2025 Water and Wastewater
Rate & Capital Facility Fee Study
City Council Study Session
City of Merced
January 27, 2025
2 AGENDA
1. Rate Studies Overview & Scope
2. Water Utility
• Financial Plan
• Proposed Rates
3. Wastewater
• Financial Plan
• Rate Design & Structure
4. Capital Facility Fees
• Water
• Wastewater
5. Project Schedule
3 Legal Requirements
for Setting Water & Wastewater Rates In California
Proposition 218 (Article XIIID, Section 6 of California Constitution) • Revenues shall not exceed funds required to provide service; nor used for another purpose
• Amount shall not exceed the proportional cost of the service attributable to the parcel
• Service must be actually used or immediately available • Approval process includes 45-day notice, public hearing, and written majority protest. Does not require a voting process (unlike taxes).
The Rate Setting Process
Compares the revenues of each utility to its
expenses to determine the overall level of
annual rate adjustments to meet financial
objectives
Equitably allocates the revenue requirements
between the various customer classes of service
on a proportionate basis
Design rates for each class of service to meet
the revenue needs of the utility, along with any
other rate design goals and objectives
Revenue Requirements
Cost-of-Service
Rate Design
4 Cash Flow Schematic
5 Water Utility
6 Water
Water Rate Survey
Monthly bill for Single Family with 3/4” meters and 17 HCF of water usage (423 gallons per day) 7 Water
Water Enterprise Revenue
FY 2025/26 Beginning Fund Balance
8 Water
Fund 6001 $40,461,000
Total Operating Fund: $40,461,000
Fund 6007 $43,773,000
Fund 6008 $9,555,000
Total Capital Facility Funds: $53,328,000
Water Enterprise Revenue
FY2025/26 Budget
9 Water
Water Service Rate
Revenue
89.5%
Other Rate Revenue
2.7%
Miscellaneous Fees
0.7%
Interest Earnings
4.5% Operating Revenue
0.4%
Pentalties
2.2%
Water Service Rate Revenue $14,171,000
Other Rate Revenue $429,000
Non-Rate Revenue
Miscellaneous Fees $110,000
Interest Earnings $707,000
Operating Revenue $68,000
Pentalties $343,000
Total: $15,828,000
Water Operating Budget
Estimated for FY2025/26*
1 0
Water
* Based on 7% increase over FY 2024/25 actuals
Salaries $2,755,000
Benefits $1,819,000
Adminstration $2,938,000
Chemicals $322,000
Utilities $2,591,000
Professional Services $528,000
Operations $3,072,000
Insurance $516,000
Total Budget: $14,541,000
11 Financial Assumptions
Water
Annual Inflation: Personnel, Chemicals 4%
Health Insurance 4%
Utilities and OPEB 5%
General Insurance 10% for three years and then 5%
All other costs 3%
Interest Earnings: 2.0%
Growth Rate: 1.4%
Debt terms: Interest: 5%
Period: 25 years
Cost of issuance: 1%
Water Capital Spending
1 2
Water
Average Historical
Spending:
$272 thousand
Average Annual Spending:
$8.7 million
(includes $23M in encumbrances)
Assumed Average
Future Spending:
$6.1 million
13 Water Enterprise Reserves
Adopting reserve policies protect the City’s rate payers and have a beneficial impact on the enterprise’s bond rating (which contributes towards qualifying for affordable debt).
