REVISED - AGENDA
City Council
Wednesday, April 2, 2025
City Council Chamber – Norco City Hall
2820 Clark Avenue, Norco, CA 92860
CALL TO ORDER 6:00 PM
ROLL CALL Greg Newton, Mayor
Robin Grundmeyer, Mayor Pro Tem
Kevin Bash, Council Member
Gregory Bowen, Council Member
Fia Sullivan, Council Member
CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: 1 Potential Case - Letter from Attorney Gosney re Frontier project.
CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION
Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9: 1 Potential Case
**NEW CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Property: 4043 Sierra Avenue, Norco
Agency negotiator: City Manager, City Attorney, Community Development Director
Negotiating parties: City of Norco and Zhenyan Wang
Under negotiation: Price and Terms of Payment
RECONVENE PUBLIC SESSION 7:00 PM
REPORT OF ACTION(S) TAKEN IN CLOSED SESSION
PLEDGE OF ALLEGIANCE Council Member Bash
INVOCATION Chaplain Bruce Smith
Cowboys for Christ
PRESENTATIONS Girl Scout Gold Award - Elsie
Ehrenberg
WORKSHOP
**NEW AB1061: Housing Opportunities is Historic Districts - Oral Report City Council Agenda - April 2, 2025
1. CITY COUNCIL REPORTS ON REGIONAL BOARDS
2. PUBLIC COMMENTS
This is the time when persons wishing to address the presiding governmental body regarding the Consent Calendar, Legislative Matters or items within the subject matter jurisdiction of the legislative body. Please submit a speaker card to the Meeting Clerk. Please limit comments to three minutes or less. The Ralph M. Brown Act limits the governmental body’s ability to respond to comments on non-agendized matters at the time such comments are made. The governmental body shall not discuss or act relative to any general public comment.
3. CONSENT CALENDAR
All items listed under the Consent Calendar are considered to be routine and may be enacted by one motion. Prior to the motion to consider any action by the presiding governmental body, any public comments on any of the Consent Items will be heard. There will be no separate action unless members of the governmental body request specific items be removed from the Consent Calendar. Items removed from the Consent Calendar will be separately considered under Item 4 of the Agenda.
3.A. Waive Reading of all Ordinance Adoptions on this Agenda and Read by Title Only
RECOMMENDATION:
Waive reading, by title only, of all Ordinances and Resolutions. Said Ordinances and Resolutions which appear on the agenda shall be determined to have been read by title and further reading waived.
Staff Report - Pdf
3.B. Approval of City Council Special Meeting Minutes and Regular Meeting Minutes
RECOMMENDATION:
Approve the City Council Special Meeting Minutes of March 18, 2025, and March 19, 2025, and Regular Meeting Minutes of March 19, 2025.
Staff Report - Pdf
3.C. Approval of an Agreement with Civic Solutions, Inc. to Provide Professional Planning Services
RECOMMENDATION:
Approve an agreement with Civic Solutions, Inc. for professional planning services to support the Planning Division of the Community Development Department, not to exceed $60,000.
Staff Report - Pdf
City Council Agenda - April 2, 2025
4. ITEM(S) PULLED FROM CONSENT CALENDAR
5. DISCUSSION / ACTION ITEM(S)
Order of Presentation for Discussion Items:
1. Staff Report Presentation
2. Council Questions of Staff
3. Public Comment
4. Council Discussion and Action
5.A. Water, Sewer, and Recycled Water Rate Study Discussion and Recommendations
RECOMMENDATION:
Receive the 2025 Water, Sewer, and Recycled Water Rate Study and recommendations and provide direction to implement the Proposition 218 noticing process for holding a public hearing on June 4, 2025 on changes to the Water, Sewer and Recycled Water rates.
Staff Report - Pdf
6. CITY COUNCIL / STAFF COMMUNICATIONS
7. ADJOURNMENT
In compliance with the Americans with Disabilities Act, any person who requires a modification or accommodation in order to participate in this meeting is encouraged to contact the City Clerk’s Office at (951) 270-5623 or [email protected] at least 48 hours prior to the meeting so that reasonable arrangements can be made to ensure accessibility. Staff reports are on file in the City Clerk’s Office.
Any writings or documents provided to a majority of the presiding governmental body regarding any item on this agenda will be available for public inspection at the City Clerk’s Office during normal business hours at Norco City Hall, located at 2870 Clark Avenue in Norco. The meeting is recorded.
City Council
STAFF REPORT
Date: April 2, 2025 Agenda Item:
3.A.
To: Honorable Mayor and City Council Members
From: Dana Roa, City Clerk
Prepared By: Sophia Thompson, Deputy City Clerk
Department: City Clerk
SUBJECT:
Waive Reading of all Ordinance Adoptions on this Agenda and Read by Title Only RECOMMENDATION:
Waive reading, by title only, of all Ordinances and Resolutions. Said Ordinances and Resolutions which appear on the agenda shall be determined to have been read by title and further reading waived.
REVIEWED AND APPROVED BY:
City Council
STAFF REPORT
Date: April 2, 2025 Agenda Item:
3.B.
To: Honorable Mayor and City Council Members
From: Dana Roa, City Clerk
Prepared By: Sophia Thompson, Deputy City Clerk
Department: City Clerk
SUBJECT:
Approval of City Council Special Meeting Minutes and Regular Meeting Minutes RECOMMENDATION:
Approve the City Council Special Meeting Minutes of March 18, 2025, and March 19, 2025, and Regular Meeting Minutes of March 19, 2025.
REVIEWED AND APPROVED BY:
Approved by: Lisette Free, City Manager
ATTACHMENT(S):
City Council - March 18 2025 - Special Meeting - DRAFT Minutes City Council - Mar 19 2025 - Special Meeting - DRAFT Minutes City Council - Mar 19 2025 - DRAFT Minutes
DRAFT - MINUTES
City Council
Tuesday, March 18, 2025
City Hall Conf. Room A and B – Norco
City Hall
2820 Clark Avenue, Norco, CA 92860
CALL TO ORDER 4:00 PM
ROLL CALL Greg Newton, Mayor
Robin Grundmeyer, Mayor Pro Tem
Kevin Bash, Council Member
Gregory Bowen, Council Member
Fia Sullivan, Council Member
PLEDGE OF ALLEGIANCE Mayor Greg Newton
1. PUBLIC COMMENTS
There were no public comments at this time.
2. WORKSHOP
Fiscal Year 2025-2026 Budget Priorities
Communications Manager Anderson introduced the purpose of the workshop and provided information on each Strategic Direction, facilitating the discussion between Staff and City Council Members.
Council Members asked questions of Staff regarding future department needs and discussed current budget information.
Following each Strategic Direction discussion, Council Members provided direction to Staff of the priorities moving forward with the budget. The following is a summary of the priorities discussed. The items to be funded are in Attachment A.
Strategic Direction No. 1 – Public Safety, Health & Wellness Consensus that all FY 2025-26 items are high priority items. Consensus to pursue grant funding for the Heli-Hydrant. Consensus to fund Homeless Services with General Fund Reserves. Some conversation on City promoting Norco College’s CERT Class, but no consensus to create our own program.
No consensus on increasing police or fire services.
City Council Minutes - March 18, 2025
o Some interest on adding an additional motor deputy.
o Mayor Pro Tem Grundmeyer requested that staff send RSO’s traffic data report to all Council Members.
o Council Member Bash requested information on setting aside development impact fees to fund a future ladder truck for Fire.
Strategic Direction No. 2 – Human Capital
Some consensus on wanting to see the overall budget picture before funding newly approved positions.
Consensus to budget salaries with a two-step increase. Consensus to reallocate current training and development allocations amongst divisions instead of additional funding.
Strategic Direction No. 3 – Economic Development & Financial Stability Consensus to keep Community Benefit in Reserves.
Consensus to run five-year report on Utility Billing Assistance Program and possibly decrease subsidy amount based on real expenditures. Consensus to work together to determine what type of economic development support Norco needs.
Consensus to pursue promotional efforts/opportunities to put Norco “on the map” for agriculture
o Discussed how events and programming should emphasize animalkeeping and agriculture to attract people to Norco.
Strategic Direction No. 4 – Communication & Stakeholder Experience Consensus that new Fire Safety positions need to be stationed at City Hall to better communicate with staff and the public.
Consensus to contract out agriculture classes through Community Services programming since EAT has waiting lists for each of their classes. Consensus to budget the actual, total cost of all events so that the City Council can review the true costs of the event. For all events, sponsorship donations should be expended first, followed by General Fund allocations. Consensus to change the sponsorship/partnership program. Consensus to purchase archiving equipment now, but work with the Historic Preservation & Agricultural Heritage Commission to improve processes before adding an additional employee.
Mayor Newton called for a recess before continuing to Strategic Direction No. 5.
Mayor Newton reconvened the meeting at 7:12 PM.
City Council Minutes - March 18, 2025
Strategic Direction No. 5 – Infrastructure & Asset Management Consensus to complete carryover projects versus starting new projects. Consensus to extend the Ingalls Event Center Master Plan project to a future year and look at other options for needs, tied in with Economic Development efforts.
Consensus to pay for one-time City Clerk projects with General Fund Reserves.
Consensus to pay for one-time IT projects with Measure R. Consensus to pay for recurring City Clerk and IT projects with General Fund.
Consensus to pursue opportunities for additional parking at the Ingalls Event Center.
Attachment A
City Council - March 18 2025 - Special Meeting - Minutes - Attachment A
3. ADJOURNMENT
Mayor Newton adjourned the meeting at 8:48 PM.
_________________________________
Dana Roa, CMC
City Clerk
Department Item Amount Type Funding Source
Contract Management Annual Costs $ 25,000 Recurring General Fund Contract Management System Acquisition $ 50,000 One-Time General Fund Reserves Document Management Annual Costs $ 50,000 Recurring General Fund Document Management Assessment & Acquisition $ 250,000 One-Time General Fund Reserves Heritage Room Archiving Equipment $ 5,500 Recurring General Fund Insurance Premium Increase $ 300,000 Recurring General Fund Personnel Negotiations (Cost of Living Adjustment) $ - Recurring General Fund/Various Recently Approved Positions (5) $ 300,000 Recurring General Fund Salaries Budgeted with a Two-Step Increase $ - Recurring General Fund Utility Bill Assistance Program $ 250,000 Recurring General Fund Communications Event Costs & Sponsorships $ - Recurring General Fund Event Costs & Sponsorships $ - Recurring General Fund
Homeless Services $ 655,000 Recurring General Fund Reserves Homeless Services $ 200,000 One-Time Housing Fund
Event Costs & Sponsorships $ - Recurring General Fund
Weapons Policy at Large Events $ 10,000 Recurring General Fund Contract Increase $ 900,000 Recurring General Fund
Convert PT Fire Inspector & Upgrade to FT Specialist $ 110,000 Recurring General Fund Convert PT Fire Specialist to PT Deputy Fire Marshal $ 10,000 Recurring General Fund Emergency Management Department Support $ 50,000 Recurring General Fund Heli-Hydrant $ 196,000 One-Time Measure R
Wildland Protection Agreement $ 67,000 Recurring General Fund ERP/Financial System Assessment $ 60,000 One-Time Measure R IT Server Room Design & Project Management $ 200,000 One-Time Measure R Property Information System Renewal Increase $ 60,000 Recurring General Fund Security Upgrade at Satellite City Facilities $ 300,000 One-Time Measure R Telephone System Upgrade $ 80,000 One-Time Measure R
Sheriff Contract Increase (9.5% Increase) $ 400,000 Recurring General Fund Total Fiscal Impact $ 4,528,500
General Fund Impact $ 2,537,500
General Fund Reserves Impact $ 955,000
Measure R Impact $ 836,000
Housing Fund $ 200,000
Total Fiscal Impact $ 4,528,500
City Clerk
City Manager
Community Services
Facilities & Maintenance
Fire
Information Technology
DRAFT - MINUTES
City Council
Wednesday, March 19, 2025
City Council Chamber – Norco City Hall
2820 Clark Avenue, Norco, CA 92860
CALL TO ORDER
Mayor Newton opened the Special Meeting to run concurrently with the Regular Meeting.
ROLL CALL Greg Newton, Mayor
Robin Grundmeyer, Mayor Pro Tem
Kevin Bash, Council Member
Gregory Bowen, Council Member
Fia Sullivan, Council Member
CLOSED SESSION
Mayor Newton adjourned to the Regular and Special Meeting Closed Session at 6:03 PM.
City Attorney Burns read the Closed Session items into the record.
CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
(Paragraph (1) of subdivision (d) of Section 54956.9)
Name of case: In re Pam Ciesla
RECONVENE PUBLIC SESSION 7:00 PM
REPORT OF ACTION(S) TAKEN IN CLOSED SESSION
City Attorney Burns stated there were no reportable actions for the Regular and Special Meeting Closed Session items.
1. ADJOURNMENT
Mayor Newton adjourned the meeting at 8:05 PM.
_________________________________
Dana Roa, CMC
City Clerk
DRAFT - MINUTES
City Council
Wednesday, March 19, 2025
City Council Chamber – Norco City Hall
2820 Clark Avenue, Norco, CA 92860
CALL TO ORDER
Mayor Newton opened the Special Meeting to run concurrently with the Regular Meeting.
ROLL CALL Greg Newton, Mayor
Robin Grundmeyer, Mayor Pro Tem
Kevin Bash, Council Member
Gregory Bowen, Council Member
Fia Sullivan, Council Member
CLOSED SESSION
Mayor Newton adjourned to the Regular and Special Meeting Closed Session at 6:03 PM.
City Attorney Burns read the Closed Session items into the record.
PUBLIC EMPLOYEE DISCIPLINE/DISMISSAL/RELEASE
RECONVENE PUBLIC SESSION 7:00 PM
REPORT OF ACTION(S) TAKEN IN CLOSED SESSION
City Attorney Burns stated there were no reportable actions for the Regular and Special Meeting Closed Session items.
PLEDGE OF ALLEGIANCE Mayor Pro Tem Grundmeyer
INVOCATION Pastor Daniel Kitheka
Beacon Hill Assembly of God
PRESENTATIONS Women's History Month Proclamation
Waste Management:
Chicken Program Update
Student Scholarships
1. CITY COUNCIL REPORTS ON REGIONAL BOARDS
City Council Minutes - March 19, 2025
The Mayor, Mayor Pro Tem and Council Members provided reports on their recent individual participation in committees, commissions, regional boards, and community organizations.
2. PUBLIC COMMENTS
Rocky Lowstetter stated he provided a handout of the erosion in front of his house and spoke regarding his home and the pavers he has installed. He asked that City Council consider allowing the pavers to remain at the front of his property.
Matt Jefferson spoke regarding item 3.H. and his concerns with Webb Municipal Finance, LLC, and the cost burden the LMD district residents have.
3. CONSENT CALENDAR
a) Approval of Consent Calendar as Presented.
Council Member Bash requested that item 3.C. be pulled for discussion.
Mayor Newton requested that item 3.H. be pulled for discussion.
M/S BASH/BOWEN Approve of Consent Calendar as Presented with items 3.C. and 3.H. pulled for discussion. The Motion was carried by the following roll call vote:
AYES: NEWTON, GRUNDMEYER, BASH, BOWEN, AND SULLIVAN
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
3.A. Waive Reading of all Ordinance Adoptions on this Agenda and Read by Title Only
Action: Waived reading, by title only, of all Ordinances and Resolutions. Said Ordinances and Resolutions which appear on the agenda shall be determined to have been read by title and further reading waived.
3.B. Approval of City Council Regular Meeting Minutes
Action: Approved the City Council Regular Meeting Minutes of March 05, 2025.
City Council Minutes - March 19, 2025
3.D. Amendment to Increase the Contract Amount for NCS Engineers for the Perand Polyfluoroalkyl Substances (PFAS) and Fluoride Treatment Design Project Action: Approved an amendment to the contract for NCS Engineers (NCS) in the amount of $107,131 for additional design services related to the Per- and Polyfluoroalkyl Substances (PFAS) and Fluoride treatment system at the existing Bluff Groundwater Treatment Plant.
3.E. Acceptance of Bids and Award of Contract for the Woodward Ave Street Improvements
Action: Accepted bids and awarded a contract to Mendoza Engineering Company, Inc. for Woodward Avenue Street Improvements Project, in the amount of $255,330 and authorized the City Manager to approve contract change orders up to 10 percent of the total bid amount.
3.F. Agreement with the National Parks and Recreation Association for funds program for Fiscal Year 2024-25.
Action: Approved the contract for a $2,500 micro-grant awarded to the Community Services Department for the "How to Coach Kids" training program. This program is designed to equip staff and volunteer coaches in the Sports Division with the necessary skills and knowledge to support positive youth development.
