained for this reserve.

Emergency Reserve – The Emergency Reserve is intended to provide recovery from natural disasters and allow timely repair of capital infrastructure. The target balance to be maintained is equal to 3 percent of fixed asset value.

City Beginning Reserve Balances and Reserve Targets
The reserve balances discussed above are used in developing the financial plans for the water and wastewater utilities. The City’s beginning reserve balances are listed in Table 2 below as of June 30, 2023.

Table 2
June 30, 2023 Estimated Beginning Reserve Balances and Reserve Targets Water Wastewater
Reserve Reserve Reserve Reserve
Reserve Type Balance Target Balance Target
Operating Fund Reserve $2,259,300 $3,775,000 $1,618,807 $1,073,000 Capital Replacement Reserve $708,000 $708,000 $163,000 $163,000 Construction/Expansion Fund Reserve $2,916,700 n/a $450,450 n/a Emergency Reserve $998,000 $998,000 $100,000 $100,000
Total $6,882,000 $5,481,000 $2,332,257 $1,336,000
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 10
Target Reserves discussed above are also stated in the table. The financial plans developed in this Study increase and/or maintain the various reserve types such that the goals are achieved over a ten-year planning period.

Water Financial Planning
Financial planning for the water system includes identifying and projecting revenues and revenue requirements for a five-year planning period. Estimates of revenue from various sources are compared with the projected revenue requirements of the water system. This comparison allows the review of the sufficiency of existing revenue to meet annual revenue requirements and provides the basis for any rate adjustments. New water rates and charges are created to recover the City’s annual operating and capital costs associated with the water system.

This financial planning section of the report discusses current water rates, current user classifications, projected revenues and revenue requirements, capital improvement expenditures and financing sources, and proposed revenue adjustments.

Current Water Fixed and Variable Charges
The current water rates consist of fixed and variable charges to residential and non-residential customers. All customers are charged a bi-monthly fixed charge by meter size and are charged for water consumption. SFR customers are charged a three-tier rate structure while all other customers are charged a uniform variable rate structure. Table 3 provides the current water rates of the water enterprise.

Table 3
Current Water Rates
Meter Size
Water
Service
Private Fire
Protection Customer Class/Tier Variable Rate
($/Bi-mo) ($/Bi-mo) ($/HCF)
5/8" $39.15 $0.00 Single-Family
3/4" $39.15 $0.00 Tier 1 - 0 to 18 HCF $1.91
1" $54.47 $0.00 Tier 2 - 19 to 50 HCF $2.74

1.5" $86.44 $0.00 Tier 3 - Over 50 HCF $3.87
2" $136.00 $21.78 Multifamily/Apartments $2.11
3" $361.38 $25.55 Commercial $2.75
4" $504.65 $31.24 Irrigation $3.02
6" $977.44 $41.29
8" $1,517.81 $61.93
10" $2,175.22 $85.55
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Water User Classifications
Number of Customers
The City currently classifies water customers as Single-family, Multifamily/Apartments, Commercial, and Irrigation.

Residential customers account for more than 84 percent of the total customers served by the water system.

Growth in Residential accounts (including single-family and multifamily dwelling units) is projected to occur at a rate of 0.50 percent annually, following the assumptions listed in Table 1. Table 4 provides the historical and projected number of customers by classification.

Number of Water Meters
Table 5 provides a summary of the number of projected meters by size. The majority of customers have 3/4-inch and 1-inch meters installed at the service location. The growth in residential accounts is assumed to occur with 1- inch meters. All new single-family residential construction will have 1-inch meters due to fire code and this is the minimum size for installation for residential customers in the City’s customer base.

Table 4
Historical and Projected Water Customers by Classification Historical Projected
Customer Class FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Number of Accounts
Single Family [1] 4,784 4,808 4,832 4,856 4,880 4,904
Multifamily/Apartments [1] 398 400 402 404 406 408
Commercial 268 268 268 268 268 268
Irrigation 170 170 170 170 170 170
Total Accounts 5,620 5,646 5,672 5,698 5,724 5,750
Fire Protection
Public Fire Protection 873 873 873 873 873 873
Private Fire Protection 90 90 90 90 90 90
Total Fire Protection Accounts 963 963 963 963 963 963
[1] Residential accounts are forecast to increase based on the assumed growth rate of 0.5% annually.

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Water Financial Plan
The financial plan provides the means of analyzing the revenue and revenue requirements of the water system and its impact on reserves as well as the ability to fund on-going operation and maintenance expense and capital infrastructure requirements. Below is a discussion of the projection of revenue, operation and maintenance expenses, capital improvement needs of the water system and its financing, debt service requirements, and revenue adjustments needed to maintain a sustainable water enterprise.

Revenues
The City receives revenue from operating and miscellaneous sources. Operating revenue is received from rates and charges for water service. Revenue from water rates is projected by applying the current water rates to the projected number of accounts and consumption volume. Projected revenues from water service rates are presented in Table 6.

Table 5
Projected Number of Water Meters by Size
Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Active Water Meters/Accounts [1]
3/4" 3,200 3,200 3,200 3,200 3,200
1" 1,936 1,960 1,986 2,010 2,036

1.5" 159 160 160 161 161
2" 303 304 304 305 305
3" 21 21 21 21 21
4" 14 14 14 14 14
6" 8 8 8 8 8
8" 3 3 3 3 3
10" 2 2 2 2 2
Total Accounts 5,646 5,672 5,698 5,724 5,750
[1] Historical water accounts for FY 22-23 were provided through City billing records.

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Miscellaneous revenue is a source of revenue that includes lease income, repayment advances, meter installations, set-up fees, hydrant rental, reimbursements, and other sources. Table 7 presents the projected miscellaneous revenue.

Revenue Requirements
Revenue requirements of the water system include operation and maintenance expense, capital improvement funding, and debt service payments. Each of these items are discussed below.

Operation and Maintenance Expense
Operation and maintenance expenses (O&M) are an on-going obligation of the water system and such costs are normally met from water service revenue. O&M includes the cost to operate and maintain the water supply, Table 6
Projected Rate-based Water Revenue
[1] FY 23-24 and forecast revenue calculated by multiplying current water rates by the number of projected customers. [2] FY 23-24 and forecast revenue calculated by multiplying projected water sales by the current variable rates.

Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Water Service Revenues
Fixed Charges [1] $1,902,380 $1,911,558 $1,920,056 $1,929,234 $1,937,731 Variable Charges [2] 5,399,990 5,417,287 5,434,589 5,451,889 5,469,188 Subtotal Revenues From Current Rates $7,302,370 $7,328,845 $7,354,645 $7,381,123 $7,406,919 Fire Protection Revenues 130,561 130,561 130,561 130,561 130,561 Total Revenues From Current Rates $7,432,931 $7,459,406 $7,485,206 $7,511,684 $7,537,480 Table 7
Projected Water Miscellaneous Revenue
Budget Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Lease Income $70,600 $72,000 $73,400 $74,900 $76,400
Advances Repayment from Sewer Fund 500,000 165,600 165,600 165,600 165,600 Installation - Connection Fees 10,000 26,600 26,600 26,600 26,600 Utility Account Set Up Fee 25,000 25,500 26,000 26,500 27,000 Miscellaneous Services 84,200 85,900 87,600 89,400 91,200 Hydrant Meter Rental 10,000 10,200 10,400 10,600 10,800 Refunds and Reimbursements 440,000 440,000 440,000 440,000 440,000 Miscellaneous Revenue 50,000 5,000 5,000 5,000 5,000
Damage Claim Recoveries 2,000 - - - -
Total Miscellaneous Revenues $1,191,800 $830,800 $834,600 $838,600 $842,600 Water and Wastewater Rate Study  City of Loma Linda
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reservoirs, and distribution system facilities. Costs also include technical services and other general and administrative expenses.