The following reserve targets are recommended for the utility enterprises:
Operating Reserve
• 50% of annual expenses
• Current target: $7.3 million
Capital Reserve Fund
• Equal to average annual capital spending
• Current target: $6.0 million
Combined Target: $13.3 million
Water
Water Financial Forecast
14 Water
FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Rate Revenue Increase: 8.0% 8.0% 8.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% Proposed Forecasted
$0
$10
$20
$30
$40
$50
RESERVES
($M)
Projected Fund Balance Minimum Reserves Target Reserves $0
$5
$10
$15
$20
$25
$30
$35
2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Total Revenue / Expenses
($M)
Expenses
Revenues
Non Rate Revenue
Operating Expenses
Debt Service
Existing Rate Revenue
Cash Capital
Additional Rate Revenue
Debt Service
Water System Background
Customers: 24,014 Accounts
• 20,881 “Residential”
• 1,584 Apartments (multifamily)
• 1,198 Non-Residential
• 440 Irrigation
Source: Groundwater Wells
Treatment: Wellhead Treatment
15 Existing Water Rate Design*
• Fixed Meter Charge Rate (78.4% of revenue)
• Based on meter size
• Includes a “water allocation”
• 20 hcf per month (~ 15,000 gallons) for most customers, increases with meter size • Usage Rates (above water allotment) (21.6% of revenue) Uniform for all customers
16 Water
* Water rates are based on a 2018 rate study and have not increased since 2022 The only proposed structural
change is to reduce the
water allocation from 20 hcf
to 15 hcf which is better
aligned with average water
usage.
Water Utility
Unit Rate Calculation
17 Water
System Function: Account Meter Commodity
Units of Service: 25,194 29,197 4,744,000
Accounts Equilvalent Meters HCF *
Revenue Requirement: $438,000 $10,985,000 $4,059,000
Unit Costs: $17.39 $376.24 $0.856
per account per
year
or
per equivalent meter
per year
or
per HCF
$1.45 $31.35
per account per equivalent meter
per month per month
* Assumes that water allocation will be lowered to 15 HCF per month Proposed Year 1 increase to Water Rates
18 Water
Proposed
Current* Year 1
Usage Rates (per HCF)
All Customers $0.77 $0.86 $0.09 11.2%
Fixed Monthly Service Charges (per month)
5/8" meter $32.25 $32.80 $0.55 1.7%
3/4" meter $32.25 $32.80 $0.55 1.7%
1" meter $32.25 $32.80 $0.55 1.7%
1.5" meter $64.02 $64.15 $0.13 0.2%
2" meter $102.12 $101.77 -$0.35 -0.3%
3" meter $203.77 $202.09 -$1.68 -0.8%
4" meter $318.12 $314.95 -$3.17 -1.0%
6" meter $635.73 $628.45 -$7.28 -1.1%
8" meter $1,016.87 $1,004.65 -$12.22 -1.2%
10" meter $1,525.06 $1,506.25 -$18.81 -1.2%
12" meter $2,144.42 $2,117.58 -$26.84 -1.3%
* Changes differ from 8% overall rate revenue increase due to changes in the rate structure.
Change*
Proposed Water Rate Schedule
19 Water
July 1, 2026 July 1, 2027 July 1, 2028 July 1, 2029 July 1, 2030 Rate Revenue Increases: 8.0% 8.0% 8.0% 7.0% 7.0%
Current
Usage Rates ($/hcf) 1
All Customers $0.77 $0.86 $0.93 $1.00 $1.07 $1.14
Fixed Monthly Service Charges
5/8" meter $32.25 $32.80 $35.42 $38.25 $40.93 $43.80
3/4" meter $32.25 $32.80 $35.42 $38.25 $40.93 $43.80
1" meter $32.25 $32.80 $35.42 $38.25 $40.93 $43.80
1.5" meter $64.02 $64.15 $69.28 $74.82 $80.06 $85.66
2" meter $102.12 $101.77 $109.91 $118.70 $127.01 $135.90 3" meter $203.77 $202.09 $218.26 $235.72 $252.22 $269.88 4" meter $318.12 $314.95 $340.15 $367.36 $393.08 $420.60 6" meter $635.73 $628.45 $678.73 $733.03 $784.34 $839.24 8" meter $1,016.87 $1,004.65 $1,085.02 $1,171.82 $1,253.85 $1,341.62 10" meter $1,525.06 $1,506.25 $1,626.75 $1,756.89 $1,879.87 $2,011.46 12" meter $2,144.42 $2,117.58 $2,286.99 $2,469.95 $2,642.85 $2,827.85 1 For water use in excess of the base allocation