3.G. Streets, Trails, and Utilities Commission Review of Possible Exceptions for the Use of Pavers In the Trails
Action: Received and filed Streets, Trails, and Utilities Commission recommendation to the City Council to not amend Trail Standard 700 or allow any exceptions and/or waivers related to the installation of pavers in the trail system.
4. ITEM(S) PULLED FROM CONSENT CALENDAR
3.C. Recap of Actions Taken by the Planning Commission at its Meeting Held on March 12, 2025
Council Member Bash had questions and concerns regarding item 5.C. of the Planning Commission March 12, 2025, minutes in regard to the liquor license.
Community Development Director Robles answered questions and addressed concerns.
City Council Minutes - March 19, 2025
Council Member Sullivan had questions and concerns with item 5.A. of the Planning Commission March 12, 2025, minutes regarding the location of the horse corrals, the number of horse corrals provided and the material of the structures. She recommended the project be brought back for review.
Mayor Newton stated he would also like to see the project brought back to the City Council for review.
Following discussion, motion was made.
M/S SULLIVAN/NEWTON Appeal item 5.A., Site Plan 2022-01 and Conditional Use Permit 2022-02, and bring back to City Council for review. The Motion was carried by the following roll call vote:
AYES: NEWTON, BASH, BOWEN, AND SULLIVAN
NOES: GRUNDMEYER
ABSENT: NONE
ABSTAIN: NONE
M/S BASH/NEWTON Receive and file the recap of actions taken by the Planning Commission at its meeting held on March 12, 2025. The Motion was carried by the following roll call vote:
AYES: NEWTON, GRUNDMEYER, BASH, BOWEN, AND SULLIVAN
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
3.H. Consideration of Resolutions for Authorizing the Preparation of the Engineer's Report for Landscape Maintenance Districts 1-5
Mayor Newton asked Facilities and Maintenance Director Hamilton to address residence concerns and clarify the reasoning for choosing Webb Municipal Finance, LLC, to assist with the Annual Levy process for the LMD districts.
Facilities and Maintenance Director Hamilton answered the question and addressed concerns.
Council Members had no further questions, motion was made.
M/S NEWTON/BASH Adopt Resolution No. 2025-07 - A Resolution of the City Council of the City of Norco, California, Ordering the Preparation of the
City Council Minutes - March 19, 2025
Engineer’s Report for Landscape Maintenance District No. 1 (Beazer, Tract 28765) to Establish Annual Assessments for Fiscal Year 2025-26.
Adopt Resolution No. 2025-08 - A Resolution of the City Council of the City of Norco, California, Ordering the Preparation of the Engineer’s Report for Landscape Maintenance District No. 2 (Western Pacific, Tract 25779) to Establish Annual Assessments for Fiscal Year 2025-26.
Adopt Resolution No. 2025-09 - A Resolution of the City Council of the City of Norco, California, Ordering the Preparation of the Engineer’s Report for Landscape Maintenance District No. 3 (Centex, Tract 28626) to Establish Annual Assessments for Fiscal Year 2025-26.
Adopt Resolution No. 2025-10 - A Resolution of the City Council of the City of Norco, California, Ordering the Preparation of the Engineer’s Report for Landscape Maintenance District No. 4 (Norco Ridge Ranch, Tracts 29588 and 29589) to Establish Annual Assessments for Fiscal Year 2025-26.
Adopt Resolution No. 2025-11 - A Resolution of the City Council of the City of Norco, California, Ordering the Preparation of the Engineer’s Report for Landscape Maintenance District No. 5 (Hawks Crest – Tract 30230) to Establish Annual Assessments for Fiscal Year 2025-26.
The Motion was carried by the following roll call vote:
AYES: NEWTON, GRUNDMEYER, BASH, BOWEN, AND SULLIVAN
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
5. CITY COUNCIL / STAFF COMMUNICATIONS
City Clerk Roa discussed the Community Clean Up event happening on Saturday, March 22, 2025.
Mayor Newton had questions regarding the Streets, Trails and Utilities Commissions decision regarding the pavers in the horse trail.
Public Works Director Blais answered questions and addressed concerns.
Public Works Director Blais discussed the Community Clean Up event and future projects within the City.
City Council Minutes - March 19, 2025
Facilities and Maintenance Director Hamilton, Chief Otterman, Lieutenant Hall, City Attorney Burns, and Community Development Director Robles congratulated Public Works Director Chad on his new position with the City of Colton.
City Manager Free provided information regarding the City Hall Closure on Tuesday, March 25, 2025, from 8am to 12pm.
Mayor Newton, Mayor Pro Tem Grundmeyer and all Council Members thanked Public Works Director Blais for all of his work with the City of Norco and wished him well on his next endeavor.
6. ADJOURNMENT
Council Member Bowen asked for a moment of silence for San Bernardino County Sheriff's Deputy, Hector Cuevas Jr., who was killed in the line of duty on March 17, 2025.
Mayor Newton adjourned the meeting at 8:05 PM.
_________________________________
Dana Roa, CMC
City Clerk
City Council
STAFF REPORT
Date: April 2, 2025 Agenda Item:
3.C.
To: Honorable Mayor and City Council Members
From: Alma Robles, Community Development Director
Prepared By: Alma Robles, Community Development Director Department: City Council
SUBJECT:
Approval of an Agreement with Civic Solutions, Inc. to Provide Professional Planning Services
RECOMMENDATION:
Approve an agreement with Civic Solutions, Inc. for professional planning services to support the Planning Division of the Community Development Department, not to exceed $60,000.
SUMMARY:
The City Manager and Community Development Director have identified the need for professional support in the Planning Division of the Community Development Department and are requesting that the City Council approve an agreement with Civic Solutions, Inc. to assist with day-to-day services while staffing is temporarily reduced during active recruitments.
BACKGROUND:
The Community Development Department includes three divisions: Building and Safety, Code Enforcement, and Planning. The Planning Division consists of four full-time positions: Administrative Assistant (new position in recruitment), Associate Planner, Senior Planner (vacant position in recruitment), and the Community Development Director. The City Manager and Community Development Director have identified the need for professional support in the Planning Division and are requesting that the City Council approve an agreement with Civic Solutions, Inc. to assist with the Division's workload while staffing is temporarily reduced during active recruitments.
Civic Solutions, Inc. is a community development consulting firm that provides comprehensive planning and entitlement services to municipalities, special districts, and other public agencies. The firm employs professional planners at all levels of expertise who share a passion for public agency planning and a commitment to serving in the
public interest, and who stay abreast of new legislation and best practices in urban planning.
The assigned professional planners from Civic Solutions, Inc. will act as an extension of our City staff and will assist with permit plan review, development application review, and public counter support. The contract will also provide for technical planning support for projects where there may be a need for specialized expertise. This contract for professional planning services will allow Planning staff to prioritize customer service, complete daily required tasks in a timely manner, expedite backlogged items, and provide ongoing support of day-to-day operations.
No additional appropriation of funds are necessary for the provision of professional planning services due to the vacancy in the Planning Division.
FISCAL IMPACT:
The cost in the amount $60,000 for professional planning services will be offset by the vacancy of the full-time Senior Planner position's salary and benefit savings. Costs will be charged in the FY 2024-25 Operating Budget in account number 121.750.34100 - Contractual Services.
RELATIONSHIP TO STRATEGIC PLAN:
This item is consistent with the Strategic Plan Directions No. 4 - Communication and Stakeholder Experience: Enhance the stakeholder experience, engage the community, and build brand awareness through proactive, effective and consistent communication REVIEWED AND APPROVED BY:
Certified as to Availability of Funds: Daphne Liu, Accounting Manager Approved by: Lisette Free, City Manager
Approved as to Form: Harper and Burns, LLP, City Attorney ATTACHMENT(S):
Professional Agreement - Civic Solutions
Attachment A: Civic Solutions Proposal
PROFESSIONAL SERVICES AGREEMENT
CITY OF NORCO
CONSULTING AGREEMENT
PROFESSIONAL PLANNING SERVICES
THIS AGREEMENT made and entered into this ____ day of April, 2025, between the City of Norco, a municipal corporation, of the State of California, (hereinafter the “City”), located at 2870 Clark Avenue, Norco California 92860, and Civic Solutions, an independent contractor, with its principal place of business located in Ladera Ranch, California (hereinafter “Contractor”). City and Contractor are sometimes individually referred to as “Party”, and jointly as “Parties” in this agreement.
ARTICLE 1 TERM OF CONTRACT
Section 1.01. This Agreement will become effective on April ___, 2025 and will continue in effect for a period of six months from the effective date, unless terminated in accordance with the provisions of Article 7 of this Agreement.
ARTICLE 2. INDEPENDENT CONTRACTOR STATUS
Section 2.01. It is the express intention of parties that Contractor is an independent contractor and not an employee, agent, joint-ventures, or partner of City. Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between City and Contractor or any employee or agent of Contractor. Both parties acknowledge that Contractor is not an employee for state or federal tax purposes. Contractor shall retain the right to perform services for others during the term of this Agreement.
ARTICLE 3. SERVICES TO BE PERFORMED BY CONTRACTOR
Section 3.01. Contractor shall provide professional planning consulting services as more particularly described in Exhibit A, attached hereto and made a part hereof as if set forth in full (the “Project”).
ARTICLE 4. COMPENSATION
Section 4.01. In consideration of the services to be performed by Contractor, the City agrees to pay Contractor on an hourly fee basis for the performance of all tasks related to the Project, as more specifically described in Exhibit A.
Section 4.02. Contractor shall submit monthly itemized statements for
payment to the City Manager.
Section 4.03. Contractor shall be responsible for all costs and expenses incident to the performance of services for the City. The City shall be responsible for no expenses incurred by Contractor in performing services for the City, unless otherwise authorized by the City.
ARTICLE 5. OBLIGATIONS OF CONTRACTOR
Section 5.01. Contractor agrees that the City will not provide workers' compensation insurance for Contractor's employees and agents and agrees to hold harmless and indemnify the City for any and all claims arising out of any injury, disability, or death of any of Contractor's employees or agents.
Section 5.02. Contractor agrees to defend, hold harmless and indemnify City, its officers, agents and employees from and against any and all losses, liability or damages including reasonable attorneys' fees arising out of, in consequence of or resulting from the acts and/or omissions of Contractor, its subcontractor, consultants, agents or employees, intentional, negligent or otherwise. Contractor assumes no responsibility to indemnify City for the negligent acts or omissions of City, its officers, agents (excluding consultants) and employees.
Section 5.03. It is agreed upon and understood that the Contractor will maintain a policy of general liability insurance in the minimum amount of one million dollars ($1,000,000) per incident, naming the City as an additional insured to cover any liability imposed or claimed, including, attorney's fees and any legal expenses, for acts or omissions of Contractor or Contractor's agents occurring outside the normal course and scope of performance and function of duties undertaken pursuant to this Agreement.
Section 5.04. Neither this Agreement nor any duties or obligations under this Agreement may be assigned by Contractor without the prior written consent of the City.
Section 5.05. As Contractor is not the City's employee, Contractor is responsible for paying all required state and federal taxes. In particular:
• City will not withhold FICA (Social Security) from Contractor's payments. • City will not make state or federal unemployment insurance contributions on Contractor's behalf.
• City will not withhold state or federal income tax from payment to Contractor. • City will not make disability insurance contributions on behalf of Contractor. • City will not obtain workers' compensation insurance on behalf of Contractor; and
• City will not contribute to CalPERS or any alternative pension plan on behalf of Contractor.
ARTICLE 6. OBLIGATIONS OF THE CITY
Section 6.01. The City agrees to comply with all reasonable requests of Contractor and provide access to all personnel and documents reasonably necessary for the performance of Contractor's duties under this Agreement.
ARTICLE 7. TERMINATION OF AGREEMENT
Section 7.01. Contractor acknowledges, understands, agrees and warrants that it serves at the pleasure of the City, and has no vested rights whatsoever in continuation of the business relationship with the City, or in compensation which may be provided beyond the stated terms of this Agreement. The City and Contractor shall have the right to terminate this Agreement with or without cause at any time by giving written notice of not less than 30 days notice. The Agreement shall be deemed terminated at the end of the notice period. Contractor shall be entitled to compensation for all work Contractor performs in accordance with the terms of this Agreement up until the effective date of termination.
ARTICLE 8. CONFLICT OF INTEREST
Section 8.01 Contractor covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which would conflict or appear as a conflict in any manner or degree with the performance of services required to be performed under this Agreement. In the event that an activity of the Contractor may be construed to constitute a conflict of interest with its responsibilities hereunder, Contractor shall obtain permission for such activity from the City before proceeding further with such activity. In the event a conflict of interest is alleged, the City shall finally and conclusively determine if a conflict of interest in fact exists or can be foreseen. In such cases, where a conflict of interest is deemed to occur or is determined to occur, the City may terminate this Agreement in accordance with Article 7.
ARTICLE 9. GENERAL PROVISIONS
Section 9.01. Any notices to be given hereunder by either party to the other may be affected either by personal delivery in writing or by U.S. mail to the following addresses:
AGENCY: City of Norco
Attn: City Manager
2870 Clark Avenue
Norco, CA 92860
CONTRACTOR: Civic Solutions
111 Corporate Drive, Suite 120
Ladera Ranch, California 92694
Section 9.02. The formation, construction and performance of this Agreement shall be construed in accordance with the laws of the State of California Section 9.03. This Agreement constitutes the sole and complete Agreement between the parties. This Agreement supersedes any and all written and oral agreements between the parties and any ordinance, rule, regulation, policy, or procedure of the City that is inconsistent with the Agreement. No amendments may be made to this Agreement except in writing and signed by the parties hereto.
Section 9.04. If any provision of this Agreement is held invalid or unenforceable, the remainder shall remain in full force and effect. ///
///
///
///
IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first written above.
Name of Contractor: Civic Solutions
By:
_____________________________
Thomas Merrell, Its President
Approved as to Form:
_______________________________
Troy L. Tate, Esq.
General Counsel for Civic Solutions, Inc.
NOTE: SIGNATURES OF CORPORATE OFFICIALS MUST BE NOTARIZED Attach Certificate of Notary Acknowledgment
Agency: CITY OF NORCO, a Municipal Corporation
By:
_______________________________
Greg Newton
Mayor
ATTEST:
_________________________________
Dana Roa, City Clerk
Approved as to Form:
_______________________________
Harper & Burns, LLP
City Attorney
EXHIBIT A
Scope of Work and Payment Terms
February 14, 2025
Submitted to:
City of Norco
111 Corporate Drive, Suite 120 │ Ladera Ranch, CA 92694 949.489.1442
www.civicsolutions.com
Proposal to Provide Professional Planning Services
for the City of Norco
111 Corporate Drive, Suite 120
Ladera Ranch, CA 92694
949/489-1442
www.civicsolutions.com
February 14, 2025
Alma Robles, Community Development Director
City of Norco
2870 Clark Avenue
Norco, CA 92860
Re: Proposal to Provide Professional Planning Services to the City of Norco Dear Alma,
Thank you for contacting Civic Solutions to submit a proposal to provide professional planning support to your department. We understand there is a need for experienced staff to provide planning and development review services while you are short-staffed.
This would include development application review, counter support, and general technical planning expertise in areas where there may be a need for additional proficiency and experience.
We currently have available Kirt Coury, Principal Planner, to provide immediate development review services for at least one major project, as well as David See, Principal Planner, to offer additional support in development review if needed. In addition, depending on the hours needed, our Planning Assistant, Mike Martin, will have near-term availability to provide counter support and direct support to your Associate Planner, Erika Woods-Diaz.
We appreciate the opportunity to provide you with a proposal to supplement your planning staff. Please let us know if you have any additional questions or require more information, and we would be happy to meet with you in person to further discuss our proposal and qualifications.
Sincerely,
Jean Ward, AICP Thomas G. Merrell
Vice President, Community Planning Services President
(626) 584-8951 (949) 489-1442
Professional Planning Services February 14, 2025 page 1 City of Norco
Firm Overview Civic Solutions is a planning and community development consulting firm that provides comprehensive planning and entitlement services to municipalities, special districts, and other public agencies. The firm is established around the principle that community planning and development ultimately serve the public interest. We specialize in providing a full range of planning services, including project management, community engagement, zoning and land use code administration, advance planning, general plans, specific plan and design guidelines preparation, ministerial and discretionary case processing, and CEQA documentation. Serving numerous cities and counties permits us to bring a broader perspective to the City, giving us the ability to use the best practices of the planning profession for the ultimate benefit of the community.
Civic Solutions is ideally equipped to successfully provide planning services to the satisfaction of our clients and the communities we serve. A major component of our services is to provide contract planning staff at all levels to our municipal clients.