O&M has been projected recognizing the major expense categories of personnel services, electric power expense, chemicals, purchased water, capital outlay, all other expenses following the inflation factors presented in Table 1.

Table 8 provides a summary of the O&M expenses for the Study period.

Capital Improvement Funding
The City pays for water system replacements and capital improvements from the water and water acquisition funds. The City plans for these expenses through its capital improvement planning during the fiscal year. The annual amount necessary to fund the improvements is included in the water financial plan such that revenue from water rates, as well as from reserves, are providing funding to aid in the cost of these replacements and improvements. Any money not spent accumulates into reserves to be used for future capital improvement spending. Project management overhead expenses are also incurred with each project of the CIP.

Annual Debt Service
The City has one outstanding loan on the water system. The 2016 Water Revenue Refunding Bonds issue has annual debt service payments of about $374,000 and will be retired in FY 2036. A new $4.35M loan from the Special Projects Construction Fund is providing funding to construct the 1.6 MG South Hills reservoir. The loan has a variable interest rate and will be repaid when the City receives Development Impact Fees (DIF) into the Water Acquisitions Fund. An estimated loan payment is used in the Study at 4 percent for 30 years and assumes projections of DIF revenue from the projected customer growth are similar in amount to the estimated payments.

Water Capital Improvement Program
The City has developed a water Capital Improvement Program (CIP) provided in Table 9 that lists capital expenditures for FY 2023-24 through FY 2027-28. Over this period the City projects that it will spend approximately $6,300,000. The major improvements include the South Hill Reservoir, waterline replacements, and other replacements and rehabilitations. The CIP is funded through water revenue, capital reserves, and DIFs.

Table 8
Budget and Projected Water Operation and Maintenance Expense Budget Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Operation and Maintenance Expense
Water Administration 1,530,700 1,595,496 1,663,532 1,735,002 1,810,113 Water Production 4,224,200 4,382,807 4,548,052 4,720,249 4,899,741 Water Transmission and Distribution 1,389,500 1,448,923 1,511,359 1,576,993 1,646,013 Water Meters 404,700 396,228 412,463 429,493 447,366
Total Operation and Maintenance Exp 7,549,100 7,823,454 8,135,406 8,461,737 8,803,233 Water and Wastewater Rate Study  City of Loma Linda
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Water Financial Plan
A financial plan has been prepared that includes the revenues and revenue requirements that were identified for the water system and is presented in Table 10. The plan incorporates specific financial planning goals to provide guidance to maintain the health of the water utility on an on-going basis. The goals included the following.
 Generate positive levels of income in each year of the Study period  Maintain the operating and capital reserves at or greater than target levels  Maintain debt service coverage ratios at or greater than the minimum required  Meet annual capital replacement and improvement spending requirements Proposed Revenue Adjustments
Table 10 provides the annual revenue increases recommended to meet the financial planning criteria for the five-year Study period. The financial plan indicates that a 4.0 percent increase is recommended on June 1, 2024 and then for each January for the remainder of the Study period. The increases are necessary to meet the planning criteria discussed above.

Table 9
Water Capital Improvement Program
Budget Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Current Capital Improvement Program (CIP) Projects [1]
Replace water meters $10,000 $5,200 $5,300 $0 $0
Campus St. - Replace water line 150,000 - - - -
South Hill - Install 1.6 MG reservoir 4,500,000 - - - - Mt. View well No. 3 - Rehabilitation 180,000 - - - -
Mt. View Ave. - Install new PRV 100,000 - - - -
Install new 12" waterline, Beaumont Ave 200,000 - - - - Poplar St - Replace 6" with 8" waterline, Shepardson Dr. - 618,000 - - - Prospect Ave.- Replace 6" with 8" waterline , Poplar St. - - 530,500 - - Total Water CIP $5,140,000 $623,200 $535,800 $0 $0
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Table 10
Water Financial Plan
Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Proposed Revenue Increase (June 1) 4.0%
Proposed Revenue Increase (January 1) 4.0% 4.0% 4.0% 4.0% Revenue
Revenues from Existing Water Rates [1] $7,432,931 $7,459,406 $7,485,206 $7,511,684 $7,537,480 Total Additional Water Sales Revenue [2] - 427,672 745,726 1,078,765 1,427,269 Miscellaneous Income 1,191,800 830,800 834,600 838,600 842,600 Interest Income [3] 171,315 167,754 163,123 168,594 183,034 Total Revenues $8,796,046 $8,885,632 $9,228,655 $9,597,643 $9,990,383 Operations
Operation and Maintenance Expense $7,549,100 $7,823,454 $8,135,406 $8,461,737 $8,803,233 Capital Outlay - - - - -
2016 Water Bonds Debt Service 371,756 372,381 367,725 367,788 368,875 New Debt Service [4] - 251,600 251,600 251,600 251,600
Net Funds Available Before Capital $7,920,856 $8,447,435 $8,754,731 $9,081,125 $9,423,708 Capital
Sources of Funds
Development Impact Fees $979,600 $209,736 $209,736 $209,736 $209,736 Interest from Other Agencies 25,000 - - - -
New Debt Proceeds 4,350,000 - - - -
Total Capital Sources of Funds $5,354,600 $209,736 $209,736 $209,736 $209,736 Uses of Funds
Capital Improvement Projects (CIP) $5,140,000 $623,200 $535,800 $0 $0 Repairs and Maintenance 122,400 - - - -
Project Management Overhead 1,026,200 121,524 104,481 - - Total Capital Uses of Funds 6,288,600 744,724 640,281 - - Net Funds Available After Capital ($58,810) ($96,791) $43,379 $726,255 $776,411 Available Reserves
Beginning available reserves [5] $6,882,000 $6,823,190 $6,726,399 $6,769,778 $7,496,032 Additions (reductions) (58,810) (96,791) 43,379 726,255 776,411 Rate Stabilization Set Aside - - - - -
Ending available reserves $6,823,190 $6,726,399 $6,769,778 $7,496,032 $8,272,443 Target Reserves [6] $5,481,000 $5,769,000 $5,919,000 $6,074,000 $6,222,000 Above (below) Target $1,342,190 $957,399 $850,778 $1,422,032 $2,050,443 Debt Service Coverage
Net Revenues [7] $1,102,946 $1,150,390 $1,198,504 $1,345,642 $1,396,886 Annual Debt Service 371,756 623,981 619,325 619,388 620,475 Coverage [8] 297% 184% 194% 217% 225%
[1] Projected using the existing rates.
[2] Additional revenue from proposed rate adjustments.
[3] Interest earnings on the average fund balance calculated at 2.50%. [4] Loan from Special Projects Construction Fund at 4.0% for 30 years. [5] The available beginning FY 23-24 cash balance provided by District. [6] Target reserve includes Operating, Capital, and Emergency Capital reserves. [7] Includes capacity charge revenue, property tax revenue, and miscellaneous and interest income. [8] Minimum coverage is 125 percent.