Proposed
Monthly Water Bill Impacts in Year 1
20 Water
Monthly
Meter Water Use Current Proposed
Size (hcf) Bill Bill $ %
Single Family
Low Use 3/4" 7.0 $32.25 $32.80 $0.55 1.7%
Median Use 3/4" 12.0 $32.25 $32.80 $0.55 1.7%
Average Use 3/4" 17.0 $32.25 $34.52 $2.27 7.0%
Above Average Use 3/4" 22.0 $33.79 $38.82 $5.03 14.9%
High Use 1" 60.0 $63.05 $71.50 $8.45 13.4%
Multifamily
Small Complex, Average Use 3/4" 30.0 $39.95 $45.70 $5.75 14.4% Medium Complex, Average Use 1.5" 64.0 $82.50 $93.39 $10.89 13.2% Large Complex, Average Use 2" 236.0 $234.56 $263.45 $28.89 12.3% Commercial
Average Water Use 3/4" 15.0 $32.25 $32.80 $0.55 1.7%
High Water Use 3/4" 45.0 $51.50 $58.60 $7.10 13.8%
Average Water Use 2" 91.0 $122.91 $138.75 $15.84 12.9%
High Water Use 2" 273.0 $263.05 $295.27 $32.22 12.2%
Average Water Use 4" 296.0 $392.04 $440.51 $48.47 12.4% High Water Use 4" 888.0 $1,001.88 $1,078.63 $76.75 7.7% Landscape
Average Water Use 3/4" 12.0 $41.49 $43.12 $1.63 3.9%
Average Water Use 2" 164.0 $228.40 $242.81 $14.41 6.3%
Average Water Use 4" 650.0 $818.62 $873.95 $55.33 6.8%
* Results include the 8% increase in Year 1
Change
Water Rate Survey
Monthly bill for Single Family with 3/4” meters and 17 HCF of water usage (423 gallons per day) 21 Water
Water Shortage Surcharge Policy
22 Decreases in water sales may occur because of:
• Drought
• State mandates
• Changes in customer behavior
Water shortage events can have significant financial impact on the City’s water utility:
1) Water sales drop, resulting in less revenue
2) Pumping and treatment volumes drop, resulting in less costs 3) Water conservation efforts increase, resulting in more costs The net impact of the above results in financial deficits for the Water Utility.
Water Shortage Surcharges are designed to keep the Water Utility financial whole during major changes in water sales.
Use Reduction Goal --> Up to 10% Up to 20% Up to 30% Up to 40% Up to 50% Greater than 50% Assumed Water Use Reduction --> 0% 0% 20% 35% 45% 55%
Water Shortage Surcharge --> 0% 0% 5% 11% 16% 21%
Normal
Supply
Shortage
Level 1
Shortage
Level 2
Shortage
Level 3
Shortage
Level 4
Shortage
Level 5
Shortage
Level 6
Estimated Financial Impact from Water Shortage
Reduced Water Sales Revenue (na) $0 $0 -$1,382,000 -$2,419,000 -$3,110,000 -$3,801,000 Reduced Utility Costs (na) $0 $0 $408,000 $714,000 $918,000 $1,122,000 Reduced Chemical Costs (na) $0 $0 $67,000 $117,000 $151,000 $184,000 Increase in Conservation Program Costs (na) $0 $0 -$40,000 -$120,000 -$160,000 -$200,000 Estimated Financial Deficit: $0 $0 $0 -$947,000 -$1,708,000 -$2,201,000 -$2,695,000 Increase in Revenue from Surcharges (na) (na) $0 $705,000 $1,437,000 $1,980,000 $2,453,000 Strategic Use of Reserves $0 $0 $0 -$242,000 -$271,000 -$221,000 -$242,000 Proposed Drought Surcharge Policy
Based on existing shortage levels as defined by the City’s Water Shortage Contingency Plan 23 * Surcharge is a percentage increase that is applied to then-current water rates *
Financial Impact of Water Surcharge
24 Private Fire Service Lines
25 Purpose of Fee: Larger infrastructure is required to service private fire service lines to meet the potential water demands during a fire.