With this experience, we have the unique perspective of implementing policy plans and regulatory documents on a daily basis, giving us the depth of understanding of how plans and regulations function “at the counter” and how policies function in their use to decision makers. Most importantly, by working in municipalities all over Southern California as contract planners, we are adept and responsive, providing the highest level of customer service to our clients. We fit seamlessly into the cities we serve, and maintain open lines of communication.
Civic Solutions is available to work with your Planning team, and the following are examples of the types of service we can provide:
Zoning Review & Customer Service
• Work with applicants, residents, and industry professionals at public counter
• Respond to phone and email inquiries relating to the planning and permitting process
• Respond to public records requests
• Perform planning application intake
• Perform research and analysis
• Review construction plans for building permitting
• Review and process ministerial and administrative permit applications • Calculate fees relating to planning application review and permits • Maintain records
Development Review
• Work with applicants on submittal requirements and advise on the development review process
• Attend staff review and pre-application meetings
• Review and examine project applications and associated drawings, specifications, and supporting records to confirm compliance with the City’s ordinances, policies, and guidelines
Professional Planning Services February 14, 2025 page 2 City of Norco
Firm Overview
(cont.)
• Coordinate with and manage staff, technical professionals, and stakeholders
• Respond to inquiries from stakeholders from among the public and internal and external agencies and departments
• Manage the CEQA and other similar processes required by federal, state, and local laws (e.g. NEPA, tribal consultation)
• Report issues of concern to appropriate staff
• Prepare draft staff reports, resolutions, ordinances, and other related documents
• Present at design review board, Planning Commission, City Council, and other public meetings.
Civic Solutions was established in 1991 and has maintained its focused commitment to serve public agencies for the last 34 years. Civic Solutions is headquartered in Ladera Ranch, with a satellite office in the City of Ontario, and senior managers working in Los Angeles, Riverside and San Diego.
Professional Planning Services February 14, 2025 page 3 City of Norco
Core Services We deliver “added value” service in all planning functions. The experienced professionals who staff our firm have extensive backgrounds in public sector service.
Some of the firm’s recent clients include the cities of Anaheim, Lake Forest, Encinitas, Jurupa Valley, La Mesa, Malibu, Menifee, Moreno Valley, Oceanside, Rancho Cucamonga, Buellton, Westlake Village and San Clemente.
Our services include all functions of a municipal planning department, including project management, discretionary case processing, public information services, environmental analyses, plan checking, site visits, mitigation monitoring, zoning code amendments, architectural design guidelines, specific plans, policy planning, and general plan updates. We provide support services in the form of graphics, design evaluation, analysis of alternatives, report writing, environmental impact documentation, annexations, grant writing, housing programs, citizen participation programs, and other community development activities.
Planning Services
Civic Solutions has earned an excellent reputation throughout Southern California for our contract planning and environmental review services. We are able to quickly get up to speed on a jurisdiction’s regulations, policies, and operating procedures and seamlessly provide current and advance planning services. Our staff regularly provides counter services, customer support, discretionary case processing, plan checking, report writing, and presentations to Planning Commissions and City Councils.
We are skilled at development review and are able to perform slope and grading analyses, assess view impacts, and evaluate project design features. It is our goal that applicants cannot distinguish between staff and consultant project managers. We are also experienced long-range planners and can readily interpret policies, evaluate issues, and prepare general plan amendments, code amendments, focused issue studies, etc.
Discretionary Case Processing
Uniquely organized and staffed for this purpose, Civic Solutions provides development review and discretionary case processing services efficiently and effectively. Our philosophy is to perform the work to the standards of our municipal clients. Seeking feedback from staff, decision makers, and applicants, we continuously fine-tune our work methods. We fit seamlessly into the organizations we serve.
Permit Plan Review
Building and grading permit clearances are much shorter in duration and primarily require review for code compliance, conditions of approval, and consistency with approved plans. Our planners are prepared to expedite the plan review process for all permit review cases, including those for which the entitlement case was handled by City staff.
Professional Planning Services February 14, 2025 page 4 City of Norco
Core Services
(cont.)
Environmental Services
Civic Solutions’ staff is thoroughly familiar with California Environmental Quality Act (CEQA) requirements and procedures and regularly provides a full range of environmental planning services for our municipal clients. We review discretionary permit applications and legislative proposals to determine the appropriate environmental document for each project. We are skilled at preparing environmental Exemptions, Negative Declarations, Mitigated Negative Declarations, and Addenda and also work on behalf of cities to manage environmental documents prepared by outside consultants. We are familiar with CEQA noticing requirements, including notices of completion (NOCs), determination (NODs), and preparation (NOPs), including whether and how to file these documents with the State Clearinghouse and the County Clerk. Civic Solutions’ staff are also familiar with tribal consultation and noticing requirements. Public agencies value our ability to prepare thorough and legally defensible environmental documents in compliance with state requirements.
Project Management Services
Civic Solutions has been particularly successful in managing specific projects for our public agency clients. High profile projects of critical importance to the city or the county for tax base and economic development must have a sustained focused effort to keep the applicant’s process on track, and Civic Solutions can provide project management services independent of a consultant team, as a representative of City staff. Our senior project managers have provided such services for large-scale specific plans, resort hotel projects, large scale industrial developments, residential neighborhoods, large scale mixed-use development, renewable energy plants, and annexations.
Our project managers oversee consultant teams and individual contracts with the consultants, managing the schedule, completion of major deliverables, and work tasks; monitoring the overall budget; and reviewing consultant invoices on a monthly basis. We also prepare staff reports, meeting and presentation materials as necessary, and continuous project updates throughout the process, and present to decision-makers and the community on a regular basis.
Professional Planning Services February 14, 2025 page 5 City of Norco
Organization and
Staffing
Civic Solutions is a California corporation led by its owner and founder, Thomas G.
Merrell, AICP, President and Chairman of the Board. The firm currently has 21 employees and 4 subconsultants. To provide the City with the ideal professionals and best fit for its staffing needs, we are pleased to offer two of our Principal Planners who will be available to assist the City of Norco with review of large, complex development applications. These planners are seasoned professionals with extensive experience serving public agencies. In addition, depending on the hours needed, we are pleased to offer our Planning Assistant for counter services and direct planning support to your Associate Planner. Following are resumes for Kirt Coury, David See, and Mike Martin.
Professional Planning Services February 14, 2025 page 6 City of Norco
Highlights
• Discretionary Case Processing
• Research and Analysis
• Zoning Review
• Land Entitlement
• Project Review
• Advance Planning
• Project Management
• Environmental Review
• Public Hearing Presentations
Education
Bachelor of Science, Urban and
Regional Planning, California
Polytechnic Institute, Pomona,
California
Affiliations
Member, American Planning
Association (APA)
Kirt A. Coury
Principal Planner
Mr. Coury brings over 25 years of planning experience in the public sector. He serves as the company’s Vice President of Civic Planning Services and provides planning and project management services to the company’s municipal clients.
He has served in a variety of roles with the cities of Lake Forest, La Mesa, San Clemente, Encinitas, Buena Park, Compton, Lake Elsinore, Calexico, Rancho Cucamonga, Brea, and other municipalities. His experience has included current and advance planning, the preparation of environmental documentation, providing public counter services, and managing complex projects and other assignments. He has reviewed Environmental Impact Reports (EIRs) and Mitigated Negative Declarations (MNDs) to ensure completeness and compliance with the California Environmental Quality Act (CEQA). He has prepared and presented various staff reports at Zoning Administrator and Director hearings, Planning Commission and City Council meetings.
Mr. Coury began work with Civic Solutions in 2014, providing City planning consulting services to several of the company’s municipal clients. In 2017, Mr.
Coury was appointed to be Municipal Planning Services Manager, helping to coordinate consulting services for municipal agencies. Like all of the company’s management team, Mr. Coury also provides direct services to cities and has an excellent reputation for the quality and professionalism of his work.
Key projects that highlight Mr. Coury’s project management and staffing services include:
• City of Rancho Cucamonga – Principal Planner
• City of La Mesa – Project Manager
• City of Compton – Project Manager
• County of Imperial – Project Manager
• City of Lake Elsinore – Project Manager/Senior Planner • City of Calexico – Project Manager
• City of Lake Forest – Senior Planner
• City of San Clemente – Senior Planner
• City of Encinitas – Senior Planner
• City of Buena Park – Associate Planner
• City of Brea – Assistant Planner
• City of Norco – Assistant Planner
• City of Montclair – Planning Technician
Professional Planning Services February 12, 2025 page 7 City of Norco
Highlights
• Leadership
• Project Management
• Current Planning
• Entitlement Processing
• Site and Architectural
Design
• Environmental Review
• CEQA Processing
• Zoning Code Updates
• Geneal Plan and Specific
Plan Administration
• Public Facilitation
• Community Relations
Education
Bachelor of Science, Urban and
Regional Planning, University
of Southern California, Los
Angeles
David See
Principal Planner
Mr. See is a professional urban planner with extensive leadership and management experience in planning and community development. His skills include project management and entitlement processing for complex development projects; architectural and urban design review; environmental review and CEQA processing; preparation of general plan and zoning ordinance amendments; and community outreach. Mr. See has outstanding oral and written presentation skills. Additionally, he is an excellent problem solver, communicator, collaborator, and facilitator. Mr.
See is experienced and knowledgeable in municipal land use regulations and development processes and environmental and planning law.
Highlights of Mr. See’s experience includes:
Civic Solutions, Inc., Principal Planner (Subconsultant), 2021-2025 Works with municipal clients performing a variety of duties in support of the planning function. Duties include managing and preparing zoning code updates, creation and management of long range planning initiatives, research and analysis, staff support to municipal planning departments, and project management.
Responsible for preparation of planning reports including recommendations and supporting data for approval and presentation to City Councils, Planning Commissions and other public bodies. He also provides assistance to city staff, applicants, and consultants in understanding municipal requirements, analyzing issues, and recommending solutions and strategies. Managed a 152-acre Angel Stadium mixed-use redevelopment project for the City of Anaheim.
See’s Development Advisors LLC, 2020-2025
Manages project teams that include planners, engineers, architects, and environmental consultants. Provides project management, entitlement processing, environmental review, site and architectural design, and permit expediting services for development projects and businesses. Coordinates community relations programs to promote understanding of land use applications. Oversees governmental relations at the staff, commission, and council levels. Prepares specialized graphic materials used for presentation and evaluation to commissions, councils and special interest groups.
City of Anaheim, Planning Services Manager, 2020
Reported to the Community Development Director and provided operational leadership to a division of 35 employees. Regularly advised Council members, Planning Commissioners, and executive staff and collaborated with staff on issues of interest. Served as Secretary to the Planning Commission. Managed staff in the advance planning, current planning, historic preservation, public information and accounting divisions.
Professional Planning Services February 12, 2025 page 8 City of Norco
David See
continued
City of Anaheim, Principal Planner, 2015-2020
Provided lead supervision for the Current Planning team. Served as staff representative and liaison to the Planning Commission. Managed Planning Commission agendas, staff reports, presentations, and public hearings. Served as the liaison between community groups, other City departments, the business community, developers, and the general public on development projects.
Negotiated with developers and property owners on development projects. Acted as development coordinator for complex and sensitive projects, both large and small. Managed, coordinated, and monitored the work of on-call planning, environmental, and traffic consultants.
City of Anaheim, Senior Planner, 2000-2015
Processed General Plan Amendments, Code Amendments, Development Agreements, Reclassifications, Conditional Use Permits and other zoning entitlements. Provided project management for large and complex projects such as the Kaiser Hospital complex, mixed use projects in the Downtown area, 55-acre Panattoni industrial complex, 670-unit Colony Park neighborhood, affordable housing projects, and hotels in the Resort area and the Packing District. Prepared and reviewed environmental documents in compliance with CEQA. Supervised and managed Zoning Administrator agendas. Prepared PowerPoint presentations; gave oral presentations to the Planning Commission at public hearings; responded to inquiries from the Planning Commission and stakeholders.
Professional Planning Services February 12, 2025 page 9 City of Norco
Highlights
• Customer Service
• Research & Analysis
• Training Skills
• Presentation Skills
• Problem Solving Skills
• Statistical Analysis
Education
Bachelor’s Degree, Public
Administration, California
State University, Fullerton,
California
Technical Skills
MS Office Suite
Accela
Database Quality Assurance/
Quality Control
Michael Martin
Planning Assistant
Michael Martin has over 5 years experience in customer service with excellent communication, organization, and training skills. Michael is analytical, flexible, attentive to detail, adaptable, and has strong problem-solving, team building, and presentation skills. He is a very quick learner and is team focused.
Highlights of Mr. Martin's experience include:
Civic Solutions, Inc., Planning Assistant/Planning Technician, 2023-Present Since joining the firm, Michael has worked exclusively in our contract with the City of Jurupa Valley. Duties include zoning plan review, public counter support, entrylevel project management for residential and non-residential applications, discretionary case processing, field inspections, and assisting with the analysis for and preparation of planning studies and reports that are typically for staff-level recommendations. Provides assistance to applicants and consultants in understanding municipal requirements, analyzes issues, and recommends solutions and strategies. Attends meetings and provides presentations. With an eye and mind for detail, Mr. Martin examines ministerial and discretionary permit history prior to issuing zoning clearance on business license applications, drafts covenants and verifies accuracy of ordinance transcription into an electronic municipal code.
Home Depot, Customer Service Associate, 2019–2023
Processed returns, purchases, and special orders. Performed inspections of rental vehicles and tools, and validated returns. Used back-end systems to correct, alter or otherwise change orders. Communicated with other divisions to process or alter complex orders. Handled system privileges to authorize and locate lost receipts, and managed items being returned to the vendor or marked for disposal.
Fullerton Collaborative, Intern to the Executive Director, 2017 Provided research and presentation assistance during board and general meetings.
Presented data and reports via PowerPoint. Managed volunteers, survey design, press releases, and marketing. Assisted with event coordination, data entry, and statistical analysis.
Professional Planning Services February 12, 2025 page 10 City of Norco
Hourly Rates Civic Solutions will provide Professional Planning Services to the City of Norco at the following hourly rates.
Position Hourly Rate
Principal Planner $160
Senior Planner $150
Associate Planner $140
Assistant Planner $130
Planning Technician $120
Rates are in effect only for FY ’24-’25, and are subject to annual review and adjustment on July 1 each year thereafter.
The above hourly rates apply only to authorized services provided under the scope and contract, and do not apply to contract administration activities such as invoicing, contract performance discussions, etc. Work performed on a time and material basis will be billed monthly, and will be due in accordance with the terms of the contract.
Reimbursable expenses:
• Large duplication or document publishing projects
• Specialized graphics projects
• Messenger and overnight delivery
Professional Planning Services February 12, 2025 page 11 City of Norco
References City of Rancho Cucamonga
Jennifer Nakamura, Planning Director
[email protected]
(909) 774-4324
City of Moreno Valley
Danielle Harper-Scott, Principal Planner
[email protected]
(951) 413-3224
City of Jurupa Valley
Joe Perez, Assistant City Manager/Community Development Director [email protected]
(951) 332-6464
City of Encinitas
Roy Sapa’u, City Planner
[email protected]
(760) 633-2734
City of Westlake Village
Kristen Asp, Planning Director
[email protected]
(818) 706-1613
City of Anaheim
Scott Koehm, Principal Planner
[email protected]
714-765-5395
City Council
STAFF REPORT
Date: April 2, 2025 Agenda Item:
5.A.
To: Honorable Mayor and City Council Members
From: Sam Nelson, Interim Public Works Director
Prepared By: Chad Blais, Public Works Director
Department: Public Works
SUBJECT:
Water, Sewer, and Recycled Water Rate Study Discussion and Recommendations RECOMMENDATION:
Receive the 2025 Water, Sewer, and Recycled Water Rate Study and recommendations and provide direction to implement the Proposition 218 noticing process for holding a public hearing on June 4, 2025 on changes to the Water, Sewer and Recycled Water rates.
SUMMARY:
On February 5, 2025, a study session comprised of the City Council and Street, Trails, and Utility Commission reviewed and commented on a presentation by Stantec and Public Works Director regarding a preliminary analysis of the financial health of the Water and Sewer Funds. The presentation outlined numerous fiscal scenarios pertaining to revenue generation based on current rates and potential increases in rates to cover future operation and/or capital improvement expenditures. Staff and the City's consultant, Stantec, prepared a Rate Study report outlining a multi-year rate adjustment for the Water and Sewer Funds. In addition, the report also makes a recommendation to establish a new Recycled Water Rate that will serve new users. Staff is seeking Councils review and approval of the report and recommendations to authorize staff to schedule a public hearing for June 4, 2025, to consider adoption of multi-year adjustments in water, sewer rates, and recycled water rates and mail out the Proposition 218 notification to all ratepayers and property owners.