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Cost of Service
This section of the report discusses how the water system’s operating and capital costs are allocated for use in designing rates. Establishing rates in California requires that the agency responsible for imposing property-related fees create a nexus between the cost of providing service and the rates to be imposed.

Industry Methodology
This Study uses methodologies from the American Water Works Association (AWWA) to allocate costs in an appropriate manner. AWWA is an industry trade organization that provides guidance on operations and management of water utilities. General principles are provided to assist agencies with the design of water rates such that the rates may be consistent with local requirements while also recognizing state laws and legal framework. The AWWA guidelines have been used to conduct this Study and have been used in the design of the City’s water rates while also following Proposition 218 and the recent San Juan Capistrano court decision.

The annual costs of providing water service from the financial plan are allocated to cost components according to industry standards provided in the AWWA Manual M1. The methodology provides the basis to design rates to generate adequate revenue to meet estimated annual revenue requirements from the financial plan. Costs are then recovered through the design of fixed and variable charges.

Costs of Service to be Allocated
The annual cost of providing service consists of O&M expenses and capital costs of the water system. O&M expenses include costs related to water supply, water distribution, maintenance of the facilities, and general and administrative costs. Capital costs include annual capital improvement funding and debt service discussed in the financial plan.

Water rates are designed from cost allocations to water system cost components, based on the operating characteristics and design of the water system facilities. Cost allocations consider the average rate of water consumed as well as the peak rate at which water is consumed based on the design of the water system. Costs are recovered through fixed and variable charges that are related to average and peak demands as well as customer related costs.

The cost allocation components for water service are Water Supply (groundwater, replenishment, and import), Delivery, Peaking, Meters and Services, Customer, and Direct Fire Protection. FY 2023-24 operating and capital costs of the water system are assigned to each of these components. The total cost to be recovered from the users of the water system by cost component for FY 2023-24 is presented in Table 11. Appendix A provides a detailed allocation of revenue requirements to cost component.

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Water Rate Design
The cost of service analyses described in the previous section provides the basis for water rate design. The goal of the design of rates is to achieve fairness while ensuring that each customer class pays its fair share of costs.

Rates should be simple to administer, easy to understand, and comply with regulatory requirements. This section describes how water rates and charges are designed and includes the proposed schedule of water rates for implementation.

Proposed Rate Structure
The proposed water rate structure maintains the current rate structure. The current rate structure includes fixed charges by meter size, and a three-tier variable charge for SFR customers and a uniform volume charge for all other customers. The design of the fixed charges and variable charges are discussed below.

Proposed Fixed Charges
The proposed fixed charges recover the Meters and Services and Customer costs of service identified in Table 11, and additionally recover capacity costs related to public fire protection. Meters and Services costs are recovered on meter and service ratios provided by AWWA. Customer costs are recovered on the number of bills issued.

Public fire protection costs are recovered based on meter capacity ratios provided by AWWA. Public fire protection costs are developed through the allocations presented in Appendix A-2.

Table 12 below presents the design of the proposed monthly fixed charges for water customers. The current fixed charges generate about 25 percent of revenue from water rates. The proposed fixed charges also generate approximately 25 percent of the revenue from water rates.

Table 11
Allocation of Water Revenue Requirements to Cost Component Total
Revenue Water Supply Peaking Customer Direct Fire
Year Requirement Imported Replenish Groundwater Delivery Max Day Max Hour Meters/Serv Customer Protection FY 23-24 $7,730,248 $78,540 $270,000 $1,290,060 $2,375,752 $1,660,845 $743,127 $879,512 $222,200 $210,212 Water and Wastewater Rate Study  City of Loma Linda
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Fixed charges for meter sizes greater than 3/4 inch are increased through application of cost ratios as shown below in Table 13. The Meter and Service charge is increased through meter and service ratios while the public fire protection charge is increased through meter capacity ratios. The Customer charge is a charge per bill and does not increase with meter size. The charges are summed to provide the total bi-monthly charge by meter size as shown in the last column of Table 13.

Table 12
Design of Water Fixed Charges
Customer Service Cost FY 23-24
Customer Cost $222,200
Number of Bills 33,876
Customer Cost per Unit $6.56
Meters and Services Cost FY 23-24
Meters and Services Cost $879,512
Number of Equivalent Meters & Services 44,473
Meters and Services Cost per Unit $19.78
Public Fire Capacity Costs FY 23-24
Public Fire Protection $905,837
Number of Equivalent Meters 58,500
Public Fire Capacity Costs per Unit $15.48
Base Fixed Charge - 3/4" meter $41.82
Table 13
Design of Water Fixed Charges by Meter Size
Meter & Meter & Meter Public Total
Meter Service Services Capacity Fire Customer Bi-monthly Size Ratio Charge Ratio Protection Charge Charge
inches
3/4" 1.00 $19.78 1.00 $15.48 $6.56 $41.82
1" 1.27 $25.17 1.67 $25.81 $6.56 $57.54

1.5" 1.64 $32.36 3.33 $51.61 $6.56 $90.53
2" 2.64 $52.14 5.33 $82.58 $6.56 $141.28
3" 10.00 $197.77 10.67 $165.17 $6.56 $369.50
4" 12.73 $251.70 16.67 $258.07 $6.56 $516.33
6" 19.09 $377.55 40.00 $619.38 $6.56 $1,003.49
8" 26.36 $521.38 66.67 $1,032.29 $6.56 $1,560.23
10" 34.55 $683.19 100.00 $1,548.44 $6.56 $2,238.19
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The fixed charges for years beyond FY 2023-24 are increased at the percentages identified in the financial plan in Table 10 and are presented in Table 14.

Private Fire Protection Fixed Charges. Annual costs allocated to the Fire Protection cost component are separated into Public and Private Fire Protection costs. Public Fire Protection costs are included in the service charges as shown in Table 12 and Table 13. Private Fire Protection costs are recovered from those customers that receive the direct fire protection benefit. The cost by equivalent (6”) private fireline size is provided in Table 15.

The 6” Private Fire Protection charge is increased or decreased based on fire hydrant ratios provided by the AWWA as provided in Table 16. The private fire protection charges for years beyond FY 2023-24 are increased with the percentages identified in Table 10 and are shown in Table 16.

Table 14
Proposed Water Fixed Charges by Meter Size
Current June 1, January 1, January 1, January 1, January 1, Rate FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28
Meter Size Fixed Charge ($ per bi-month)
3/4" $39.15 $41.82 $43.49 $45.23 $47.04 $48.92
1" $54.47 $57.54 $59.84 $62.23 $64.72 $67.31

1.5" $86.44 $90.53 $94.15 $97.92 $101.84 $105.91
2" $136.00 $141.28 $146.93 $152.81 $158.92 $165.28
3" $361.38 $369.50 $384.28 $399.65 $415.64 $432.27
4" $504.65 $516.33 $536.98 $558.46 $580.80 $604.03
6" $977.44 $1,003.49 $1,043.63 $1,085.38 $1,128.80 $1,173.95 8" $1,517.81 $1,560.23 $1,622.64 $1,687.55 $1,755.05 $1,825.25 10" $2,175.22 $2,238.19 $2,327.72 $2,420.83 $2,517.66 $2,618.37 Table 15
Design of Private Fire Protection Charge
Fire Protection Cost FY 23-24
Private Fire Protection $63,786
Private Fire Protection Eq. Hydrants 540
Private Fire Protection 6" Charge $118.12
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Proposed Variable Charges
Variable charges are designed to recover the Water Supply, Delivery, and Peaking costs from Table 11.