Hydraulic
Size of Demand Current Monthly Proposed Monthly Number of Connection Factor Charge Charge Change Accounts
2" 6.19 $1.45 $1.67 15.4% 0
3" 17.98 $4.20 $4.86 15.7% 2
4" 38.32 $8.96 $10.36 15.6% 44
5" (hydrants)* 68.91 $16.12 $18.63 15.5% 5
6" 111.31 $26.03 $30.09 15.6% 97
8" 237.21 $55.49 $64.11 15.5% 107
10" 426.58 $99.77 $115.30 15.6% 13
12" 689.04 $161.15 $186.24 15.6% 2
* Private properties with a public fire hydrant are subject to the Private Fire Charge.
Wastewater Utility
26 Wastewater
Wastewater Rate Survey
Monthly bill for Single Family
27 Wastewater
Wastewater Enterprise Revenue
FY 2025/26 Beginning Fund Balance
2 8
Water
Fund 6000 $65,104,000
Total Operating Fund: $65,104,000
Fund 6004 $12,513,000
Fund 6005 $19,736,000
Total Capital Facility Funds: $32,249,000
Wastewater Enterprise Revenue
FY2025/26 Budget
29 Wastewater
Sewer Rate Revenue $19,795,000
Non-Rate Revenue
Miscellaneous Fees $190,000
Interest Earnings $1,137,000
Operating Revenue $2,020,000
Repayment on Loan $1,562,000
Penalties $405,000
Total: $25,109,000
Wastewater Operating Budget
FY2025/26 Budget
30 Wastewater
Salaries $3,461,000
Benefits $2,250,000
Adminstration $3,663,000
Chemicals $1,076,000
Utilities $1,841,000
Professional Services $474,000
Operations $4,208,000
Insurance $1,236,000
Debt Service $2,326,000
Total Budget: $20,535,000
Wastewater Capital Spending
31 Wastewater
Average Historical
Spending:
$1.9 million
Average Planned
Spending (Fund 6000):
$22.9 million
Assumed Average
Future Spending (Fund 6000):
$6.6 million
$68 M WWTP Rehabilitation
$62 M WWTP Expansion
32 Wastewater Enterprise Reserves
Adopting reserve policies protect the City’s rate payers and have a beneficial impact on the enterprise’s bond rating (which contributes towards qualifying for affordable debt).
The following reserve targets are recommended for the utility enterprises:
Operating Reserve
• 50% of annual expenses
• Current target: $9.1 million
Capital Reserve Fund
• Equal to average annual capital spending
• Current target: $5.5 million
Combined Target: $14.6 million
Wastewater
Wastewater Finance Scenarios
33 Wastewater
Scenario 1: Receive $30M grant, cash finance the balance ($37M) Scenario 2: Issue $50M SRF loan, cash finance the balance ($17M) How to finance the $67M WWTP Rehabilitation Project?