BACKGROUND:
On February 21, 2024, the City retained Stantec Consulting Services (Stantec) to study the financial stability of the Water and Sewer Funds and perform a cost-of-service analysis. The cost-of-service analysis uses a planning period of 10 years and a copy of the report is attached for the Council's review. The report established rates that provide water and sewer revenue to support operations, maintenance, and capital improvement
program. A rate study is recommended to be conducted approximately every five years to ensure the City will have sufficient water and sewer revenues to meet ongoing operational and capital obligations. The last rate study was conducted in 2016 with a five-year rate structure approved on December 7, 2016. Stantec was also tasked with developing a Recycled Water rate structure to be used when recycled water is anticipated to be available in calendar year 2026.
The City’s last rate study was completed in 2016 and City Council approved adjustments to both water and sewer rates over a five-year period (FY 2017 to FY 2021). While the water rates were increased as adopted, the City elected to not increase sewer rates given the performance of the sewer fund at that time. As a result, sewer rates have not been increased for over a decade and water rates have remained constant over the past four years (last adjustment was in FY 2021).
While the City has made significant progress with reinvesting in the utility systems, particularly the water system, increases in operational costs have placed significant pressure on the utility systems. The majority of the input costs associated with managing, operating and maintaining the utility systems have increased substantially due to inflationary increases and supply chain issues related to Covid-19. Given the cost pressures, the lack of rate adjustments and the need to continue to address critical capital investments, the City elected to complete a comprehensive rate study.
It should be noted that prior to moving forward with the rate study, the Council hired an outside consultant to conduct an Operational Assessment of the Public Works Department to evaluate operations and identify opportunities to enhance efficiency and effectiveness in providing service to the community. This report summarizes our analysis of resources, structure, staff perceptions, and industry best practices to develop recommendations on staffing, operations, communication, and processes.
Overall, the department was given high marks for efficiency and has both highly skilled and knowledgeable employees who take great pride in their work and are committed to providing excellent community service.
Water, Sewer, and Recycled Water Report
The report examines the financial data for the water and sewer funds for the past 5- years and reviews the projected financial obligations and projects projected over the next 5-years using detailed water and sewer financial modeling software. The rate study was developed using four primary goals:
i.Fairly and equitably recover each fund’s current cost of providing service and meet revenue requirements;
ii.Conform to accepted industry practice and legal requirements; iii.Provide fiscal stability and recovery of fixed costs of the system; and iv.Maintain affordability to low volume and average users to the extent possible.
The Water, Sewer, and Recycled Water Funds must recover all costs from user charges as it is business-type in nature and is not supported by any taxes. The City is required to set rates that are sufficient to cover operating cost, capital improvements and its debt service obligations. Funds derived from water, sewer, and recycled water rates may not be used for any other purpose.
The recommended financial management plan and five-year corresponding plan of water and sewer rate revenue adjustments are based upon the revenue and expense information, beginning balances, and assumptions as described in the full report. The specific five-year rate revenue adjustment plan recommended herein is presented in the following table.
Recommended Plan of Water & Sewer Rate Revenue Increases FY2026 FY2027 FY2028 FY2029 FY2030
Effective Date: 07/01/25 07/01/26 07/01/27 07/01/28 07/01/29 Water Rate
Revenue
Increases
9.0% 9.0% 8.0% 6.0% 6.0%
Sewer Rate
Revenue
Increases
5.0% 5.0% 4.0% 4.0% 4.0%
The first year of the rates (FY 2025-26) reflect the modifications resulting from the cost of service and therefore all rates and charges do not increase at the same percentage increase in the first year (fixed charges increase slightly more than usage rates to reflect the cost of service).
Water Rates
The City’s current water rate structure consists of a fixed monthly charge and a variable usage charge based on metered water usage. The fixed monthly charge portion of the water rate structure currently generates approximately 50% of the revenues for the water system with the remaining 50% generated from the usage charge. The level of cost recovery is consistent with the Cost-of-Service Allocation (COSA) analysis complete as part of the Study and therefore the current water rate structure is appropriate and does not require modification.
In addition to the standard water rates, the Study reviewed the current private fire protection charges assessed by the City. The cost of providing this service was determined as part of the COSA analysis and recommended private fire protection charges have been calculated.
The recommended water rates summarized in the following tables are intended for implementation on July 1, 2025, and each subsequent fiscal year. The adjustment reflected in the recommended plan of water rate revenue increases outlined in the table below.
Recommended Water Rates
Fixed Charge Current FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 3/4" $47.80 $52.60 $57.34 $61.93 $65.65 $69.59
1" $71.01 $77.48 $84.45 $91.21 $96.68 $102.48
1 1/2" $165.95 $179.25 $195.38 $211.01 $223.67 $237.09
2" $213.47 $230.18 $250.90 $270.97 $287.23 $304.46
3" $559.23 $600.79 $654.86 $707.25 $749.69 $794.67
4" $996.81 $1,069.82 $1,166.10 $1,259.39 $1,334.95 $1,415.05 6" $2,371.04 $2,542.82 $2,771.67 $2,993.40 $3,173.00 $3,363.38 8” $3,804.31 $4,079.10 $4,446.22 $4,801.92 $5,090.04 $5,395.44 10” $6,018.68 $6,452.62 $7,033.36 $7,596.03 $8,051.79 $8,534.90
12” $9,893.75 $10,606.21 $11,560.77 $12,485.63 $13,234.77 $14,028.86 Usage Charge
Rate (per HCF) $2.70 $2.92 $3.18 $3.43 $3.64 $3.86
Recommended Fire Protection Charges
Current FY2026 FY2027 FY2028 FY2029 FY2030
Fixed
Charge Current FY 2025-26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30 2" $50.88 $53.80 $58.65 $63.34 $67.14 $71.17
3" $52.83 $56.10 $61.14 $66.04 $70.00 $74.20
4" $56.20 $60.05 $65.45 $70.69 $74.93 $79.43
6" $68.30 $74.23 $80.91 $87.39 $92.63 $98.19
8” $89.16 $98.70 $107.58 $116.19 $123.16 $130.55
10” $120.54 $135.50 $147.70 $159.51 $169.08 $179.23
12” $164.03 $186.51 $203.29 $219.55 $232.73 $246.69
Usage
Charge
Rate (per
HCF) $5.40 $5.71 $6.23 $6.72 $7.13 $7.55
Sewer Rates
The current sewer rate structure was reviewed and deemed appropriate given the services provided by the City. The current sewer fixed monthly charge generates approximately 60% of the sewer system revenues providing revenue stability and a relatively high level of fixed cost recovery. The recommended sewer rates summarized below are intended for implementation on July 1, 2025, and each subsequent fiscal year. The adjustment reflects the recommended plan of sewer rate revenue increases outlined in the table below.
Recommended Sewer Rates
Current FY2026 FY2027 FY2028 FY2029 FY2030
Current FY 2025-
26 FY 2026-
27 FY 2027-
28 FY 2028-29 FY 2029-30
Monthly Fixed Charge $51.00 $53.55 $56.23 $58.48 $60.82 $63.25 Sewer Usage Charge
Rate (per HCF) $8.00 $8.40 $8.82 $9.17 $9.54 $9.92
Monthly Non-Connect Fee $19.00 $19.95 $20.95 $21.79 $22.66 $23.57 Recycled Water Rates
The City does not currently provide recycled water within the City. A cost-of-service analysis was completed for the City’s existing and future recycled water infrastructure and operations to determine the appropriate pricing for recycled water service once the City is able to provide the service. The rates are set to cover the estimated annual cost of providing recycled water. The table below presents the recycled water rates assuming the City has an initial demand of 350 acre-feet per year. The table
demonstrates the usage charge required to fund operating costs and capital costs and incorporates a fixed monthly charge that would cover 5% of the annual capital costs.
Recommended Recycled Water Rates
Year 1 Year 2 Year 3 Year 4 Year 5
Fixed Charge FY 2025-
26 FY 2026-27 FY 2027-28 FY 2028-29 FY 2029-30
3/4" $23.82 $49.40 $50.38 $51.34 $51.79
1" $37.79 $78.40 $79.66 $81.47 $82.18
1 1/2" $94.97 $197.03 $200.93 $204.73 $206.53
2" $123.59 $256.40 $261.47 $266.42 $268.76
3" $331.84 $688.39 $702.03 $715.32 $721.60
4" $595.38 $1,235.11 $1,259.57 $1,283.42 $1,294.69
6" $1,423.04 $2,952.09 $3,010.55 $3,067.56 $3,049.49
8” $2,286.25 $4,742.84 $4,836.76 $4,928.35 $4,971.62
10” $3,619.91 $7,509.51 $7,658.21 $7,803.23 $7,871.74
12” $5,953.76 $12,351.08 $12,595.66 $12,834.18 $12,946.87 Recycled Water Usage Charge
Total Rate (per HCF) $2.21 $3.22 $3.22 $3.23 $3.23
Staff recommends that City Council review and approve the recommendations regarding rate alternatives for Water, Sewer, and Recycled Water rates to support future Operational & Maintenance and Capital expenditures over the next five years, authorize staff to mail the Proposition 218 Notice (see Prop 218 Notice) and schedule a Public Hearing for June 4, 2025 for consideration of adopting multi-year adjustments for Water, Sewer, and Recycled Water rates.
FISCAL IMPACT:
In order to prepare the Prop 218 Notice and mail the required notices to applicable customers and property owners the City will coordinate with BBK ($5,000) to prepare the notice and a printing/mailing vendor ($15,000). There is sufficient funding in the Water, Sewer, and Recycled Water Operating Budgets to cover this cost.
RELATIONSHIP TO STRATEGIC PLAN:
This item is consistent with Strategic Plan Goal No. 3 - Economic Development & Financial Stability: Assure financial stability by expanding development efforts, diversifying revenue sources and continuing prudent financial management and Strategic Plan Goal No. 5 - Infrastructure & Asset Management: Ensure timely preservation, replacement, improvement and acquisition of infrastructure and capital assets.
REVIEWED AND APPROVED BY:
Certified as to Availability of Funds: Daphne Liu, Accounting Manager Approved by: Lisette Free, City Manager
Approved as to Form: Harper and Burns, LLP, City Attorney ATTACHMENT(S):
2025 Water, Sewer and Recycled Water Rate Study
Norco - Prop 218 Notice
City of Norco
Water, Sewer, and Recycled Water Rate
Study - Final Report
March 26, 2025
March 26, 2025
Mr. Chad Blais
Director of Public Works
City of Norco
2870 Clark Avenue
Norco, CA 92860
Re: Water, Sewer, Recycled
Water Rate Study - Final Report
Dear Mr. Blais,
Stantec is pleased to present this Final Report on the Water, Sewer, and Recycled Water Rate Study (Study) that was
conducted for the City’s Water, Sewer, and Recycled Water Enterprise Funds. We appreciate the professional assistance provided by you and all of the members of City staff who participated in the analysis and study.
If you or others at City have any questions, please do not hesitate to call us at (202) 585-6391 or email me at
[email protected]. We appreciate the opportunity to be of service to the City, and we look forward to the possibility of doing so again in the near future.
Sincerely,
David A. Hyder
Senior Principal
1299 Pennsylvania Ave NW
Washington DC 20004
(202) 585-6391
[email protected]
Enclosure
TABLE OF CONTENTS
Executive Summary ...................................................................................................... 1 E.1 Objectives......................................................................................................................................... 1 E.2 Scope of Work.................................................................................................................................. 1 E.3 Background ...................................................................................................................................... 2 E.4 Revenue Sufficiency Analysis and Financial Plan ........................................................................... 2 E.5 Cost of Service Allocation ................................................................................................................ 3 E.6 Rate Structure Analysis.................................................................................................................... 4 E.7 Recycled Water Rates ..................................................................................................................... 6
1. Introduction ............................................................................................................... 7
1.1 Background....................................................................................................................................... 7
1.1.1 Water System.......................................................................................................................... 7
1.1.2 Wastewater System ................................................................................................................ 7
1.1.3 Recycled Water System.......................................................................................................... 8
1.1.4 Rate History ............................................................................................................................ 8
1.2 Objectives ......................................................................................................................................... 9
1.3 General Methodology .....................................................................................................................10
1.4 Acroynms........................................................................................................................................10
2. Revenue Sufficiency Analysis................................................................................ 12
2.1 Data & Assumptions .......................................................................................................................12
2.1.1 Beginning Fund Balances..................................................................................................12
2.1.2 Growth ...............................................................................................................................13
2.1.3 Revenues...........................................................................................................................13
2.1.4 Operating Expenses & Existing Debt ................................................................................13
2.1.5 Cost Escalation..................................................................................................................14
2.1.6 Capital Improvement Program...........................................................................................14
2.1.7 Interest Earnings on Invested Funds.................................................................................15
2.1.8 Minimum Operating Reserve Balance...............................................................................15
2.1.9 Rate Stabilization Reserve ................................................................................................15
2.1.10 Future Borrowing Assumptions.......................................................................................16
2.1.11 Debt Service and Coverage............................................................................................16
2.1.12 Summary of Assumptions ...............................................................................................16
2.2 Financial Planning Analysis...........................................................................................................17
2.3 Financial Planning Scenarios ........................................................................................................17
2.3.1 Water Fund ........................................................................................................................17
2.3.2 Sewer Fund........................................................................................................................18
2.3.3 Recommended Rate Increases .........................................................................................19
3. Cost-Of-Service Allocation..................................................................................... 21
3.1 Process..........................................................................................................................................21
3.2 Components of the Analysis..........................................................................................................22
3.2.1 Functional Cost Allocations ...............................................................................................22
3.2.2 Distribute Function Costs to System Parameters..............................................................23
3.2.5 Allocation of System Parameter Costs to Rate Components............................................24
3.2.6 Calculation of Private Fire Cost Allocation ........................................................................25
4. Rate Structure Analysis.......................................................................................... 26
4.1 Water Rates...................................................................................................................................26
4.1.1 Current Water Rates..........................................................................................................26
4.1.2 Evaluation of the Water Rate Structure .............................................................................27
4.1.2.1 Fixed Charges.................................................................................................................27
4.1.2.2 Volumetric Charges ........................................................................................................27
4.2 Recommmended Water Rates ......................................................................................................27
4.2.1 Fixed Monthly Charge Methodology..................................................................................27
4.2.2 Uniform Usage Rate Methodology ....................................................................................28
4.2.3 Recommended Water Rates .............................................................................................28
4.2.4 Private Fire Protection Charges.........................................................................................28
4.3 Sewer Rates ..................................................................................................................................29
5. Recycled Water Rates............................................................................................. 31
5.1 Recycled Water Costs ....................................................................................................................31
5.2 Recycled Water Customers and Demand Forecast.......................................................................33
5.3 Sales of Recycled Water to Outside Agencies...............................................................................34
5.4 Recycled Water Rates....................................................................................................................34
6. Customer Impacts and Utility Comparisons......................................................... 36
6.1 Water and Sewer User Rate Bill Impacts .......................................................................................36
6.2 Water and Sewer Bill Comparison Survey .....................................................................................37 APPENDIX: Revenue Sufficiency Analysis Schedules............................................ 40
Executive Summary
City of Norco | Water and Sewer Rate Study Final Report Stantec | 1
EXECUTIVE SUMMARY
This Executive Summary presents an overview of the results of the Comprehensive Water, Sewer, and Recycled Water Rate Study (Study) that was conducted for the water, sewer and recycled water systems (collectively the “Utility”) of the City of Norco (City) by Stantec Consulting Services (Stantec). While the Executive Summary presents the primary conclusions and recommendations developed during the study, the full report outlines all of the key assumptions and detailed analysis completed to arrive at the results of the Study and should be consulted to gain a full understanding of the analysis.
E.1 OBJECTIVES
The primary objectives of this Study are to:
i. Develop a multi-year financial management plan for each fund that identifies future rate adjustments to water and sewer rates that will provide adequate revenues to meet the ongoing financial requirements of each fund;
ii. Integrate the capital funding needs per the City’s adopted Capital Improvements Plan for the Utility including evaluation of appropriate funding levels and sources of funds; iii. Identify appropriate reserve levels for each fund to provide financial stability and resiliency within the Utility; and
iv. Recommend specific water, sewer, and recycled water rate structures that equitably recover the cost of service, enhance revenue stability and conforms with industry practices and legal requirements.
E.2 SCOPE OF WORK
The following phases were used to conduct this Study:
Perform a Revenue Sufficiency Analysis (RSA) – Develop and populate a multi-year forecasting model for each of the City’s water, sewer, and recycled water funds that was used to determine the level of annual revenue required to satisfy projected annual operating costs, debt service expenses, and capital cost requirements as well as maintain and develop adequate reserves.
