ATTACHMENT 2
City of Napa Water Rates
“You don’t know the value of
water until the well runs dry”
- Ben Franklin
September 19, 2023
“Whiskey is for drinking...
Water is for fighting”
-Mark Twain
• Water Supplies
❖ Lake Hennessey
❖ Milliken Reservoir
❖ State Water Project
• Water Treatment - 3 Plants (43 MGD)
• Water Transmission
❖14 Storage Tanks (31 million gal)
❖10 Pump Stations
❖11 Regulator Stations
• Water Distribution
❖ 360 miles of Pipelines
❖ 25,500 Water Services (City & Unincorporated
County)
$941 Million SystemCity of Napa Water System
❑ Annual Budget $38 Million
❑ $6M annual Capital Improvements
❑ 24/7 Operation
❑ 68 full-time staff
❑ Real-time monitoring at treatment plants
❑ Hundreds of samples every week
❑ Certified, licensed professionals
operating at all times
Turbidimeters
City of Napa Water System
Water Rates Cost of Service
❑ Revenue Collected
❖ No taxes
❖ >90% of revenue is bimonthly water bills
❖ Cell tower leases, capacity fees/new connections
❑ Costs to Operate and Invest in System
❖ O&M
❖ Capital Improvements
❖ Non-recurring (Sanitary Survey of Watersheds,
Urban Water Mgmt Plan)
❑ Detailed review 6 years ago in 2017
... costs to provide
service
Current Status of Water Enterprise
❑ Rates not adjusted since October 2021
❑ Budget deficit of $6.8 M if we maintain $6M annual
CIP commitment
❑ Proposed Rates are necessary
❖ Operate the system
❖ Purchase water supply
❖ Invest in infrastructure
… Reliable System …
Demand Projections
Operating Expenses
❑ Inflationary Increases
❖ 24/7 operation
❖ 68 staff ensure Regulatory Compliance
▪ Water Supply - State Water Project (+$2M)
▪ Treatment – Chemicals (+$700k since 2020)
▪ Distribution –Repair Clamps, Fittings, Pipe
(+$250k)
▪ Risk/Liability – (+$700k)
No Rate Increase
Proposed Rate Increase
❑Meets needs for operations, maintenance and water supply costs
❑Increases annual contribution to CIP from $6M to $8M by 2028
❑Prepares for 30-Yr Master Plan and Financial Plan
❑Supports $100M Bond issuance in 2027 ($7.2M annual debt service)
Identified CIP Needs
❑ Water Quality - focus on Hennessey Treatment Plant Upgrades in 2028- 2030 ($80M)
❑ Water Supply – Hennessey spillway expansion ($10M)
❑ Water Transmission – 12-in on BV Road, 36-in AC main 17 miles ($4M/mile)
Current and Proposed Rates
Current and Proposed Rates
Residential 1-in meter
Indoor Consumption: 8 units (4 units per month)
$42.57
$47.88
$53.62
$58.45
$68.81
$63.71
Typical Winter Monthly Bill
Adjustment is approximately $5 per month
52% of all bills will be at this level or lower
Residential 1-in meter
In/Outdoor Consumption: 16 units (8 units per month)
$62.86
$72.32
$81.00
$88.29
$103.93
$96.23
Adjustment is approximately $8-10 per month
77% of all bills will be at this level or lower
Typical Summer Monthly Bill
Typical Family of Four
Assistance Programs
❑ *RateShare Program – $25 per bill discount for low-income single family residential customers who are enrolled in PG&E CARE program.
❑ Low Income Household Water Assistance Program (LIHWAP)- Administered through Dept of Health & Human Services, bills are paid directly to City of Napa as eligible utility. Extended thru March 31, 2024.
* RateShare Program is funded by non-rate revenue received from cell tower leases.
* Total cost is higher; a portion of capital costs are paid through property taxes.
Comparison to Bay Area
Clean, safe, reliable tap water:
• 1 penny per gallon
• Delivered!
Value of Water
❑ Clean safe, reliable, low-cost water for our customers ❑ Manage the system and invest in infrastructure to:
❖ ensure system reliability
❖ reduce long-term O&M costs
Water Enterprise Goals
❑ Sept 22 – Prop 218 Notice of Public Hearing mailed
❑ Nov 6 – 45-day period for Prop 218 Noticing ends
❑ Nov 7 – Public Hearing to consider adoption of
proposed rates
2024
❑ Jan 1– Adopted rates take effect
❑ Mar 1- First bills under new rates delivered to
customers
Next Steps
2023
Authorize staff to provide written notice by mail of
the proposed update to water rates in compliance
with all requirements of state law, and schedule a
Public Hearing to consider adoption of updated water
rates on November 7, 2023, at 6:30 pm.
Requested Action
Questions
or
Comments