Wastewater Financial Forecast
Scenario 1: Receive $30M grant, cash finance the balance of the WWTP project 34 Wastewater
Debt-funded portion of WWTP Expansion Project
(funded with Capital Facility Charges)
FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Rate Revenue Increase: 5.0% 5.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% Debt Coverage Ratio: 4.22 4.39 4.57 4.46 4.73 4.99 22.34 2.43 2.72 Funds 6004/5 Debt Proceeds: $49.7M
Proposed Forecasted
$0
$10
$20
$30
$40
$50
$60
$70
RESERVES
($M)
Projected Fund Balance
Minimum Reserves
Target Reserves
$0
$10
$20
$30
$40
$50
$60
$70
$80
FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Total Revenue / Expenses ($M)
Expenses
Revenues
Non Rate Revenue
Operating Expenses
Debt Service
Existing Rate Revenue
Cash Capital
Additional Rate Revenue
Debt Service
Wastewater Financial Forecast
Scenario 2: Issue $50M SRF loan, cash finance the balance of the WWTP project 35 Wastewater
Note the projected later
year rate adjustmentsFY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Rate Revenue Increase: 5.0% 5.0% 4.0% 4.0% 4.0% 3.0% 3.0% 8.0% 8.0% Debt Coverage Ratio: 4.22 4.39 4.57 1.69 1.78 1.82 2.55 1.46 1.76 Funds 6004/5 Debt Proceeds: $49.7M
Fund 6000 Debt Proceeds: $50.0M
Proposed Forecasted
$0
$10
$20
$30
$40
$50
$60
$70
RESERVES
($M)
Projected Fund Balance
Minimum Reserves
Target Reserves
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
FY2026 FY2027 FY2028 FY2029 FY2030 FY2031 FY2032 FY2033 FY2034 FY2035 Total Revenue / Expenses ($M)
Expenses
Revenues
Non Rate Revenue
Operating Expenses
Debt Service
Existing Rate Revenue
Cash Capital
Additional Rate Revenue
Debt Service
Existing Wastewater Rate Design
36 Wastewater
~ 80% of rate revenue
~ 20% revenue
• Residential Rates
Fixed based on number of dwelling units
• Non-Residential Rates
Fixed Monthly Account Charge
Usage Charge based on metered water usage
• Various usage rates depending on business category
which accounts for sewage strength.
• Wastewater rates are based on a 2010 rate study and haven’t increased since 2021 Proposed Changes to Wastewater Rate Structure
37 Wastewater
• A fixed account charge (1.5% of all rate revenue) will be assessed to all customers
• Included in the “per dwelling” charge for residential customers • The account charge will be in addition to the usage charge for non-residential customers (currently treated as a minimum charge)
• Charge special industrial customers using the same unit rates as other non- residential customers
• These customers are currently charged using a date rate structure that considers monthly peaking behavior
• This will result in more volatility in monthly billing for customers that only operate seasonally.
Proposed Year 1
increase to
Wastewater Rates
38 Proposed
Current July 1, 2026 Change2
Residential Fixed Dwelling Rates (monthly)
Single Family $43.93 $47.01 per dwelling unit 7.0%
Multi-Family $35.14 $36.89 per dwelling unit 5.0%
Mobile Home $22.48 $23.73 per dwelling unit 5.6%
Non-Residential Rates
Fixed Monthly Charge 1
$1.60 $1.10 per account (new)
Wastewater Usage Rate (per HCF)