Cost-of-Service Allocation (COSA) Analysis – Using the revenue requirements from the revenue sufficiency analysis for Fiscal Year (FY) ending 2025, we performed a detailed COSA analysis based upon principles outlined by the American Water Works Association (AWWA) and other generally accepted industry practices in order to allocate the cost of providing service to the components of the rate structure.
Rate Structure Analysis – The rate structure analysis phase developed specific rates that would recover the identified level of required revenue for each service. The recommended rates schedules were designed to conform with accepted industry practices and reflect the appropriate distribution of system costs, while achieving the City’s policy objectives.
Executive Summary
City of Norco | Water and Sewer Rate Study Final Report Stantec | 2 Recycled Water Rate Analysis – Evaluation of the cost of providing recycled water service to determine an appropriate recycled water rate necessary to fund the operations and capital needs of the City’s recycled water system.
Benchmarking and Customer Impacts – Benchmark the City’s water and sewer rates with comparable and local utilities. Demonstrate the impacts of any recommended changes to rates on customers of the systems in the form of customer bill impact comparisons.
E.3 BACKGROUND
The City’s last rate study was completed in 2016 and provided recommendations for adjustments to both water and sewer rates over a five-year period (FY 2017 to FY 2021). The rate plan was adopted by the City Council. While the water rates were increased as adopted, the City elected to not implement the approved increases for sewer rates given the performance of the sewer fund. As a result, sewer rates have not been increased for over a decade and water rates have remained constant over the past four years (last adjustment was for FY 2021). The primary driver for the previously approved water rate adjustments was to begin funding a long list of essential capital improvement projects related to the City’s aging water system. Since the last rate study, the City has been able to invest over $12 million in water mainlines replacing over six and a half (6.5) miles of mainlines. Additionally, investments were made in groundwater treatment, reservoirs and booster stations totaling approximately $14.5 million. While the previous water rate adjustments have allowed the City to address about $26.5 million in critical capital investments in the water system, the City has nearly $36 million in additional projects still lacking sufficient funding. The investments in the sewer system have been more measured by comparison with total investment since the last rate study of approximately $4 million in projects to replace aging sewer lift stations. However, the City does have an additional $4 million in construction projects occurring now to replace 4 additional sewer lift stations with $11 million in projects yet to be funded.
While the City has made significant progress with reinvesting in the utility systems, particularly the water system, significant increases in operational costs have placed significant pressure on the utility systems.
The majority of the input costs associated with managing, operating and maintaining the utility systems have increased substantially due to inflationary increases and supply chain issues related to Covid-19.
Given the cost pressures, the lack of rate adjustments and the need to continue to address critical capital investments, the City engaged Stantec Consulting to complete this comprehensive rate study.
E.4 REVENUE SUFFICIENCY ANALYSIS AND FINANCIAL PLAN
Given this backdrop, the Revenue Sufficiency Analysis (RSA) evaluated the sufficiency of the Utility’s revenues to meet all of its current and projected financial requirements over a ten-year projection period and determined the level of any rate revenue increases necessary in each year of the projection period to provide sufficient revenues to fund all of its cost requirements. The ten-year forecast provides a long-term outlook for the water and sewer systems, however, the study focused on the next five years (FY 2026 through FY 2030) in order to allow for the development of a five-year financial management plan inclusive
Executive Summary
City of Norco | Water and Sewer Rate Study Final Report Stantec | 3 of a recommended five-year plan of rate adjustments. Working with City staff, we thoroughly discussed the base data and assumptions of the analysis, and reviewed several alternative funding scenarios for the water and sewer funds. Through this process, we identified the recommended financial management plan presented herein to address the current and projected cost requirements of the Utility.
Water Fund Summary
Over the past several years the City has experienced a decline in water sales (approximately 18% since FY21). Given that metered water sales make up roughly 50% of the revenues within the water fund, these reductions in use are having a sizable impact on the water fund. At the same time, operating and maintenance costs have increased substantially due to inflationary increases. As a result, should the City maintain a “status quo” approach and not increase water rates going forward, the water fund will not be able to meet its’ financial obligations. Specifically, the financial modeling demonstrates that if the City only funds the operating and maintenance costs of the system (not addressing any capital needs), the water fund would exhaust all cash balances over the next four years, essentially resulting in a negative cash balance. If additional revenues are not generated within the water system, the City will be at risk of defaulting on debt covenants, jeopardize its ability to purchase water and execute critical infrastructure repair projects.
Sewer Fund Summary
The sewer system is currently generating revenues sufficient to fund the operations of the system.
However, current revenues are not sufficient to address capital infrastructure needs. Over the next five years additional revenue will be required to address the increasing cost of providing sewer service, including purchased wastewater treatment services and to provide funds for repair and replacement of the sewer system.
The recommended financial management plan and five-year corresponding plan of water and sewer rate revenue adjustments are based upon the revenue and expense information, beginning balances, and assumptions as described in the full report. The specific five-year rate revenue adjustment plan recommended herein is presented in the following table.
Table E-1: Recommended Plan of Water & Sewer Rate Revenue Increases FY2026 FY2027 FY2028 FY2029 FY2030
Effective Date: 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Water Rate Revenue Increases 9.0% 9.0% 8.0% 6.0% 6.0%
Sewer Rate Revenue Increases 5.0% 5.0% 4.0% 4.0% 4.0%
E.5 COST OF SERVICE ALLOCATION
A COSA analysis was completed for the study to identify the cost of providing water service including fixed, variable and system peaking costs. The Study employed the “base-extra capacity” cost-of-service method promulgated in AWWA’s Manual M1: Principles of Water Rates, Fees, and Charges (M1) for the water
Executive Summary
City of Norco | Water and Sewer Rate Study Final Report Stantec | 4 system, whereby costs are first allocated to individual functions or activities then the costs of each function are distributed to appropriate system parameters to allow for allocation to specific components of the rate structure. The COSA analysis was completed only for the water system since the City’s current sewer rate structure has been assumed to be functioning appropriately given the solid level of fixed cost recovery and the lack of desire to modify the existing sewer rate structure.
E.6 RATE STRUCTURE ANALYSIS
Upon completion of the COSA analysis, a rate structure analysis was performed to identify potential rate structure modifications and specific rate schedules for implementation in FY 2026 that would:
i. Fairly and equitably recover each fund’s current cost of providing service and meet revenue requirements;
ii. Conform to accepted industry practice and legal requirements; iii. Provide fiscal stability and recovery of fixed costs of the system; and iv. Maintain affordability to low volume and average users to the extent possible.
Water Rates
The City’s current water rate structure consists of a fixed monthly charge and a variable usage charge based on metered water usage. The fixed monthly charge portion of the water rate structure currently generates 48.8% of the water system rate revenues and the remaining 51.2% is generated from the usage charge. The percentage of the revenue generated from the fixed charge is generally consistent with the COSA analysis completed as part of the Study and therefore the current water rate structure is appropriate.
However, it is recommended that the fixed charges revenues be aligned with the cost of service which would bring the revenue generated from the fixed charges up to 49.6% of revenues.
In addition to the standard water rates, the Study reviewed the current private fire protection charges assessed by the City. The cost of providing this service was determined as part of the COSA analysis and recommended private fire protection charges have been calculated.
The recommended water rates summarized in the following tables are intended for implementation on July 1, 2025 and each subsequent fiscal years. The water annual rate revenue adjustments recommended by the RSA portion of this study and presented in Table E-1 along with results from the cost of service analysis are reflected in the recommended rates shown in Tables E-2 and E-3. It should be noted that the first year of the rates (FY2026) reflect the modifications resulting from the cost of service and therefore all rates and charges do not increase at the same percentage increase in the first year (fixed charges increase slightly more than usage rates to reflect the cost of service).
Executive Summary
City of Norco | Water and Sewer Rate Study Final Report Stantec | 5 Table E-2: Recommended Water Rates
Current FY2026 FY2027 FY2028 FY2029 FY2030
Fixed Charge
3/4" $47.80 $52.60 $57.34 $61.93 $65.65 $69.59
1" $71.01 $77.48 $84.45 $91.21 $96.68 $102.48
1 1/2" $165.95 $179.25 $195.38 $211.01 $223.67 $237.09
2" $213.47 $230.18 $250.90 $270.97 $287.23 $304.46
3" $559.23 $600.79 $654.86 $707.25 $749.69 $794.67
4" $996.81 $1,069.82 $1,166.10 $1,259.39 $1,334.95 $1,415.05 6" $2,371.04 $2,542.82 $2,771.67 $2,993.40 $3,173.00 $3,363.38 8” $3,804.31 $4,079.10 $4,446.22 $4,801.92 $5,090.04 $5,395.44 10” $6,018.68 $6,452.62 $7,033.36 $7,596.03 $8,051.79 $8,534.90 12” $9,893.75 $10,606.21 $11,560.77 $12,485.63 $13,234.77 $14,028.86 Usage Charge
Rate (per HCF) $2.70 $2.92 $3.18 $3.43 $3.64 $3.86
Table E-3: Recommended Fire Protection Charges
Current FY2026 FY2027 FY2028 FY2029 FY2030
Fixed Charge
2" $50.88 $53.80 $58.65 $63.34 $67.14 $71.17
3" $52.83 $56.10 $61.14 $66.04 $70.00 $74.20
4" $56.20 $60.05 $65.45 $70.69 $74.93 $79.43
6" $68.30 $74.23 $80.91 $87.39 $92.63 $98.19
8” $89.16 $98.70 $107.58 $116.19 $123.16 $130.55
10” $120.54 $135.50 $147.70 $159.51 $169.08 $179.23
12” $164.03 $186.51 $203.29 $219.55 $232.73 $246.69
Usage Charge
Rate (per HCF) $5.40 $5.71 $6.23 $6.72 $7.13 $7.55
Sewer Rates
The current sewer rate structure was reviewed and deemed appropriate given the services provided by the City. The current sewer fixed monthly charge generates approximately 60% of the sewer system revenues providing revenue stability and a relatively high level of fixed cost recovery. The recommended sewer rates summarized in Table E-4 are intended for implementation on July 1, 2025 and each subsequent fiscal year.
The adjustment reflect the recommended plan of sewer rate revenue increases outlined in Table E-1.
Executive Summary
City of Norco | Water and Sewer Rate Study Final Report Stantec | 6 Table E-4: Recommended Sewer Rates
Current FY2026 FY2027 FY2028 FY2029 FY2030
Monthly Fixed Charge $51.00 $53.55 $56.23 $58.48 $60.82 $63.25 Sewer Usage Charge
Rate (per HCF) $8.00 $8.40 $8.82 $9.17 $9.54 $9.92
Monthly Non-Connect Fee(1) $19.00 $19.00 $19.00 $19.00 $19.00 $19.00 (1) The monthly non-connect fee is not being adjusted at this time.
E.7 RECYCLED WATER RATES
The City does not currently provide recycled water within the City. A cost-of-service analysis was completed for the City’s existing and future recycled water infrastructure and operations to determine the appropriate pricing for recycled water service once the City is able to provide the service.
The preliminary rates identified herein are set to cover the estimated annual cost of providing recycled water service. Table E-5 presents the recycled water rates assuming the City has an initial demand of 350 acrefeet per year. The table demonstrates the usage charge required to fund operating costs and capital costs and incorporates a fixed monthly charge that would cover 5% of the annual capital costs.
Table E-5: Recommended Recycled Water Rates
Year 1 Year 2 Year 3 Year 4 Year 5
Fixed Charge
3/4" $23.82 $49.40 $50.38 $51.34 $51.79
1" $37.79 $78.40 $79.96 $81.47 $82.18
1 1/2" $94.97 $197.03 $200.93 $204.73 $206.53
2" $123.59 $256.40 $261.47 $266.42 $268.76
3" $331.84 $688.39 $702.03 $715.32 $721.60
4" $595.38 $1,235.11 $1,259.57 $1,283.42 $1,294.69
6" $1,423.04 $2,952.09 $3,010.55 $3,067.56 $3,094.49
8” $2,286.25 $4,742.84 $4,836.76 $4,928.35 $4,971.62
10” $3,619.91 $7,509.51 $7,658.21 $7,803.23 $7,871.74
12” $5,953.76 $12,351.08 $12,595.66 $12,834.18 $12,946.87 Recycled Water Usage Charge
Total Rate (per HCF) $2.21 $3.22 $3.22 $3.23 $3.23
1. Introduction
City of Norco | Water and Sewer Rate Study Final Report Stantec | 7
1. INTRODUCTION
Stantec has conducted a Comprehensive Water, Sewer, and Recycled Water Rate Study (Study) for the water, sewer and recycled water systems operated and maintained by the City of Norco. This report presents the objectives, approach, methodologies, source data, assumptions, as well as the findings, conclusions and recommendations of the Study.
1.1 BACKGROUND
The City’s Public Works Department is responsible for constructing, improving, and otherwise maintaining the water and sewer systems within the City of Norco. The cost of operating and maintaining the water and sewer systems is fully funded by the rates, fees and charges collected by the City from users of the systems.
The City accounts for the cost of operating the water and sewer systems in separate Water and Sewer Enterprise Funds. The City recently established a Recycled Water Fund to account for the future operations of the recycled water system. A description of the recycled water system is discussed below.
1.1.1 Water System
The City’s water system currently serves a population of approximately 27,000 through 7,500 service connections covering a 14 square mile area. In calendar year 2024, the water system produced about 5,600,000 gallons a day or 6,246 acre-feet of water overall for the year. The City obtains its water supply from a combination of multiple sources, including three (3) groundwater wells: Wells 12, 13, and 15 and seven (7) interties with adjacent water systems (City of Riverside, City of Corona, Chino Basin Desalter Authority’s Chino II Desalter system, Jurupa Community Services District, and Western Municipal Water District’s Arlington Desalter system). The City’s water distribution system consists of five pressure zones served by 100 miles of water mainlines, nine (9) water storage reservoirs and four (4) booster stations. The City also operates the Bluff St. Groundwater Treatment Plant that removes iron, manganese, and arsenic from two wells (Wells 13 and 15).
1.1.2 Wastewater System
The City’s sewer system currently serves a population of approximately 27,000 through 6,800 service connections covering a 14 square mile area. The City’s sewer collection system consists of about 110 miles of mainlines and twelve (12) sewer lift stations. The City is also a member of a joint powers authority with four other agencies (City of Corona, Home Gardens Sanitation District, Jurupa Community Services District, and Western Municipal Water District) that owns a 14 million gallon per day wastewater treatment facility that is operated and maintained by the Western Riverside County Regional Wastewater Authority (WRCRWA). The City has maximum treatment allowance of 2,700,000 gallons a day but discharges about 1,800,000 gallons a day to the WRCRWA treatment plant.
1. Introduction
City of Norco | Water and Sewer Rate Study Final Report Stantec | 8
1.1.3 Recycled Water System
The City does not currently deliver recycled water to properties located within the City. However, the City does maintain infrastructure that will allow for the delivery of recycled water in the future. The existing recycled water infrastructure includes approximately six (6) miles of recycled water distribution lines. The City anticipates being able to provide recycled water over the coming years following the completion of joint projects including a joint booster pump station and pipeline that will deliver recycled water from the WRCRWA wastewater treatment facility to the City.
1.1.4 Rate History
The City has historically engaged outside consultants to complete rate studies for the water and sewer enterprise funds. The City’s last rate study was completed in 2016 and provided recommendations for adjustments to both water and sewer rates over a five-year period (FY 2017 to FY 2021). The rate plan was adopted by the City Council. While the water rates were increased as adopted, the City elected to not increase sewer rates annually as originally approved given the performance of the sewer fund. As a result, sewer rates have not been increased for over a decade and water rates have remained constant over the past four years. The primary driver for the water rate adjustments was to facilitate the completion of essential capital improvement projects within the City’s aging water system. Since the last rate study, the City has been able to invest over $12 million in water lines replacing over six and a half (6.5) miles of lines.
Additionally, investments were made in groundwater treatment, reservoirs and booster stations totaling approximately $14.5 million. In total the water rate adjustments have allowed the City to address about $26.5 million in necessary capital investments in the water system, but the City has nearly $36 million in additional projects still lacking sufficient funding. The investments in the sewer system have been lessor by comparison with total investment since the last rate study of approximately $4 million in projects to replace aging sewer lift stations. However, the City does have an additional $4 million in construction projects occurring now to replace 4 additional sewer lift stations with $11 million in projects yet to be funded.