Consumption and peaking characteristics of water system customers were analyzed to allocate costs to customer classification as well as between each tier. Water Supply costs, consisting of groundwater, replenishment, and imported water, were allocated to each tier based on water availability and the demand of each tier.

Tier Definitions. For Single-family Residential (SFR) customers, Tier 1 is defined as consumption to provide basic indoor water use and is based on an assumed 4 persons per household (pph) using 55 gallons per capita per day (gcpd) resulting in a Tier 1 breakpoint of 18 HCF (4 pph x 55 gpcd ÷ 748 gal/HCF x 365 days ÷ 6 bi-monthly billing periods). Tier 2 is defined as consumption related to outdoor water use and is all water consumed beyond Tier 1 and below Tier 3. Tier 3 is defined as excessive use beyond Tier 2 to encourage water conservation. The Tier 3 breakpoint is defined as the SFR summer peak demand, determined from billing information to be 50 HCF.

For the other customer classes of Multifamily/Apartments, Commercial, and Irrigation, these classes will have an individual uniform volume rate structure, however each also recognizes the peaking characteristics of each class in their variable rate. A uniform variable rate structure is recommended for these classes as most of the Multifamily and Commercial customers have separate Irrigation meters.

Delivery Costs. Delivery costs are those operating and capital costs that tend to vary with the total quantity of water consumed associated with service to customers under average-load conditions, without the cost elements of water supply or costs to meet peak system demands. These costs include a portion of O&M expense and capital costs related to treatment, pumping, and distribution and are shared uniformly by all customers of the system.

Table 17 provides the per unit Delivery cost.

Table 16
Proposed Bi-monthly Private Fire Protection Charges
Fireline Hydrant Current May 1, January 1, January 1, January 1, January 1, Size Ratio Charge FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 inches
1" 0.01 $1.01 $1.06 $1.10 $1.14 $1.19 $1.24

1.5" 0.03 $2.96 $3.08 $3.21 $3.34 $3.47 $3.61
2" 0.06 $6.31 $6.57 $6.83 $7.10 $7.38 $7.68

2.5" 0.10 $25.55 $11.81 $12.29 $12.78 $13.29 $13.82
3" 0.16 $39.06 $19.08 $19.85 $20.64 $21.47 $22.33
4" 0.34 $113.47 $40.66 $42.29 $43.98 $45.74 $47.57
6" 1.00 $241.78 $118.12 $122.85 $127.76 $132.87 $138.18 8" 2.13 $434.82 $251.72 $261.79 $272.26 $283.15 $294.48 10" 3.83 $702.35 $452.68 $470.79 $489.62 $509.20 $529.57 Water and Wastewater Rate Study  City of Loma Linda
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Peaking Costs. Peaking costs are costs associated with meeting peak demand rates of use requirements of the water system and include operating and capital costs beyond that required for average rates of use. Water system facilities are designed to meet peak characteristics and are apportioned to customer classes based on their system use characteristics. Peaking costs may be assigned to tiers in a tiered-rate structure based on the customers within the tier that are causing the peak demand.

Peaking costs are first allocated to each customer class based on their total demand. Then for SFR, peaking costs are allocated to the defined tiers based on the peaking factors that occur from customer use within the tiers based on the tier break points discussed above. Tier 1 is considered to have a peaking factor of 1.0, Tier 2 and Tier 3 have peaking factors that reflect the average use per customer within these tiers as a ratio to Tier 1.

Table 18 presents the SFR consumption, peaking factor, peaking cost allocation, and the resulting rate by tier for SFR customers.

Water Supply Costs. The City’s water supply consists of three sources including groundwater, replenishment water, and imported water. Groundwater accounts for about 77 percent of the total water supply. Recently, the City has implemented a Groundwater Replenishment Program to ensure the reliability of the groundwater source.

The Replenishment water is the least expensive source and accounts for nearly 22 percent of the total water Table 17
Design of Uniform Volume Rate for Delivery Costs
Delivery Uniform
Customer Class Costs Volume Rate
Single Family $1,150,017 1,012,290 $1.14
Multifamily/Apartments 465,360 409,628 $1.14
Commercial 340,543 299,759 $1.14
Irrigation 419,834 369,554 $1.14
Total Cost of Service $2,375,752 2,091,231 $1.14
Table 18
Design of Single-family Residential Peaking Rate
Percent Peaking
Consumption Peaking Weighted Cost Rate in
Tier in Tier Consumption Factor Consumption Allocation Tier Tier 1 - 0 to 18 HCF 47.3% 478,657 1.00 478,657 205,632 $0.43 Tier 2 - 18 to 50 HCF 36.7% 371,241 2.06 766,130 329,132 $0.89 Tier 3 - Over 50 HCF 16.0% 162,392 4.46 724,948 311,440 $1.92 100.0% 1,012,290 1,969,735 $846,204
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supply. The most expensive water is imported water purchased from SBVMWD consisting of less than 500 acrefeet (AF) annually, and accounts for less than 1 percent of the total water supply.

The sources of water supply are allocated to each tier assuming the least expensive source of water is used first, followed by remaining sources in order of cost to meet the demand. Table 19 provides the City’s demand by tier, the water supply source used to meet the demand in the tier, the costs associated with the water supply, and the resulting water supply rate in the tier.

Table 20 provides a summary of the variable rate components from Tables 17 through 19 applicable to each customer classification. Each class pays for the same Delivery costs; however, each class pays for their individual peaking requirements and differentiated water supply costs. SFR pays for a more expensive water supply in Tier 3 due to the customers in that tier causing the City to obtain more expensive water to meet that demand. Other customers pay for a blend of water supply based on their consumption within the defined tiers.

Table 19
Design of Water Supply Costs by Tier
Projected Consumption Met By Water Water
Tier Consumption Groundwater Replenish Imported Supply Costs Supply Rates HCF HCF HCF HCF $ $/HCF
Tier 1 - 0 to 18 HCF 783,561 310,417 473,144 $517,552 $0.66 Tier 2 - 18 to 50 HCF 491,466 491,466 391,936 $0.80
Tier 3 - Over 50 HCF 816,203 815,781 423 729,112 $0.89
Total 2,091,230 1,617,665 473,144 423 $1,638,600
Table 20
Design of Water Rate Structure
[1] Peaking Differentiated Supply costs represent a blended rate.