Bakery $8.57 $7.86 per HCF -8%
Barber / Beauty Shop $3.73 $4.14 per HCF 11%
Bars without dining $4.27 $4.10 per HCF -4%
Car Wash $3.47 $3.49 per HCF 1%
Church (varies) $3.66 per HCF na
Construction $3.91 $3.92 per HCF 0%
Government Building $3.58 $3.95 per HCF 10%
Department / Store $3.91 $3.82 per HCF -2%
Dry Industrial $6.32 $5.37 per HCF -15%
Hospital & convalescent $4.07 $3.93 per HCF -3%
Hotel with dining $5.30 $6.32 per HCF 19%
Hotel without dining $4.35 $4.17 per HCF -4%
Laundromat $3.76 $3.66 per HCF -3%
Laundry / Dry Cleaner $5.30 $4.08 per HCF -23%
Light Manufacturing $4.35 $4.74 per HCF 9%
Market $8.65 $7.89 per HCF -9%
Mortuary $8.65 $7.90 per HCF -9%
Professional Office $3.58 $3.66 per HCF 2%
Recreation Hall $3.58 $3.94 per HCF 10%
Repair / Service Station $4.51 $4.31 per HCF -5%
Restaurant / Restaurant $8.57 $7.84 per HCF -9%
Mixed Commercial $4.35 $4.74 per HCF 9%
Theater $3.73 $4.13 per HCF 11%
Warehouse / Warehouse $3.58 $4.11 per HCF 15%
School $3.28 $3.66 per HCF 12%
Special $6.73 $5.50 per HCF -18%
1 Treated as a minimum charge for existing rates
2 Variations in the changes to rates is a result of structural changes (only applicable in Year 1).
Proposed
Wastewater
Rate Schedule
39 July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
July 1,
2030
5.0% 5.0% 4.0% 4.0% 4.0%
Residential Fixed Dwelling Rates (monthly)
Single Family $47.01 $49.36 $51.33 $53.38 $55.52
Multi-Family $36.89 $38.73 $40.28 $41.89 $43.57
Mobile Home $23.73 $24.92 $25.92 $26.96 $28.04
Non-Residential Rates
Fixed Monthly Charge (per acc $1.10 $1.16 $1.21 $1.26 $1.31 Wastewater Usage Rate (per HCF)
Bakery $7.86 $8.25 $8.58 $8.92 $9.28
Barber / Beauty Shop $4.14 $4.34 $4.51 $4.69 $4.88
Bars without dining $4.10 $4.30 $4.47 $4.65 $4.84
Car Wash $3.49 $3.66 $3.81 $3.96 $4.12
Church $3.66 $3.85 $4.00 $4.16 $4.33
Construction $3.92 $4.11 $4.27 $4.44 $4.62
Government Building $3.95 $4.14 $4.31 $4.48 $4.66
Department / Store $3.82 $4.01 $4.17 $4.34 $4.51
Dry Industrial $5.37 $5.63 $5.86 $6.09 $6.33
Hospital & convalescent $3.93 $4.12 $4.28 $4.45 $4.63
Hotel with dining $6.32 $6.64 $6.91 $7.19 $7.48
Hotel without dining $4.17 $4.38 $4.56 $4.74 $4.93
Laundromat $3.66 $3.84 $3.99 $4.15 $4.32
Laundry / Dry Cleaner $4.08 $4.29 $4.46 $4.64 $4.83
Light Manufacturing $4.74 $4.97 $5.17 $5.38 $5.60
Market $7.89 $8.28 $8.61 $8.95 $9.31
Mortuary $7.90 $8.30 $8.63 $8.98 $9.34
Professional Office $3.66 $3.85 $4.00 $4.16 $4.33
Recreation Hall $3.94 $4.14 $4.31 $4.48 $4.66
Repair / Service Station $4.31 $4.52 $4.70 $4.89 $5.09
Restaurant / Restaurant $7.84 $8.23 $8.56 $8.90 $9.26
Mixed Commercial $4.74 $4.97 $5.17 $5.38 $5.60
Theater $4.13 $4.33 $4.50 $4.68 $4.87
Warehouse / Warehouse $4.11 $4.31 $4.48 $4.66 $4.85
School $3.66 $3.85 $4.00 $4.16 $4.33
Special $5.50 $5.77 $6.00 $6.24 $6.49
1 Currently treated as a minimum charge. Proposed to be a fixed monthly charge per account going forward Effective Date
Proposed Special Industrial Wastewater Rates
to be charged based on actual measured flows and loadings 40 HCF = hundred cubic feet (748 gallons)
BOD = biochemical oxygen demand
SS = suspended solids
Metric
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
July 1,
2030
Flow ($ per HCF) $2.84 $2.98 $3.10 $3.22 $3.35
BOD ($/ 1,000 lbs) $391.20 $410.76 $427.19 $444.28 $462.05 SS ($/ 1,000 lbs) $423.60 $444.78 $462.57 $481.07 $500.31 Account Charge (per month) $1.10 $1.16 $1.21 $1.26 $1.31 Wastewater Rate Survey
Monthly bill for Single Family
41 Wastewater
Capital Facility Fees
a.k.a. connection fees or capacity charges
42 Capital Facility Fee Calculation Methodologies
Past Investments in
Capacity
Future Investments
in Capacity
Buy-In Approach Incremental Cost Approach
Value of Plant in Service
Existing Capacity
= Fee Cost of Proposed Growth Projects
Planned New Capacity
= Fee
43 Water Capital Facility Fees (last fee study in 2018) Basis of Incremental Approach calculation
44 Future Cost of Expansion: $131 million
Associated New Capacity: 14.4 MGD
Average Demand of New Development: 608 gallons per day* per equivalent residential unit (ERU) Peak Daily Demand per ERU: 1,155 gallons per day
* Based on average per capita demand of 190 gallons per day and 3.2 residents per EDU Water Capital Facility Fee
Proposed
Private Fire Capital Facility Fee - Accounts with fire flow requirements that are higher than the basic requirement (1,500 gpm for 2 hours) will be charged proportionately higher in increments of 1” meter charges.