While the City has made significant progress with reinvesting in the utility systems, particularly the water system, increases in operational costs have placed significant pressure on the utility systems. The majority of the input costs associated with managing, operating and maintaining the utility systems have increased substantially due to inflationary increases and supply chain issues related to Covid-19. While the City has held water and sewer flat over the past four years, most consumer goods have increased due to these inflationary pressures. To provide some perspective on the cost of typical consumer goods over the past four years, data was pulled from the U.S. Census Bureau and the St. Louis Federal Reserve. Figure 1-1 presents the cost per gallon of typical consumer goods in 2021 and current cost for 2025 along with level of inflation.
1. Introduction
City of Norco | Water and Sewer Rate Study Final Report Stantec | 9 Figure 1-1 Price Comparison (Cost per Gallon) 2025 vs. 2021 Figure 1-1 demonstrates the significant increases in most consumer goods on a per gallon basis over the past four years. It also shows the fact that the City’s water on a per gallon basis is substantially less than most consumer goods and has remained constant over this period.
Given the financial pressures on the City’s utilities and the need to continue to reinvest in the system assets to ensure long-term sustainable operations, the City has engaged Stantec Consulting Services to complete a comprehensive rate study which outlined within this Report.
1.2 OBJECTIVES
The primary objectives of this Study is to:
i. Develop a multi-year financial management plan for each fund that identifies future rate adjustments to water and sewer rates that will ensure adequate revenues to meet the ongoing financial requirements of each fund;
ii. Integrate the capital funding needs per the City’s adopted Capital Improvements Plan for the Utility including evaluation of appropriate funding levels and sources of funds; iii. Identify appropriate cash reserve levels for each fund to provide financial stability and resiliency within the Utility; and
1. Introduction
City of Norco | Water and Sewer Rate Study Final Report Stantec | 10 iv. Recommend specific water and sewer rate structures that equitably recover the cost of service, increase revenue stability and conforms with industry practices and legal requirements.
1.3 GENERAL METHODOLOGY
This section presents our methodology used to conduct the Study. To begin the Study, we first evaluated multiple financial management planning scenarios for each fund that determined the level of annual revenue required to satisfy projected annual operating, debt service (including coverage), and capital cost requirements as well as maintain adequate reserves. This portion of the Study was conducted using the revenue sufficiency and financial planning module of our Financial Analysis and Management System (FAMS) modeling system. We customized two separate versions of our module to reflect the financial dynamics and most current data available for the water and sewer funds, respectively, in order to develop the long-term financial management plan scenarios, inclusive of projected annual revenue requirements and corresponding annual rate adjustments, for each respective fund. The financial management plans were reviewed with City staff and a recommended multi-year financial management plan was developed for each fund.
Using the cost of providing service and net revenue requirements from the revenue sufficiency analysis for Fiscal Year (FY) ending 2025, we then performed a detailed cost-of-service allocation (COSA) analysis based upon principles as outlined by the American Water Works Association (AWWA) and other generally accepted industry practices in order to determine the various components of providing water service including billing, customer service, average day (base capacity) and system peaking costs.
Once all FY 2025 costs and revenue requirements were allocated to the system cost components, we then developed specific rates that would recover the identified costs. The recommended rate schedules presented herein are designed to conform with accepted industry practice and reflect the appropriate distribution of system costs, while achieving the City’s policy objectives, such as fiscal stability and resiliency, to the greatest extent possible. Using this approach, we were able to clearly identify and review the impacts of the results of the rate structure presented herein for the City’s customer base.
As part of the Study, we also examined the anticipated cost of providing recycled water within the City. This analysis was completed by examining the estimated operational and capital costs associated with the City beginning to convey recycled water to select customers within the City. A set of preliminary recycled water rates were developed based on these costs and estimated demands for recycled water within the City.
1.4 ACROYNMS
AWWA American Water Works Association
CIP capital improvement plan
COSA cost-of-service allocation
FAMS Financial Analysis and Management System model
FTE full time equivalent (employee)
FY fiscal year ending June 30
1. Introduction
City of Norco | Water and Sewer Rate Study Final Report Stantec | 11 GPCD gallons per capita per day
HCF hundred cubic feet
TGAL thousands of gallons
TGPD thousands of gallons per day
MGD millions of gallons per day
O&M operation and maintenance
RSA revenue sufficiency analysis
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 12
2. REVENUE SUFFICIENCY ANALYSIS
This section presents the financial management plan scenarios and corresponding plan of water and sewer rate adjustments developed in the revenue sufficiency analysis (RSA) that was conducted as part of the Study. This section also presents a description of the source data, assumptions, and policies reflected in the RSA, as well as the results of the RSA. The Appendix to this Report includes detailed schedules supporting the financial management plan identified herein for each respective fund.
During the RSA we reviewed alternative multi-year financial management planning scenarios and corresponding water, sewer, and recycled water rate revenue adjustment plans through several interactive work sessions with City staff. As an outcome to this process, the Study has produced a recommended financial management plan and corresponding plan of annual rate revenue adjustments that will allow each fund to meet its respective revenue requirements and financial performance objectives throughout the projection period.
2.1 DATA & ASSUMPTIONS
The City provided historical and budgeted financial information regarding the operation of the water and sewer utilities, including each fund’s adopted multi-year capital improvement programs (CIP) and current debt service obligations and covenants. City staff also assisted in providing other assumptions and policies, such as demands and customer growth, debt coverage levels, levels of operating reserves, earnings on invested funds, and escalation rates for operating costs. The following presents the key source data relied upon in conducting the RSA.
2.1.1 Beginning Fund Balances
The ending balances for FY 2024 was used to establish the beginning FY 2025 balances for both the Water Fund and the Sewer Fund1. The basis of the FY 2025 beginning balances used in the RSA are provided in Schedule 1-W (for water) and Schedule 1-S (for sewer) of the Appendix. The City maintains a separate revenue fund and a capital fund within both the water and sewer funds and a rate stabilization fund within the water fund. As of the end of FY 2024, the revenue fund for the water system has a balance of $4.5 million, a balance of nearly $4.8 million in the capital fund which is designated for capital projects and approximately $1.6 million in the rate stabilization fund. As of the end of FY 24, the sewer fund maintained approximately $1 million in its revenue fund and $12.2 million in the sewer capital fund. It should be noted that during FY 2024, the City transferred $3.2 million from the sewer revenue fund, to a newly created recycled water fund to provide necessary funding for establishment of the recycled water system. The City also adopted a resolution which requires that the recycled water fund begin making payments back to the 1 File source: TrialBalanceListing_24.xlsx
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 13 sewer fund within two years of operation of the recycled water system. These payments will extend over a 25-year period at a 2% interest rate.
2.1.2 Growth
Based on a review of recent historical trends and discussions with City staff, the RSA assumes a customer growth rate of 0.25% (approximately 25 new connections per year) over the projection period for the water system. The projected growth in the sewer system is slightly lower at 0.20%. The City has experienced a reduction in metered water usage over the past three years, due to conservation efforts and potentially resulting from aging water meters within the City showing signs of reduced accuracy in measuring water usage. Water usage has decreased 18 percent since FY 2021. Based on our experience, it is unlikely that the City will experience a return to historical usage levels. Once customers make adjustments to water usage patterns, the usage levels typically become ingrained within the community. Given these trends and continued conservation efforts, the RSA assumes a reduction in usage per account of 0.25% for existing customers in the future years of the projection period. The only growth in usage in future years would be a result of additional customers within the systems.
2.1.3 Revenues
The water and sewer revenues utilized in the RSA reflect an evaluation of multiple years of historical results from FY 2020 through FY 2024, FY 2025 Budget amounts, and historical billing information. Water and sewer revenues consist of rate revenue, interest income and other small miscellaneous charges. Rate revenue for each fund is based upon FY 2024 billing statistics and the recommended rate structure presented herein, adjusted to reflect changes in revenue based upon assumed customer growth.
Projections of all other revenues were based upon the FY 2025 Budget, excluding interest income (which was calculated annually based upon projected average fund balances and assumed interest rates). The FY 2025 estimated rate revenue, as well as forecasts for all other non-rate revenues are provided in Schedule 2-W (for water) and Schedule 2-S (for sewer) in the Appendix.
2.1.4 Operating Expenses & Existing Debt
The water and sewer utilities’ operating expenses include all operating and maintenance expenses, water purchases, wastewater treatment services, transfers, debt service requirements, and minor capital outlay.
Over the past several years, the City has experienced substantial increases in the costs associated with operating and maintaining the water and sewer systems. These increases have resulted from inflation in many of the input costs associated with the City’s utilities, including chemicals, energy and materials. These increases are placing significant pressure on the City’s water and sewer funds and are heightened by the lack of rate increases over the past several years during this inflationary period.
The increased costs are reflected in the City’s FY 2025 Budget and while likely not to continue to grow at the levels experience over the past few years, costs are not likely to return to pre-inflationary levels. As a result, future operating expenses were projected based upon the individual expense categories and expense amounts in the FY 2025 Budget, adjusted per discussions with City staff to reflect known and
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 14 measurable changes, as well as expected inflation (see Section 2.1.5). The Water Fund and Sewer Fund both have existing bonds (the 2019 Bonds) that are payable during the projection period. The remaining annual debt service expenses for outstanding bonds were included in the RSA and are identified in Schedule 3-W (for water) and Schedule 3-S (for sewer) of the Appendix.
2.1.5 Cost Escalation
Annual cost escalation factors for the various types of operating and maintenance expenses were developed based upon a review of historical trends, our industry experience, and detailed discussions with City staff. As mentioned above, costs are not anticipated to increase at the same level as the past several years but will continue to escalate. The specific escalation factors assumed for the various categories of expenses are provided in Schedule 4-W (for water) and Schedule 4-S (for sewer) of the Appendix.
2.1.6 Capital Improvement Program
City staff provided the adopted five-year Capital Improvement Program for the water and sewer system for FY 2025 through FY 2029, reflecting the capital improvement needs identified for each respective fund.
While the City has made significant investments in the water system since the last rate study, a substantial amount of work remains to address aging infrastructure and to provide long-term sustainability within the water system. The majority of the water projects included in the CIP address eight (8) water mainline replacements. These projects will assist with replacing portions of the aging water distribution system and will help to reduce the amount of water lost in the system. Over the past eight years, these 8 planned water mainline replacement projects have a combined 188 incidents of repairs due to main breaks (38), mainline leaks (69) and service leaks (81).
In addition to continued investments in the water system, the City will need to ramp up capital spending for the sewer system given the requirements to address aging infrastructure. In total, the CIP from FY 2025 – FY 2029 is approximately $36.4 million for the water fund and is $21.4 million for the sewer fund. A detailed list of projects and costs by year per the City’s adopted CIP are provided in Schedule 5-W (for water) and Schedule 5-S (for sewer) in the Appendix. A summary by project type is shown in the following tables.
Note that the tables include estimates for FY 2030 to provide a five-year projection period beyond the current fiscal year.
Table 2-1: Water Capital Improvement Program ($ Millions) Project Category FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 Mainline Replacement $4.33 $6.08 $5.73 $5.90 $4.40 -
Hydrant and Valve Replacement $0.10 $0.10 $0.10 $0.10 $0.10 $0.10 Meter Replacement - - $1.60 $1.60 $1.60 -
PFAs Treatment $0.90 $2.20 $1.30 $0.00 - -
Additional Capital $0.30 - - - - $4.00
Total $5.63 $8.38 $8.73 $7.60 $6.10 $4.10
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 15 Table 2-2: Sewer Capital Improvement Program ($ Millions) Project Category FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 Lift Station Replacement $4.80 $3.90 $1.70 $0.20 $1.70 - Mainline Replacement $1.50 - - - - -
WRCRWA Capital Improvements $1.55 $1.50 $1.50 $1.50 $1.50 $1.50 Total $7.85 $5.40 $3.20 $1.70 $3.20 $1.50
Based on the planned CIP, the City will be investing an average of approximately $7.3 million per year in the water system and $4.3 million per year in the sewer system. The average level of investment completed in the water system is relatively consistent with the past several years, but the average sewer capital investments are substantially higher than prior years, since FY2016 the total capital investment completed in the sewer system has been approximately $4 million. For the current fiscal year, the City has an additional $4 million in sewer projects currently in design or construction.
2.1.7 Interest Earnings on Invested Funds
The RSA reflects interest earnings on invested funds at a rate of 4.5% per year in FY 2025, 4.0% in FY 2026, 3.5% in FY 2027 and 3.0% each year thereafter.
2.1.8 Minimum Operating Reserve Balance
Reserve balances for utility systems are funds set aside for a specific cash flow requirement, financial need, project, task, or legal covenant. The rationale related to the maintenance of minimum reserves is two-fold.
First, it helps to assure that the utility will have adequate funds available to meet its financial obligations during the year, serving as a working capital reserve. Second, it provides funds that can be used for minor emergency repairs or replacements to the system that can occur as a result unanticipated system failures.
The City of Norco’ policy requires that that its’ utility funds maintain a minimum operating fund balance of three (3) months of annual O&M expenses within each fund. The City maintains these funds within the water and the sewer revenue funds. The financial management plans included herein were developed to ensure that the water and sewer fund operating reserves do not fall below the 3 months of annual O&M policy.
2.1.9 Rate Stabilization Reserve
In addition to operating reserves, it is fairly common for utilities to maintain rate stabilization reserves that provide funds for unexpected reductions in revenues or unplanned expenditures. The City established a rate stabilization reserve for the water system to help address issues like unforeseen reductions in revenues or unexpected expenditures. The City has been working to build up the rate stabilization reserve to a target of $2 million by FY 2026. The City should be able to hit this target within the planned timeframe. The target balance was developed based on analysis of the potential reductions in revenues from future conservation
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 16 efforts. A rate stabilization reserve has not been established for the sewer fund due to the stability within the fund as result of the current sewer rate structure.
2.1.10 Future Borrowing Assumptions
As part of the development of the financial management plan scenarios, various approaches to funding the CIP were examined. One of the funding scenarios assumed the issuance of new debt to fund a portion of the City’s adopted CIP.
Based upon discussions with City staff, any new debt anticipated to be issued during the projection period would be secured through the California Drinking Water State Revolving Fund (SRF). Based on the typical loan terms for the SRF, it was assumed that the terms of the loan would be consistent with the following:
30-year term, level debt service
2.0% cost of issuance
Interest rate on debt: 2.0%
2.1.11 Debt Service and Coverage
The Utility must maintain the following minimum debt service coverage requirements:
Net revenue (gross revenue minus operating expenses) that is at least 1.10 times greater than the annual debt service requirement (i.e. the annual principal and interest payments) on its outstanding senior-lien debt.
This coverage requirement is a minimum requirement. To the extent the Utility is unable to meet this requirement, it could be found in technical default resulting in the Utility having its credit rating downgraded, which would affect the interest rate and terms of future financing initiatives. As a policy decision, utilities often measure revenue sufficiency and set rates based upon a higher coverage level so as to ensure compliance with these covenants in the event future projections of revenue and expenses do not occur as predicted. To ensure the Utility maintains its current rating, the financial management plans presented in this report were designed to achieve minimum target debt service coverage of at least 1.25 times net revenue with a target of 1.50. Per published guidance from Fitch Ratings, the municipal utility ratings agency, utility systems with Midrange financial profiles maintain debt service coverage greater than 1.50 times net revenue and those with Stronger financial profiles maintain debt coverage greater than 2.00 times net revenue.
2.1.12 Summary of Assumptions
A summary of annual assumptions regarding growth rates, interest earnings, operating budget execution percentages and reserve targets are provided in Schedule 6-W (for water) and Schedule 6-S (for sewer) in the Appendix.
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 17
2.2 FINANCIAL PLANNING ANALYSIS
All of the above information was entered into two separate versions (one for each fund) of the financial module of our (FAMS) interactive modeling system. This module of FAMS produced a ten-year projection of the sufficiency of each fund’s revenues to meet all current and projected financial requirements, and determined the level of rate revenue increases necessary in each year of the projection period to provide sufficient revenues for each fund’s cost requirements.
The revenue sufficiency and financial planning module of FAMS utilizes all projected available funds in each year of the projection period to pay for capital projects. The model is set up to reflect the rules of cash application as defined and applied by City staff, and it produces a detailed summary of the funding sources to be used for each project in the CIP.
2.3 FINANCIAL PLANNING SCENARIOS
Based upon the data, assumptions, and policies presented herein, the City’s current water and sewer rates will not provide sufficient revenue to meet each fund’s respective revenue requirements over the five and ten-year projection period. The results for each fund and the planning scenarios are discussed below.