Differentiated Proposed
Delivery Peaking Supply Volume
Customer Class Costs Costs Costs Rate
Single Family
Tier 1 - 0 to 18 HCF $1.14 $0.43 $0.66 $2.23
Tier 2 - 18 to 50 HCF $1.14 $0.89 $0.80 $2.82
Tier 3 - Over 50 HCF $1.14 $1.92 $0.89 $3.95
Multifamily/Apartments [1] $1.14 $0.37 $0.73 $2.23
Commercial [1] $1.14 $0.78 $0.87 $2.79
Irrigation [1] $1.14 $1.12 $0.87 $3.13
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Proposed Water Rates
Table 21 presents the proposed fixed and variable charges for the water system for the next five years. Current fixed charges are provided as well as the proposed fixed charges for June 1, 2024 developed in the tables above, and the proposed fixed charges for each January 1 through January 1, 2028. The table also includes the current and proposed uniform volume rates for SFR customers all other customers developed in this Study. SFR customers have a tiered rate structure while all other customers have a uniform volume rate structure. The variable charges are proposed for implementation beginning on June 1, 2024 and each January 1 through January 1, 2028.

Table 21
Proposed Water Fixed and Variable Charges
Current June 1, January 1, January 1, January 1, January 1, Rate FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28
Meter Size Fixed Charge ($ per bi-month)
3/4" $39.15 $41.82 $43.49 $45.23 $47.04 $48.92
1" $54.47 $57.54 $59.84 $62.23 $64.72 $67.31

1.5" $86.44 $90.53 $94.15 $97.92 $101.84 $105.91
2" $136.00 $141.28 $146.93 $152.81 $158.92 $165.28
3" $361.38 $369.50 $384.28 $399.65 $415.64 $432.27
4" $504.65 $516.33 $536.98 $558.46 $580.80 $604.03
6" $977.44 $1,003.49 $1,043.63 $1,085.38 $1,128.80 $1,173.95 8" $1,517.81 $1,560.23 $1,622.64 $1,687.55 $1,755.05 $1,825.25 10" $2,175.22 $2,238.19 $2,327.72 $2,420.83 $2,517.66 $2,618.37 Fireline Size Fixed Charge ($ per bi-month)
1" $1.01 $1.06 $1.10 $1.14 $1.19 $1.24

1.5" $2.96 $3.08 $3.21 $3.34 $3.47 $3.61
2" $6.31 $6.57 $6.83 $7.10 $7.38 $7.68

2.5" $25.55 $11.81 $12.29 $12.78 $13.29 $13.82
3" $39.06 $19.08 $19.85 $20.64 $21.47 $22.33
4" $113.47 $40.66 $42.29 $43.98 $45.74 $47.57
6" $241.78 $118.12 $122.85 $127.76 $132.87 $138.18
8" $434.82 $251.72 $261.79 $272.26 $283.15 $294.48
10" $702.35 $452.68 $470.79 $489.62 $509.20 $529.57
Variable Charge ($ per HCF)
Single-family Residential
Tier 1 - 0 to 18 HCF $1.91 $2.23 $2.32 $2.41 $2.51 $2.61 Tier 2 - 18 to 50 HCF $2.74 $2.82 $2.93 $3.05 $3.17 $3.30 Tier 3 - Over 50 HCF $3.87 $3.95 $4.11 $4.27 $4.44 $4.62 Multiunit Residential $2.11 $2.23 $2.32 $2.41 $2.51 $2.61 Commercial $2.75 $2.79 $2.90 $3.02 $3.14 $3.27
Irrigation $3.02 $3.13 $3.25 $3.38 $3.52 $3.66
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 25
Water Bill Impact Analysis
An impact analysis was performed to evaluate the change in SFR customer bills that would occur from the implementation of the proposed water rates for the June 2024 rate implementation. The impacts are provided in Table 22 below. For a SFR customer with a 3/4-inch meter size using the average consumption of 35 hundred cubic feet (HCF) bi-monthly, the bill will increase from $120.11 to $129.90, an increase of $9.79 or 8.2 percent.

The 8.2 percent increase is higher than the overall 4.0 percent revenue increase required in the water financial plan due to cost of service adjustments the first year of the rate plan. Subsequent year rates increase at the percentages from the water financial plan in Table 10. Current and the proposed water bills for a SFR customer with a ¾-inch meter using various levels of consumption are shown in Table 22.

Water Rate Survey
A water rate survey was conducted for neighboring communities to the City of Loma Linda. Chart 1 compares the City’s SFR bi-monthly water bill with those of neighboring communities at the same consumption of 35 HCF bimonthly (the City’s SFR average consumption). The rate survey includes rate schedules in effect November 2023.

Water bills for the City are shown using the current rates and the proposed rates for implementation June 1, 2024.

The chart indicates that with the proposed June 2024 water rates, a SFR customer using the average monthly consumption of 35 HCF will experience a bill that is in the mid to upper range of the communities listed.

Table 22
Comparison of Current Single-family Residential Bi-monthly Water Bill with 3/4-inch Meter Size with Proposed Bill Using June 2024 Water Rates
Current Bill Proposed FY 23-24 Bill
Service Volume Current Service Volume Proposed Dollar Percent Description Use (HCF) Charge Charge Bill Charge Charge Bill Difference Change 0 $39.15 $0.00 $39.15 $41.82 $0.00 $41.82 $2.67 6.8%
Very Low 5 $39.15 $9.55 $48.70 $41.82 $11.15 $52.97 $4.27 8.8% Low 10 $39.15 $19.10 $58.25 $41.82 $22.30 $64.12 $5.87 10.1% Median 24 $39.15 $50.82 $89.97 $41.82 $57.06 $98.88 $8.91 9.9% Average 35 $39.15 $80.96 $120.11 $41.82 $88.08 $129.90 $9.79 8.2% 50 $39.15 $122.06 $161.21 $41.82 $130.38 $172.20 $10.99 6.8% High 60 $39.15 $160.76 $199.91 $41.82 $169.88 $211.70 $11.79 5.9% 75 $39.15 $218.81 $257.96 $41.82 $229.13 $270.95 $12.99 5.0% Very High 100 $39.15 $315.56 $354.71 $41.82 $327.88 $369.70 $14.99 4.2% Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 26

Chart 1
Single-family Residential Bi-monthly Water Bills with 3/4-inch Meter Using 37 HCF For Rates in Effect November 2023
Note: Above table uses water rates in effect November 2023. City’s June 2024 bill is based on the rate structure and rates in Table 21.
$0 $20 $40 $60 $80 $100 $120 $140 $160
East Valley Water District
Loma Linda May 1, 2024 Bill
West Valley Water District
Current Loma Linda Bill
City of SB Muni Water Dept.

City of Colton
City of Redlands
Yucaipa Valley Water District
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 27
Wastewater Financial Planning
Financial planning for the wastewater enterprise includes identifying and projecting revenues and revenue requirements of the wastewater system for a five-year planning period. Estimates of revenue from various sources are compared with the projected revenue requirements. This comparison allows the review of the adequacy of existing revenue to meet annual obligations and provide the basis for revenue adjustments. New wastewater rates and charges may be created to recover the City’s annual operating and capital costs associated with the wastewater system.

This section discusses the current wastewater rates, user classifications, revenues and revenue requirements, planned capital improvement expenditures and financing sources, and proposed revenue adjustments.

Current Wastewater Rates
The current wastewater rates consist of fixed charges and variable charges. Residential (including single-family dwellings and multifamily with 1 to 3 dwellings) customers are charged a fixed charge per month. Non-Residential customer rates include a fixed charge and variable charge based on water consumption depending on a classification into one of seven classifications. The current rates are presented in Table 23.