45 Rated Flow Hydraulic
Capacity (gpm)1 Capacity Factor Current Proposed Change 1" meter 50 1.0 $10,305 $10,500 1.9%
1 1/2" meter 100 2.0 $20,609 $21,000 1.9%
2" meter 160 3.2 $32,974 $33,700 2.2%
3" meter 320 6.4 $65,949 $67,300 2.0%
4" meter 500 10.0 $103,045 $105,200 2.1%
6" meter 1000 20.0 $206,091 $210,400 2.1%
8" meter 1600 32.0 $329,745 $336,600 2.1%
10" meter 2400 48.0 $494,618 $505,000 2.1%
12" meter 3375 67.5 $695,557 $710,100 2.1%
1 AWWA M1 Manual, 7th Edition, Table B-2
Facility Charges
Meter Size
Water Capital Facility Fees
Survey - Single Family Homes
46 Wastewater Capital Facility Fee (last fee study in 2010) Basis of Incremental Approach calculation
47 The Wastewater Capital Facility Fee is bifurcated into two components:
Line component = collection system
Plant component = wastewater treatment plant
Lines Plant
Cost of Growth Projects ($) $33,552,000 $52,700,000
Divided by: Additional Capacity (EDUs) 34,628 5,346
Equals: Unit Valuation of Additional Capacity $968.93 $9,858.44 Wastewater Capital Facility Fees
Proposed
48 Plant Line Current
Customer Class Component Component* Capital
Facility Fee
Single Family per house $9,859 $969 $10,828 per house $7,433 $3,395 45.7% Multi-Family per DU $7,895 $775 $8,671 per dwelling unit $6,188 $2,483 40.1% Mobile Home per unit $5,122 $504 $5,626 per unit na na
Light commercial or institutional per 1,000 sq. ft. $5,370 $640 $6,009 per 1,000. sq. ft. $4,369 $1,640 37.5% Light industrial per 1,000 sq. ft. $3,728 $446 $4,174 per 1,000. sq. ft. $3,853 $321 8.3% Heavy strength and/or flow
Total
Capital
Facility Fee
(case by case basis depending on estimated flow and loadings) * Properties that are located south of Bear Creek are assessed an additional surcharge of 14.6 percent to the Line Component based on the costs associated with a 1987 Special Assessment District for a force main that was built and paid for by the City.
This additional charge applies to undeveloped properties that opted out of contributing to the project in 1987.
Change
Wastewater Capital Facility Fees
Survey – Single Family Homes
49 50
Implementation of AB 2257
Proposal to adopt new rate setting procedures per authority of AB 2257 • Creates a formal process for exhausting administrative remedies for would-be rate litigants (AB2257)
• Establishes a formal written objection procedures for ratepayers to raise substantive concerns about potential increases
• Objections must be received by the City prior to the deadline established as part of the rate setting process (no less than 45 days after the public hearing notice is mailed)
• The City will respond to the written objections and provide response to Council at the Public Hearing
Project Schedule
51 Study Session January 27
Final Council Recommendation February 17
Sent 218 Notification Late Feb
Objections Deadline Mid April
Public Hearing Early May
Implement Rates July 1, 2026
EXTRA SLIDES
52