2.3.1 Water Fund
Over the past several years the City has experienced a decline in water sales (approximately 18% since FY21). Given that metered water sales make up roughly 50% of the revenues within the water fund, these reductions in use are having a sizable impact on the water fund. At the same time, operating and maintenance costs have increased substantially due to inflationary increases. As a result, should the City maintain a “status quo” approach and not increase water rates going forward, the water fund will not be able to meet its’ financial obligations. Specifically, the financial modeling demonstrates that if the City only funds the operating and maintenance costs, excluding any future capital improvements, the annual shortfalls in revenues compared to expenses will result in the operating fund balance dropping below the three-month minimum target by FY 2029 and will result in all cash in the revenue fund being depleted by FY 2030. Should the City use the cash within the rate stabilization reserve, the cash balance would only last another year (balances going negative by FY 2031). The financial modeling demonstrates that current water revenue will not be sufficient to meet the basic operations of the water system let alone address the capital improvements that have been identified for the system.
To address the revenue shortfalls in the water fund, multiple financial planning scenarios were developed and reviewed with City staff. All of the scenarios evaluated assumed that the City would increase revenues necessary to meet the annual operating and maintenance, debt service and reserve requirements to ensure that the water fund remains financially viable. The primary variable considered in the development of the scenarios included the funding of the City’s adopted CIP, specifically the execution level of the CIP and the funding source. The specific scenarios that were evaluated include the following:
• Scenario 1: Full execution of the City’s adopted CIP without the issuance of debt
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 18 • Scenario 2: Full execution of the City’s five-year CIP with the issuance of debt in FY 2026 and 2028 to fund a portion of the water CIP
• Scenario 3: Extension of the five-year CIP beyond the next five years to reduce the annual investment required with the issuance of debt in FY2026, FY2028, FY2030 and FY2033 Each of the scenarios was evaluated to determine the required adjustments to water rates to meet the funding requirements of the fund (maintaining a minimum cash balance within the operating fund and a debt service coverage of 1.25). A summary of the results of the financial planning scenarios for the water fund are shown in Table 2-3.
Table 2-3: Water Fund Financial Planning Scenarios
FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 Total
Annual Capital Funded (millions)
Scenario 1 $5.63 $8.38 $8.73 $7.60 $6.10 $4.10 $40.53
Scenario 2(1) $5.63 $8.38 $8.73 $7.60 $6.10 $4.10 $40.53 Scenario 3(2) $3.43 $6.38 $5.18 $5.85 $4.95 $5.60 $31.38 Rate Increases
Scenario 1 - 65.0% 3.0% 3.0% 0.0% 0.0% 71.0%
Scenario 2 - 17.0% 10.0% 6.0% 6.0% 4.0% 43.0%
Scenario 3 - 9.0% 9.0% 8.0% 6.0% 6.0% 38.0%
Customer Bill (Average Residential Customer)(3)(4)
Scenario 1 $101.80 $168.05 $173.09 $178.29 $178.29 $178.29 Scenario 2 $101.80 $119.16 $131.08 $138.95 $147.28 $153.17 Scenario 3 $101.80 $111.02 $121.01 $130.69 $138.53 $146.84 (1) Assumes loan totaling $21.3 million over five-year period (2) Assumes loans totaling $21.3 million over ten-year period (3) Average residential customer using 20 HCF per month with ¾” meter (4) Bills reflect increases applied to the City’s current water rate structure As demonstrated in the table, Scenario 1 (the full execution of the water system CIP without the issuance of debt) would require significant increases in water rates in FY2026. The level of the rate increases in Scenario 1 would likely cause rate shock within the City. Scenarios 2 and 3 provide lesser increases resulting from the use of long-term financing to fund a portion of the projects. Given that the investments in the water system will have long useful lives it would be appropriate to fund the projects using debt as it matches the life of the asset with the funding of the asset. Scenario 3 results in the lowest water rate increases but forces the City to push approximately $9.15M of the City’s to current five-year CIP, beyond the next five years.
2.3.2 Sewer Fund
The financial pressures on the sewer system are not as pronounced as the water system. While sewer rates have not been increased for over a decade, the existing rates are forecasted to be sufficient to be
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 19 able to fund the operating and maintenance cost of the sewer system over the project period. However, the sewer rates are not sufficient to fund the necessary capital investments. Under the “status quo” scenario with no adjustments to sewer rates and the planned capital projects, the cash balance within the sewer operating fund would fall below the minimum target in FY 2027 and would be completed exhausted by FY 2028. Therefore, funds are currently not available for the completion of the capital improvement projects.
To address the revenue shortfalls in the sewer fund, multiple financial planning scenarios were developed and reviewed with City staff. All of the scenarios evaluated assumed that the City would increase revenues necessary to meet the annual operating and maintenance, debt service and reserve requirements to ensure that the sewer fund remains financially viable. The primary variable considered in the development of the scenarios included the funding of the City’s adopted CIP, specifically the execution level of the CIP. The specific scenarios that were evaluated include the following:
• Scenario 1: Full execution of the City’s adopted CIP
• Scenario 2: Extension of the City’s five-year CIP beyond the next five years to reduce the annual investment in the sewer by complete projects over a ten-year period.
The financial planning scenarios are summarized below.
Table 2-4: Sewer Fund Financial Planning Scenarios
FY2025 FY2026 FY2027 FY2028 FY2029 FY2030 Total
Annual Capital Funded (millions)
Scenario 1 $7.85 $5.40 $3.20 $1.70 $3.20 $2.50 $23.85
Scenario 2 $6.35 $3.00 $3.35 $3.55 $3.40 $3.20 $22.85
Rate Increases
Scenario 1 - 6.0% 6.0% 5.0% 3.0% 3.0% 23.0%
Scenario 2 - 5.0% 5.0% 4.0% 4.0% 4.0% 22.0%
Customer Bill (Average Residential Customer)(1)
Scenario 1 $51.00 $54.06 $57.30 $60.17 $61.98 $63.84
Scenario 2 $51.00 $53.55 $56.23 $58.48 $60.82 $63.25
(1) Single family customers pay a fixed monthly usage charge regardless of metered water use Table 2-4 demonstrates the necessary level of rate increases for each scenario. The differences between the scenarios are limited given the fact that the sewer capital projects are less flexible in terms of extending them into the future. The revenue increases in the sewer fund are less substantial than the water fund because of the current health of the sewer fund and the magnitude of the sewer CIP.
2.3.3 Recommended Rate Increases
The results of the financial planning scenarios for the water and sewer funds were reviewed with the City staff during an interactive work session. Based on the review, it was determined that the most appropriate approach for the City would be to move forward with Scenario 3 for the water fund and Scenario 2 for the
2. Revenue Sufficiency Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 20 sewer fund. This approach is recommended because it will allow the City to more gradually increase water and sewer rates. It should be noted that the level of capital investment the City will be undertaking with the extension of the CIP still represents a significant amount of investment in the water and sewer systems, keeping the water system investments at a similar level as recent years and ramping of the investment in the sewer system. The funding level will allow the City to move forward with addressing critical water and sewer system capital needs associated with repair and replacement of system assets. Table 2-5 summarizes the recommended water and sewer rate increases identified over the next five years per the RSA that was conducted as described herein.
Table 2-5: Recommended Water and Sewer Rate Revenue Increase FY2026 FY2027 FY2028 FY2029 FY2030
Effective Date: 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Water Rate Revenue Increases 9.0% 9.0% 8.0% 6.0% 6.0%
Sewer Rate Revenue Increases 5.0% 5.0% 4.0% 4.0% 4.0%
The Appendix of this report includes the following detailed schedules presenting components of the recommended financial management plan developed for the Utility. • Cash flow Pro Forma - Schedule 7-W (for water) and Schedule 7-S (for sewer) o Revenues
o Expenses
o Cash balances
• Debt Service Coverage – Schedule 8-W (for water) and Schedule 8-S (for sewer) • FAMS model Control Panel - Schedule 9-W (water) and Schedule 9-S (sewer) o Summary of rate increases, debt coverage, and graphs of financial results over ten-year projection period.
• Capital Funding Summary - Schedule 10-W (water) and Schedule 10-S (sewer) • Future Loan Summary - Schedule 11-W (water) and Schedule 11-S (sewer) • Funding Summary by Fund - Schedule 12-W (water) and Schedule 12-S (sewer)
3. Cost of Service Allocation
City of Norco | Water and Sewer Rate Study Final Report Stantec | 21
3. COST-OF-SERVICE ALLOCATION
The previous section described the total rate revenue requirements of the water and sewer utilities. This section describes the cost-of-service allocation (COSA) analysis which identifies the specific cost drivers of providing service, which then forms the design of utility rates. The following section of this Report presents an overview of the COSA methodology utilized in the Study and corresponding results.
The COSA was completed only for the water system based on the fact that the City’s current sewer rate structure is functioning appropriately as discussed in Section 4 of this report.
The purpose of a COSA analysis for this study was to determine the cost of providing water service by system function and component so that the costs could be allocated to the various aspects of the water rate structure. This Study employed well-established industry practices for these types of studies as recognized by the American Water Works Association (AWWA) and other accepted industry practices.
Namely, this Study employed the “base-extra capacity” cost-of-service method promulgated in AWWA’s Manual M1: Principles of Water Rates, Fees, and Charges (M1) for the water system, whereby costs are first allocated to individual functions or activities (such as supply, treatment, distribution, meters/services, etc.) then the cost of each function are distributed to appropriate system parameters (such as average day demands, max day demands, customers, etc.). System parameter costs were then used as a basis for the development of alternative water rate structures. It is important to note that we found limited difference in the cost to serve different customer types (such as single-family homes, multifamily homes, commercial accounts, etc.). As such, this report espouses the City’s current (and historic) practice of a single rate schedule for all customer classes. For this reason, a customer class specific COSA analysis was not completed as part of the rate study analysis.
3.1 PROCESS
The COSA analysis was based upon the water fund FY 2025 estimated expenditures and revenue requirements per the RSA, and included the following:
Allocation of water system costs to the appropriate activities/functions (i.e. supply, distribution) Allocation of the costs of each function to specific system parameters (i.e. base capacity, customer) Allocation of the system parameter costs to the components of the rate structure (fixed and variable)
Calculation of private fire protection service cost allocation The following sub-sections present the COSA analysis results.
3. Cost of Service Allocation
City of Norco | Water and Sewer Rate Study Final Report Stantec | 22
3.2 COMPONENTS OF THE ANALYSIS
As the City maintains separate enterprise funds for the water and sewer systems, no initial separation of expenses or revenue between systems was necessary for this Study. Therefore, the following presents the key components or steps that were performed to distribute the expenses and revenue requirements of the water system to the system parameters and rate components.
3.2.1 Functional Cost Allocations
The operating expenses, debt service, and cash-funded capital requirements within the water system were distributed to specific activities or functional components of service. The functional components of the water system were identified as:
Source of Supply
Treatment
Distribution
Meters/Customer Services
Fire Protection (public and private services)
A detailed process was followed for assigning expenses to the respective functional components that was reviewed with City staff. Tables 3-1 and 3-2 outline how the water system budgetary category costs were allocated to the functional components of the water system. Table 3-1 presents the major budgetary categories within the water fund budget and how the expenses were allocated. Table 3-2 presents a more granular view of the allocations and the various criteria that were used to allocate the costs to the system functional components.
Table 3-1: Basis of budget category allocations to water functional components Human Resources Based on estimate of FTEs serving each respective function Finance Based on estimate of FTEs serving each respective function Public Works Inspection Based on estimate of FTEs serving each respective function Engineering Based on 5-Year spending by function
Water Division Based on estimate of FTEs serving each respective function (excluding water purchases directly allocated to supply)
Transfers Out Indirect (Less Water Purchase)
Debt Service Directly allocated to functions based on nature of projects funded by existing debt
Indirect Allocated to each function in proportion to the total operation and maintenance costs allocated to each function.
3. Cost of Service Allocation
City of Norco | Water and Sewer Rate Study Final Report Stantec | 23 Table 3-2: Budget category allocations to water functional components Supply Treatment Transmission
/ Distribution
Meters /
Services Fire Protection
Basis / Factor Allocation %
Supply 100.00% 0.00% 0.00% 0.00% 0.00%
Treatment 0.00% 100.00% 0.00% 0.00% 0.00%
Transmission / Distribution 0.00% 0.00% 95.00% 0.00% 5.00% Meters/Services 0.00% 0.00% 0.00% 100.00% 0.00%
Fire Protection 0.00% 0.00% 0.00% 0.00% 100.00%
Supply/Treatment 50.00% 50.00% 0.00% 0.00% 0.00%
5 Year CIP 0.00% 13.49% 64.61% 18.50% 3.40%
2025 CIP 0.00% 31.37% 39.86% 25.10% 3.67%
FTE 10.00% 10.00% 50.00% 20.00% 10.00%
Indirect 8.90% 47.00% 33.52% 6.95% 3.64%
3.2.2 Distribute Function Costs to System Parameters
Next the costs of each functional component were distributed to system parameters. As shown in Table 3- 3, the water system’s Supply costs are allocated entirely to the system’s Base Capacity (as measured by the Average Day), Meter/Services costs are assigned to the Customer parameter (as measured by the number of accounts), and Fire Protection is assigned to the Fire Protection parameter (as measured by hydraulic capacity).
Treatment costs are split between the Base Capacity and Extra Capacity – Max Day. This split is calculated based on the relative volume of an Average Day as compared to a Maximum Day (see Table 3-4). The logic is that the treatment system has been sized to be able to meet the demands associated with the average flows during a maximum day event.
Distribution costs are split between the system’s Base Capacity and Extra Capacity – Max Day and Peak Hour as the distribution system has been sized to meet all system demands (i.e. average day, maximum day and peak hour). The allocation percentages shown in Table 3-3 are calculated based on the relationship of the system demand values shown in Table 3-4 based on system demands over the past three years.
Table 3-3: Water System: Mapping Functional Components to System Parameters Function
Base
Capacity -
Avg Day
Extra
Capacity -
Max Day
Extra
Capacity -
Peak Hour
Fire
Protection Customers
Supply 100% 0% 0% 0% 0%
Treatment 57% 43% 0% 0% 0%
Transmission/Distribution 35% 27% 38% 0% 0%
Meters/Services 0% 0% 0% 0% 100%
Fire Protection 0% 0% 0% 100% 0%
3. Cost of Service Allocation
City of Norco | Water and Sewer Rate Study Final Report Stantec | 24 Table 3-4: Water System Peaking Profile
Average Day (MGD) Max Month (MGD) May Day (MGD)
Water System Demands 5.27 8.95 10.33
Next the water system’s functionalized costs for operating, existing debt service and cash-funded capital spending were allocated to system parameters based on the values shown in Table 3-5. The following table presents the resulting water system costs allocated to the system parameters for FY 2025.
Table 3-5: Water System Costs Allocated to System Parameters Water System Costs
Base Capacity $6,056,508
Extra Capacity - Max Day $4,626,940
Fire Protection $461,940
Customer Service / Metering $881,975
Total $12,027,364
Once the water system costs were allocated to the system parameters the cost components could be utilized to determine an appropriate rate structure as discussed in the next section.
3.2.5 Allocation of System Parameter Costs to Rate Components The water system parameter costs were reviewed to determine the appropriate allocation of each parameter to the components of the water rate structure. The costs associated with customer service and metering are typically recovered in the fixed monthly charge because the City will incur the costs regardless of metered water use. Similarly, the costs associated with providing public fire service can be recovered in the fixed charge because fire protection is a standby service and not related to actual metered water use.
It should be noted that the portion of fire protection related to private fire service is determined in the next section of this report. The base capacity (or average day use in the water system) should be recovered in the variable “usage” portion of the water rate because it correlates directly to use. The final component, extra capacity, can be recovered in the fixed charge because the City must be prepared to meet the peak demands regardless of actual customer use. Table 3-6 summarizes the allocation of the system parameter costs to the fixed and variable components of the water rate structure.
3. Cost of Service Allocation
City of Norco | Water and Sewer Rate Study Final Report Stantec | 25 Table 3-6: Allocation of System Parameter Costs to Rate Components Allocation
Water System Costs Fixed Variable
Base Capacity $6,056,508 0% 100%
Extra Capacity – Max Day $4,626,940 100% 0%
Fire Protection $461,940 100% 0%
Customer Service / Metering $881,975 100% 0%
Total $12,027,364 $5,970,855 $6,056,508
49.6% 50.4%
The application of the system parameter costs to the rate components is discussed further in the rate structure portion of this report.
3.2.6 Calculation of Private Fire Cost Allocation
As shown in Table 3-5, the COSA analysis identified the cost of providing public and private fire protection within the City at $461,940 in FY 2025. The majority of these costs are related to providing public fire service throughout the City. However, a portion of these costs are associated with properties that have private fire service providing fire service to their respective properties. The vast majority of these properties are commercial in nature. Fire protection costs are allocated based on the hydraulic capacity of the respective service sizes for each service. Table 3-7, shows the calculation of the allocation between private and public fire service. The private fire system accounts for 23% of the total fire system capacity, while the public fire system accounts for the remaining 77% (based upon the hydraulic capacity of the respective connection sizes for each service). This yields a cost allocation of $106,840 to the private fire system, which needs to be collected through private fire protection fees to those customers with such service.