Table 23
Current Wastewater Fixed and Variable Charges
Classification Jan 1, 2023
$/bi-month
Residential $38.47
Commercial $8.57
Classification Jan 1, 2023
$/HCF
Class I: MFR (>=4 units) $1.58
Class II: Catergory a 1.98
Class II: Catergory b 1.84
Class III: Auto Service 2.00
Class IV: Laundry, Mortuary 2.11
Class V: Restaurant 2.11
Class VI $1.89
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 28
Wastewater User Classifications
Number of Customers
The City currently classifies wastewater customers as Single-family Residential, Multifamily Residential, and Commercial, with Commercial being further classified into one of seven classifications. Residential customers account for about 87 percent of the total customers served by the wastewater system. Residential accounts and dwelling units are projected to grow at a rate of 0.50 percent annually following the assumptions listed in Table 1.

Table 24 provides the historical and projected number of customers by classification.

Wastewater Financial Plan
The financial plan provides the means of analyzing the revenue and revenue requirements of the wastewater system and its impact on reserves as well as the ability to fund on-going operation and maintenance expense and capital infrastructure requirements. Below is a discussion of the projection of revenue, operation and maintenance expenses, capital improvement needs of the wastewater system and its financing, debt service, and revenue adjustments needed to maintain a sustainable wastewater enterprise.

Table 24
Historical and Projected Wastewater Customers by Classification [1] Accounts are forecast to increase based on the assumed growth rate of 0.5% annually from Table 1.

Historical Projected
Customer Class FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Number of Accounts
Single-family [1] 4,542 4,565 4,588 4,611 4,634 4,657
Multi Family (4+ units, Mobile Home Parks) 359 361 363 365 367 369 Commercial Class IIA- Non Offices (Retail, 80 80 80 80 80 80 Commercial Class IIB 60 60 60 60 60 60
Commercial Class III (Auto Repair, Car Wash) 11 11 11 11 11 11 Commercial Class IV (Laundromat) 2 2 2 2 2 2
Commercial Class V (Restaurants, Hotels) 28 28 28 28 28 28 Class VI (Institutional, LLU) 1 1 1 1 1 1
Class VI (Hospital, Convalescent Homes) 0 0 0 0 0 0
Class VI (Churches) 6 6 6 6 6 6
VA 3 3 3 3 3 3
Class VI (Hospitals) 24 24 24 24 24 24
Class VI (Schools) 6 6 6 6 6 6
Sewer Flat Rate 565 565 565 565 565 565
Total Accounts 5,687 5,712 5,737 5,762 5,787 5,812
Number of Dwelling Units
Single-family [1] 4,542 4,565 4,588 4,611 4,634 4,657
Multi Family (4+ units, Mobile Home Parks) [1] 4,515 4,538 4,561 4,584 4,607 4,630 Total Dwelling Units 9,057 9,103 9,149 9,195 9,241 9,287 Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 29
Revenues
The City receives wastewater revenue from operating and miscellaneous sources. Operating revenue is received from rates and charges for wastewater service. The revenue is projected by applying the current wastewater rates from Table 23 to the projected number of accounts and non-residential water consumption. Table 25 presents the projected fixed and variable charge revenue from current wastewater rates of the wastewater system.

Miscellaneous revenue includes City of San Bernardino pass-through revenue and miscellaneous income. The City collects revenue for wastewater treatment to its customers from charges and remits this to the City of San Bernardino. Projected revenue collected from City of San Bernardino wastewater treatment charges and other miscellaneous revenue is presented in Table 26.

Table 25
Projected Rate-based Wastewater Revenue Using Current Rates [1] FY 23-24 and forecast revenue calculated by multiplying current wastewater service charges by the number of projected customers and units. [2] FY 23-24 and forecast revenue calculated by multiplying projected water sales volume of wastewater customers by the current variable rates.

Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Wastewater Service Revenues
Fixed Charges [1] $1,112,672 $1,118,084 $1,123,495 $1,128,907 $1,134,319 Variable Charges [2] 1,416,335 1,419,486 1,422,636 1,425,788 1,428,939 Total Revenues From Current Rates $2,529,007 $2,537,570 $2,546,131 $2,554,695 $2,563,258 Table 26
Projected Wastewater Miscellaneous Revenue
Budget Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Miscellaneous Income $60,000 $0 $0 $0 $0
Refund and Reimbursements 600 500 500 500 500
San Bernardino Pass-Through Revenue $3,502,200 $3,642,288 $3,787,980 $3,939,499 $4,097,079 Total Miscellaneous Revenues $3,562,800 $3,642,788 $3,788,480 $3,939,999 $4,097,579 Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 30
Revenue Requirements
Revenue requirements of the wastewater system include operation and maintenance expense, capital improvement funding, City of San Bernardino treatment expense, and advances repayment. Each of these items are discussed below.

Operation and Maintenance Expense
Operation and maintenance expenses (O&M) are an on-going obligation of the wastewater system and such costs are normally met from wastewater service revenue. O&M includes the cost to operate and maintain the wastewater collection system. Costs also include technical services and other general and administrative expenses.

O&M has been projected recognizing the major expense categories of personnel services, electric power expense, chemicals, purchased water, capital outlay, all other expenses following the inflation factors presented in Table 1.

Table 27 provides a summary of the wastewater O&M expenses for the Study period.

Capital Improvement Funding
The City pays for wastewater system replacements and capital improvements from the sewer and sewer capital funds. The City plans for these expenses through its capital improvement planning during the fiscal year. The annual amount necessary to fund the improvements is included in the wastewater financial plan such that revenue from wastewater rates, as well as from reserves, are providing funding to aid in the cost of these replacements and improvements. Any money not spent accumulates into reserves to be used for future capital improvement spending. Project management overhead expenses are also incurred with each project of the CIP.

Advances Repayment
In the past, the City borrowed funds from the water enterprise to meet annual wastewater revenue requirements.

The wastewater financial plan proposes to repay the borrowed funds to the Water Fund in an amount of $500,000 in FY 2023-24, then about $165,600 annually for four years.

Table 27
Projected Wastewater Operation and Maintenance Expense
Budget Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Maintenance Personnel Services $807,700 $851,164 $897,258 $946,161 $998,061 Maintenance and Operations 4,839,800 5,020,016 5,207,040 5,401,129 5,602,557 Total $5,647,500 $5,871,180 $6,104,298 $6,347,290 $6,600,618 Water and Wastewater Rate Study  City of Loma Linda
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Wastewater Capital Improvement Program
The City has developed a wastewater CIP that lists capital expenditures for FY 2023-24 through FY 2027-28, presented in Table 28. Major projects include only collection system improvements including pump station installation and repairs and sewer line replacements since the City does not own treatment facilities. The CIP is funded through wastewater revenues, capital reserves, and DIFs.

Wastewater Financial Plan
A financial plan has been prepared for the wastewater utility that includes the revenues and revenue requirements that were identified for the wastewater system and is presented in Table 29. The plan incorporates specific financial planning goals to provide guidance to maintain the health of the wastewater utility on an on-going basis. The goals included the following.  Generate positive levels of income in each year of the Study period  Maintain the operating and capital reserves at or greater than target levels  Maintain debt service coverage ratios at or greater than the minimum required  Meet annual capital replacement and improvement spending requirements Proposed Revenue Adjustments
Analysis of the revenues and revenue requirements of the wastewater financial plan indicates that no revenue increases are necessary. Revenue currently being received is sufficient to meet the financial planning criteria discussed above. Table 29 provides the wastewater financial plan.

Table 28
Wastewater Capital Improvement Program
Budget Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Current Capital Improvement Projects (CIP) [1]
Install sewer pump station at the end of Juanita St. $250,000 $0 $0 $0 $0 Campus St. - Jack and bore steel pipe casing at UPRR - 206,000 - - - Lilac St. - Pipe bursting from 8" to 12" sewerline - 257,500 - - - Total Wastewater CIP $250,000 $463,500 $0 $0 $0
Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 32
Table 29
Wastewater Financial Plan
Projected
Description FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 Proposed Revenue Increase (June 1) 0.0%
Proposed Revenue Increase (January 1) 0.0% 0.0% 0.0% 0.0% Sources of Funds
Rate-based Revenues, Existing Rates [1] $2,529,007 $2,537,570 $2,546,131 $2,554,695 $2,563,258 Total Additional Water Sales Revenue [2] 0 0 0 0 0
Miscellaneous Income 60,600 500 500 500 500
Invoiced San Bernardino Charges 3,502,200 3,642,288 3,787,980 3,939,499 4,097,079 Interest Income [3] 78,284 76,400 69,839 73,943 75,997
Total Sources of Funds $6,170,091 $6,256,758 $6,404,450 $6,568,637 $6,736,834 Operations
O&M and Capital Outlay $2,145,300 $2,228,892 $2,316,318 $2,407,791 $2,503,539 San Bernardino Treatment Service 3,502,200 3,642,288 3,787,980 3,939,499 4,097,079 Advances Repayment 500,000 165,600 165,600 165,600 165,600 Net Funds Before Capital $6,147,500 $6,036,780 $6,269,898 $6,512,890 $6,766,218 Capital
Sources of Funds
Development Imnpact Fees $176,900 $69,000 $69,000 $69,000 $69,000 Total Sources of Capital Funds $176,900 $69,000 $69,000 $69,000 $69,000 Uses of Funds
Capital Improvements $250,000 $463,500 $0 $0 $0
Project Management Overhead 48,800 90,383 0 0 0
Total Uses of Capital Funds $298,800 $553,883 $0 $0 $0
Net Funds Available After Capital ($99,309) ($264,905) $203,552 $124,747 $39,616 Available Reserves
Beginning available reserves [4] $3,056,000 $2,956,691 $2,691,786 $2,895,338 $3,020,085 Additions (reductions) (99,309) (264,905) 203,552 124,747 39,616 Ending available reserves $2,956,691 $2,691,786 $2,895,338 $3,020,085 $3,059,701 Target Reserves [5] $1,261,000 $1,305,000 $1,351,000 $1,400,000 $1,450,000 Above (below) Target $1,695,691 $1,386,786 $1,544,338 $1,620,085 $1,609,701 Debt Service Coverage
Net Revenues $650,691 $364,195 $369,152 $290,347 $205,216 Annual Debt Service $0 $0 $0 $0 $0
Coverage 0% 0% 0% 0% 0%
[1] Projected using the existing rates.
[2] Additional revenue from revenue adjustments.
[3] Interest earnings on the average fund balance calculated at 2.50%. [4] The available FY 23-24 reserve balance provided by the City. [5] Target reserve includes Operating, Capital, and Emergency Capital reserves.

Water and Wastewater Rate Study  City of Loma Linda
Tuckfield & Associates 33
Wastewater Rate Survey
A wastewater rate survey was conducted for neighboring communities to the City of Loma Linda. Chart 2 compares the City’s current and proposed SFR bi-monthly wastewater bill with those of neighboring communities.

The chart indicates that a City SFR customer will experience a bill that is in the mid-range of the communities surveyed.

Chart 2
Single-family Residential Bi-monthly Wastewater Bills
For Rates in Effect November 2023
Note: Above table uses wastewater rates in effect November 2023. City’s June 2024 bill is based on the rate structure and rates in Table 23 and includes the San Bernardino Treatment charge.
$0 $20 $40 $60 $80 $100 $120 $140
West Valley Sanitation District
Yucaipa Valley Water District
City of SB
Loma Linda Current Bill
East Valley Water District
City of Colton
City of Redlands
Tuckfield & Associates 34
Appendix A
Water Cost of Service Allocation is provided in Appendix A.

Tuckfield & Associates 35

Appendix A-1
Allocation of Water Revenue Requirements to Cost Component [1] Adjustment accounts for a partial year rate increase.

Line Total Water Supply Peaking Customer Direct Fire
No. Description FY 23-24 Imported Replenish Groundwater Delivery Max Day Max Hour Meters/Serv Customer Protection Water Production
1 Salaries and Benefits $840,400 $0 $0 $0 $494,353 $346,047 $0 $0 $0 $0 2 Utilities 1,292,500 2,440 - 1,290,060 - - - - - -
3 Replenishment Water Purchases 270,000 - 270,000 - - - - - - - 4 Imported San Bernardino Water Purchases 76,100 76,100 - - - - - - - - 5 Repairs and Maintenance 14,900 - - - 8,765 6,135 - - - - 6 Materials & Other Services 3,000 - - - 1,765 1,235 - - - - 7 All Other 1,727,300 - - - 1,016,059 711,241 - - - -
8 Total Water Production $4,224,200 $78,540 $270,000 $1,290,060 $1,520,941 $1,064,659 $0 $0 $0 $0 Water Transmission and Distribution
9 Salaries and Benefits $730,600 $0 $0 $0 $129,691 $90,784 $269,758 $153,426 $0 $86,941 10 Repairs and Maintenance 105,900 - - - 18,799 13,159 39,101 22,239 - 12,602 11 Capital Asset Aquisition 53,700 - - - 9,532 6,673 19,828 11,277 - 6,390 12 All Other 497,000 - - - 88,224 61,757 183,506 104,370 - 59,143 13 Total Water Transmission and Distribution $1,389,500 $0 $0 $0 $246,655 $172,658 $513,042 $291,795 $0 $165,351 Water Meters
14 Salaries and Benefits $158,600 $0 $0 $0 $0 $0 $0 $158,600 $0 $0 15 Repairs and Maintenance 78,600 - - - - - - 78,600 - - 16 Cap Cont -Transf Of Cap Assets 64,100 - - - - - - 64,100 - - 17 All Other 103,400 - - - - - - 103,400 - -
18 Total Water Meters $404,700 $0 $0 $0 $0 $0 $0 $404,700 $0 $0 19 Water Administration 1,530,700 0 0 0 525,095 367,566 152,408 206,906 229,605 49,120 20 Total Operation and Maintenance Expense $7,549,100 $78,540 $270,000 $1,290,060 $2,292,691 $1,604,883 $665,449 $903,401 $229,605 $214,471 Capital Costs
21 2016 Water Bonds Debt Service 371,756 - - - 156,999 107,718 99,138 5,245 - 2,657 22 Total Capital Costs $371,756 $0 $0 $0 $156,999 $107,718 $99,138 $5,245 $0 $2,657 Adjustments
23 Revenue Offsets ($1,363,115) $0 $0 $0 ($528,754) ($370,128) ($153,470) ($208,348) ($52,953) ($49,462) 24 Adjustments for Annual Cash Balance (58,810) - - - (22,812) (15,969) (6,621) (8,989) (2,285) (2,134) 25 Adjustments to Annualize Rate Increase (1) 1,231,317 - - - 477,629 334,341 138,631 188,203 47,833 44,680 26 Total Adjustments ($190,608) $0 $0 $0 ($73,937) ($51,756) ($21,460) ($29,134) ($7,405) ($6,916) 27 Total Cost of Service $7,730,248 $78,540 $270,000 $1,290,060 $2,375,752 $1,660,845 $743,127 $879,512 $222,200 $210,212 Tuckfield & Associates 36
Appendix A-2
Allocation of Costs to Public and Private Fire Protection Allocated Peaking Direct Fire
Description Total Cost Max Day Max Hour Protection
Unit Costs of Service $651.24 $36.01 $35.70
Units of Measure Ccf/day Ccf/day Eq. Hyd
Public Fire Protection
Units of Service 770 5,390 5,889
Allocated Cost of Service $905,837 $501,493 $194,132 $210,212 Private Fire Protection
Units of Service 71 494 0
Allocated Cost of Service $63,786 $45,985 $17,801 $0
City of Loma Linda
Regular City Council Staff Report
Prepared By: Lynette Arreola
Remove Mr. Heath Nicola from the Traffic Advisory Committee and replace with Mr. Art Walls and other Board and Committee Vacancies [City Manager]
Meeting
Tuesday, April 9, 2024, 7:00 PM
Agenda Group
New Business Item: 5A
To
City Council
From
T Jarb Thaipejr, City Manager
Approved/Continued/Denied by City Council
Date:

RECOMMENDATION:

It is recommended that the City Council remove Mr. Heath Nicola from the Traffic Advisory Committee due to nonattendance and appoint Mr. Art Walls to fill Mr. Nicola's seat.

It is also recommended that the City Council declare vacancies for the following Boards and Committees: one (1) vacancy in the Budget Committee; , four (4) vacancies for the Parks, Recreation and Beautification Committee; two (2) in the Traffic Advisory Committee; and two (2) in the Trails Development Committee and direct the Clerk to post the vacancy notice.

BACKGROUND:

Mr. Heath Nicola had not attended a Traffic Advisory Committee meeting in over a year. The Committee has recommended removing Mr. Nicola from the Committee.

Mr. Art Walls previously served as a member but resigned due to personal reasons. The Committee Chairman, T. Milford Harrison, proposed appointing Mr. Walls to fill Mr. Nicola's seat. Mr. Walls has shown interest in the membership and brings considerable knowledge and experience from his prior tenure as a member.

On July 1, 2024, there are Board and Committee members vacancies as follows:

Budget Committee:

Jay Gallant, Term Expires July 1, 2024
Parks Recreation and Beautification Committee:

Kurt Swigart, Resigned, Term Expires July 1, 2024
Valerie Gallant, Term Expires July 1, 2024
Janet Razzouk, Term Expires July 1, 2024
Robert Alfaro, Term Expires July 1, 2024
Traffic Advisory Committee:

T. Milford Harrison, Term Expires July 1, 2024
William Chapman, Term Expires July 1, 2024
Trails Development Committee:

James Earson, Term Expires July 1, 2024
Attachments
Vacancy Notice 2024.pdf
Jaime Dupper, Term Expires July 1, 2024
FINANCIAL IMPACT:

No financial impact.

VACANCY NOTICE

LOCAL APPOINTMENT LIST
PLEASE TAKE NOTICE that pursuant to Government Code Sections 54970 et seq., attached is a list of regular and ongoing boards, commissions, and committees which are appointed by the City Council of the City of Loma Linda, including a list of all appointive terms which have expired, the name of the incumbent appointee, the date of appointment, the date the term expires, and the necessary qualifications for the position. Also listed are the vacancies noticed and not filled due to insufficient applications.

APPLICATIONS to serve on the committees/commissions listed below may be obtained from the City Clerk or the City's Website: www.lomalinda-ca.gov and submitted to the City Clerk, City ofLoma Linda 25541 Baiion Road, Loma Linda, CA 92354 by May 30, 2024.

COMMITTEE APPOINTMENTS will be scheduled for the City Council meeting of June 11, 2024.

City of Loma Linda
Regular City Council Staff Report
Prepared By: Lynette Arreola
Council Direction Regarding Revenue Enhancement Taxation [City Manager] Meeting
Tuesday, April 9, 2024, 7:00 PM
Agenda Group
New Business Item: 5B
To
City Council
From
T Jarb Thaipejr, City Manager
Approved/Continued/Denied by City Council
Date:

RECOMMENDATION:

It is requested that the City Council provide direction regarding revenue enhancement via taxation.

BACKGROUND:

A Budget information workshop was held on March 13, 2024. A suggestion of increasing taxation for revenue enhancement was brought up. Taxation requires a general election vote to install. Staff will reach out to other agencies that have successfully passed new taxation as well as consultants that specialize in this type of campaign.

ANALYSIS:

Staff is looking for guidance regarding this item.
1) Does the Council wish to direct staff to prepare a “request for quote” to bring on a consulting firm to assist? 2) What parameters does the Council wish to set? Such as the type of tax, i.e. utility or sales.

ENVIRONMENTAL IMPACT:

N/A
FINANCIAL IMPACT:

Not at this time.

City of Loma Linda
Regular City Council Staff Report
Prepared By: Lynette Arreola
Council Direction Regarding Drive-through Food Service [City Manager] Meeting
Tuesday, April 9, 2024, 7:00 PM
Agenda Group
New Business Item: 5C
From
T Jarb Thaipejr, City Manager
Approved/Continued/Denied by City Council
Date:

RECOMMENDATION:

It is requested that City Council provide direction regarding drive-through food service.

BACKGROUND:

In 2013, City Council adopted an ordinance to regulate and prohibit fast-food restaurants with drive-through services in the city.

ANALYSIS:

Currently, there are eight drive-through restaurants in our city. Despite the prohibition, fast-food establishments with drivethrough services continue to express interest in locating within our city, including Dunkin' Donuts, Dutch Bros Coffee, Jack in the Box, and Chipotle. It is evident that Loma Linda meets their business profile needs and demographic preferences, suggesting a conducive environment for successful operations.

Although Loma Linda has a relatively small population of 25,000 residents, its daytime population grows to 70,000 commuters that frequent the University and other medical-related intuitions. Discussions during the recent budget workshop on March 13 highlighted the need for drive-through facilities to accommodate these commuters and to generate revenue for the city.

ENVIRONMENTAL IMPACT:

Not applicable.

FINANCIAL IMPACT:

This discussion and review has no impact upon current revenue or expenditure levels. It should be noted, however, that the eight (8) fast food restaurants with a drive-through generated approximately $10,000.00 per year in sales tax revenue. The 29 sit-in restaurants without drive-through service generate approximately $6,200.00 per year.

City of Loma Linda
Regular City Council Staff Report
Prepared By: Lynette Arreola
Council Direction to discuss permitting emotional support dogs for the Fire Department Meeting
Tuesday, April 9, 2024, 7:00 PM
Agenda Group
New Business Item: 5D
To
City Council
From
Dan Harker, Fire Chief
Approved/Continued/Denied by City Council
Date:

RECOMMENDATION:

Direction from City Council on direction to permit emotional dog support services for the Fire Department.