Table 3-7: Private vs. Public Fire Capacity Usage
Number in
Service
Demand
Factor
Equivalent
Connections
Percent of
Total Fire
Protection
Total
Public Fire Service
Hydrant in Service 1,368 111.31 152,272
Total Public Hydrants 1,368 152,272 77% $355,100
Private Fire Service
Fire Lines in Service
4” 38 38.32 1,456
6” 168 111.31 18,700
8” 74 237.21 17,553
10” 19 426.58 8,105
Total Private Fire Lines 299 45,815 23% $106,840
4. Rate Structure Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 26
4. RATE STRUCTURE ANALYSIS
A rate structure analysis then used COSA analysis results as a basis for recommending a rate structure and schedule that would:
i. Fairly and equitably recover each fund’s current cost of providing service; ii. Conform to accepted industry practice and legal requirements; iii. Provide fiscal stability and recovery of fixed costs of the system; and iv. Maintain affordability to low volume and average users to the extent possible.
While all of the key goals for the rate structures were considered while evaluating rate structures, particular emphasis was placed on developing rate structures that maintain revenue stability within the Utility. The following sub-sections present a description of the basis of the recommended rate structure, specific rate schedules based upon the rate structure recommendations for implementation in FY 2026.
4.1 WATER RATES
The following explains how the recommended water rates were designed in a manner such that they comply with the cost-of-service results and address the aforementioned rate structure objectives.
4.1.1 Current Water Rates
Common industry practice for water utilities is a two-part rate structure comprised of both fixed and variable charges. Generally accepted practice recovers a portion of the costs of the system in a fixed monthly readiness-to-serve charge, recognizing that utilities have substantial investments in capacity-related costs and other fixed costs that are incurred year-round to maintain a state of readiness to meet peak demands when they occur. The amount of cost recovery in fixed versus variable charges is unique to each community’s balance of fiscal stability, philosophy regarding cost recovery, and level of fixed costs.
Consistent with standard industry practice, the City currently applies a water rate structure which is made up of two parts:
1. Fixed Monthly Charge; and
2. Uniform Usage Rates
The City’s Fixed Monthly Charge is a charge that is the same for all customer classes and is assessed based on meter size. The Fixed Monthly Charge currently recovers 48.8% of the fund’s rate revenue, which is slightly below the City’s fixed costs of providing water service as identified by the COSA and presented in Table 3-6 While the difference is minimal, it would be appropriate for the portion of revenue generated from fixed charge to be increased to generate 49.6%.
4. Rate Structure Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 27 The Uniform Usage Rates are designed to recover the remaining (50.4%) of the water fund’s total costs of providing water service, as identified by the COSA and presented in Table 3-6 .
4.1.2 Evaluation of the Water Rate Structure
The following presents a review of the evaluation of the City’s current rate structure and our findings and recommendations regarding any appropriate modifications.
4.1.2.1 Fixed Charges
Fixed costs are costs that the utility will incur, regardless of whether water is actually delivered to an account. In a sense, these are akin to “readiness-to-serve” costs. This Study considers two general categories of fixed costs: (1) the fixed costs associated with managing each water account (customer service, billing, administration) and (2) the fixed costs associated with the infrastructure needed to serve the account (distribution pipe, pumps, treatment facilities, etc.). During the City’s last rate study (completed in 2016), the City’s water fixed charges were designed to recover customer service costs on a per account basis and the fixed costs of providing infrastructure were designed to be assessed by meter and in proportion to the meter size (since the meter size reflects the amount of capacity that is prepared to serve the account). This fixed charge rate structure is logical and consistent with industry standards. Based on our evaluation of the structure of the fixed charges no modifications are recommended.
4.1.2.2 Volumetric Charges
Based on the level of cost recovery from the Fixed Monthly Charge, the remaining revenues will be collected with the Uniform Usage Rate.
4.2 RECOMMMENDED WATER RATES
The following explains how the cost-of-service results were used to calculate the proposed rates for each respective customer class.
4.2.1 Fixed Monthly Charge Methodology
As described in Section 3, this Study proposes to recover customer service costs and fixed infrastructure related costs associated with meeting the system peak demands within a Fixed Monthly Charge. In FY 2025 the customer service-related costs within the water fund total $881,975. The remaining costs allocated to the fixed monthly charge include those associated with providing system infrastructure to meet system peaking demands, including public fire protection. As shown on Table 3-6, in Section 3 of this report, the combination of the customer service costs and the fixed infrastructure costs total approximately $6.0 million in FY 2025 which represents 49.6% of the total system revenue requirements. Based on the results, the current level of the fixed charge recovery (48.8%) should be increased slightly to align with the cost of service.
4. Rate Structure Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 28
4.2.2 Uniform Usage Rate Methodology
After the fixed charges have been calculated, the remaining cost to provide service is collected through the volumetric rates (“Uniform Usage Rate”). The uniform usage rates would recover the remaining 50.4% of the water fund revenues on an annual basis.
4.2.3 Recommended Water Rates
Based upon the results of the COSA analysis, the current rate structure described herein, as well as the recommended financial management plan outlined as Scenario 3, we have prepared the following schedule of water rates. The recommended rates are summarized in Table 4-1 with the first rate adjustment in FY 2026 effective July 1, 2025 and in each subsequent year on July 1, through 2029. It should be noted that during the first year of the rate adjustment (FY2026), the percentage increase in fixed charges is slightly higher than usage charges to account for the cost of service adjustment discussed in this section. In subsequent years, the fixed charges and usage charges increase at the same percentage.
Table 4-1: Recommended Water Rates
Current FY2026 FY2027 FY2028 FY2029 FY2030
Fixed Charge
3/4" $47.80 $52.60 $57.34 $61.93 $65.65 $69.59
1" $71.01 $77.48 $84.45 $91.21 $96.68 $102.48
1 1/2" $165.95 $179.25 $195.38 $211.01 $223.67 $237.09
2" $213.47 $230.18 $250.90 $270.97 $287.23 $304.46
3" $559.23 $600.79 $654.86 $707.25 $749.69 $794.67
4" $996.81 $1,069.82 $1,166.10 $1,259.39 $1,334.95 $1,415.05 6" $2,371.04 $2,542.82 $2,771.67 $2,993.40 $3,173.00 $3,363.38 8” $3,804.31 $4,079.10 $4,446.22 $4,801.92 $5,090.04 $5,395.44 10” $6,018.68 $6,452.62 $7,033.36 $7,596.03 $8,051.79 $8,534.90 12” $9,893.75 $10,606.21 $11,560.77 $12,485.63 $13,234.77 $14,028.86 Usage Charge
Rate (per HCF) $2.70 $2.92 $3.18 $3.43 $3.64 $3.86
4.2.4 Private Fire Protection Charges
Based on the results of the COSA analysis, private fire protection charges were also analyzed. The City currently assess private fire protection charges as a fixed monthly charge equivalent to the fixed monthly charge for a water customer based on the size of the fire line, currently $50.88 for a 2” fire line. Based on the COSA analysis and the financial plan a set of proposed private fire projection charges are presented in Table 4-2 with the first rate adjustment in FY 2026 effective July 1, 2025 and each in subsequent year on July 1, through 2029.
4. Rate Structure Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 29 Table 4-2: Recommended Private Fire Protection Charges
Current FY2026 FY2027 FY2028 FY2029 FY2030
Fixed Charge
2" $50.88 $53.80 $58.65 $63.34 $67.14 $71.17
3" $52.83 $56.10 $61.14 $66.04 $70.00 $74.20
4" $56.20 $60.05 $65.45 $70.69 $74.93 $79.43
6" $68.30 $74.23 $80.91 $87.39 $92.63 $98.19
8” $89.16 $98.70 $107.58 $116.19 $123.16 $130.55
10” $120.54 $135.50 $147.70 $159.51 $169.08 $179.23
12” $164.03 $186.51 $203.29 $219.55 $232.73 $246.69
Usage Charge
Rate (per HCF) $5.40 $5.71 $6.23 $6.72 $7.13 $7.55
4.3 SEWER RATES
The City currently charges all sewer accounts a fixed monthly charge of $51.00. In addition, non-residential accounts including schools, governmental, industrial, commercial and multi-family residential (4 individual living units or more) are charged a sewer rate per HCF for all metered water usage over 10 HCF. The current monthly fixed charge generates approximately 60% of the total sewer fund revenues. While the fixed costs of operating the sewer system exceed this value the current structure provides a strong level of revenue stability and fixed cost recovery. Based on our review of the current rate structure we recommend that the current structure remain in place with rate adjustments as outlined in our recommended financial management plan for the sewer fund. In addition to the active sewer accounts the City has installed laterals to parcels throughout the City that have not yet connected to the sewer system. These parcel owners are assessed a non-connect fee intended to recover the investment in and maintenance of treatment capacity at WRCRWA and infrastructure required to provide the available sewer service when these properties eventually connect to the City sewer system. The non-connect fees should be adjusted consistent with the financial management plan to ensure that the fee continues to recover the cost of making sewer service available. However, because the non-connect fee is considered to be a standby fee and not a service fee, the rate for the non-connect cannot be revised as part the Proposition 218 process and will require a separate engineers report and approval process. Therefore, the non-connect fee is not being adjusted at this time.
The recommended sewer rates are summarized in Table 4-3 and are intended to generate the revenues identified in the financial management plan for the sewer fund. As demonstrated in the table, sewer rates and fees will be increased beginning in FY2026 (effective July 1, 2025 with adjustments on July 1 of each subsequent year through 2029).
4. Rate Structure Analysis
City of Norco | Water and Sewer Rate Study Final Report Stantec | 30 Table 4-3: Recommended Sewer Rates
Current FY2026 FY2027 FY2028 FY2029 FY2030
Monthly Fixed Charge $51.00 $53.55 $56.23 $58.48 $60.82 $63.25 Sewer Usage Charge
Rate (per HCF) $8.00 $8.40 $8.82 $9.17 $9.54 $9.92
Monthly Non-Connect Fee $19.00 $19.00 $19.00 $19.00 $19.00 $19.00 * Monthly Fixed Charge applies to all customer classes
** Sewer Usage Charge excludes single family and irrigation customer classes *** Monthly Non-Connect Fee is for single family residential on septic and is not being adjusted at this time
5. Recycled Water Rates
City of Norco | Water and Sewer Rate Study Final Report Stantec | 31
5. RECYCLED WATER RATES
This section of the report outlines an evaluation of the estimated cost of providing recycled water within the City. The City currently maintains approximately six (6) miles of recycled water distribution pipe lines which are currently dry (installed years ago but do not currently convey recycled water). The City has been working in partnership with WRCRWA and other member agencies (City of Corona, Western Municipal Water District, Home Gardens Sanitation District, and the Jurupa Community Services District) to facilitate the development of a regional recycled water system. This includes the construction of a booster pump station and pipeline that would convey recycled water to partner communities and the City of Norco. It should be noted that at this time all capital projects will be completed in early calendar year 2026, and the City will be able to deliver recycled water to properties in the City. As a result, the analysis assumes a “Year 1” cost analysis and recycled water rate which reflects the first year of recycled water operations in the City.
5.1 RECYCLED WATER COSTS
The cost of providing recycled water consists of operational costs, repayment of loans and other debt obligations and any cash funded capital required within the system. The operational costs consist of costs that will be incurred internal to the City (staff time and materials) and the City’s portion of the shared operational costs for the regional booster pump station and pipeline. The internal operational costs were determined based on discussions with City staff and consist of estimates of labor and materials associated with managing the recycled water system. The external operational costs have been provided to the City based on initial cost sharing agreements. The estimated initial operational costs are presented in Table 5-
1. Table 5-1 Recycled Water O&M
Expenditure Type Year 1
Internal O&M $96,902
Pipeline O&M $27,638
Pump Station O&M $70,948
Total $195,489
To develop a forecast of recycled water O&M costs, the internal O&M costs were assumed to increase at 3% per year, the pipeline O&M costs were set at 1% per year and the booster pump station O&M costs were set at 3% per year. The pipeline and booster pump station escalation factors are based on the cost sharing agreement signed by the WRCRWA member agencies.
Similar to the recycled water operating costs, the City will need to fund internal and external capital costs to facilitate the delivery of recycled water. The internal capital includes upgrades to the existing recycled
5. Recycled Water Rates
City of Norco | Water and Sewer Rate Study Final Report Stantec | 32 water system within the City. The City estimates that these capital projects will cost $1.12 million. The external capital includes the City’s share in the pump station and the pipeline. Table 5-2 summarizes the total estimated capital.
Table 5-2 Recycled Water Capital
Capital Project
Internal Capital $1,120,000
Pipeline Cost Share $2,736,456
Booster Pump Station Cost Share $2,925,284
Total $6,781,739
The City has identified several funding sources for the recycled water capital projects. These funding sources include the $3.2 million loan provided from the sewer fund and various grant proceeds. The grant proceeds include a US EPA Community Grant that can provide up to $3 million towards the construction of the booster pump station with the City required to provide 25% in matching funds and a $0.56 million grant for the internal capital projects provided by Riverside County Flood Control. Based on these funding sources, it was assumed that the loan from the sewer fund would be used to pay for the balance of the internal capital projects and the balance of booster pump station. The City has the option to pay for the pipeline over time as part of the cost sharing agreement with the Jurupa Community Service District. The terms are favorable with a 20-year payback period and 0.80% interest. After funding all identified capital, this approach would leave the recycled water fund with approximately $1.9 million in operating reserve, equivalent to the $3.2 million sewer loan less the $1.3 million used to pay for Internal Capital and Booster Pump Station. Table 5-3 summarizes the sources and uses of funds for capital projects.
It should be noted the City has a second US EPA Community Grant in the amount of $3 million that is awaiting approval as a project in the Federal Budget. If this grant is approved the City will be able to fund 75% of the capital cost for the recycled water pipeline project rather than using a loan from JCSD. This would help reduce the cost for providing recycled water.
Table 5-3 Recycled Water Capital Funding
Capital Project Project Cost Grants Sewer Fund
Loan
JCSD Loan
Internal Capital $1,120,000 $560,000 $560,000 -
Pipeline Cost Share $2,736,456 - - $2,736,456
Booster Pump Station Cost Share $2,925,284 $2,193,963 $731,321 - Total $6,781,739 $2,753,963 $1,291,321 $2,736,456
Based on the capital funding assumptions, the recycled water fund will be obligated to meet loan payments originating from the loan from the sewer fund and the pipeline loan from JCSD. The repayment of the JCSD
5. Recycled Water Rates
City of Norco | Water and Sewer Rate Study Final Report Stantec | 33 loan is projected to start in Year 1 of operations and the loan to the sewer fund has been outlined to begin in the second year of operations. Table 5-4 presents the annual payments over the first five years of operations.
Table 5-4 Recycled Water Loan Payments
Year 1 Year 2 Year 3 Year 4 Year 5
Sewer Fund Loan - $162,760 $162,760 $162,760 $162,760
JCSD Pipeline Loan $148,606 $148,606 $148,606 $148,606 $148,606 Total $148,606 $311,336 $311,336 $311,336 $311,336
The total estimated annual expenditures for the recycled water system are summarized in Table 5-5.
Table 5-5 Recycled Water Total Annual Expenditures
Expenditure Type Year 1 Year 2 Year 3 Year 4 Year 5
O&M Costs $195,489 $200,801 $206,266 $211,890 $217,678
Capital Costs $148,606 $311,366 $311,366 $311,366 $311,366 Total Expenditures $344,094 $512,166 $517,632 $523,256 $529,043 Table 5-5 shows that the cost of providing recycled water will be in the range of approximately $0.5 million during the initial years of the systems operations. This level of expenditure is largely contingent on the capital costs. Additional grants or identification of additional capital improvements would have a substantial impact on the annual costs.
5.2 RECYCLED WATER CUSTOMERS AND DEMAND FORECAST
The City has identified several properties within the City that desire recycled water. These properties include Wayne Makin Shearer Sports Complex, Neal Snipes Park, Pikes Peak Park, and the Navy’s Lake Norconian. Caltrans has also expressed some interest in using recycled water along the I-15 freeway, but no firm commitment has been provided. Based on the identified properties, the initial estimated demand for the service is 350 acre-feet per year. For modeling purposes this initial recycled water demand is forecasted to increase at 1% per year as additional demands are placed on the system. Table 5-6 presents the assumed annual demand over the first five years of operations Table 5-6 Recycled Water Demand Forecast
Demand (HCF) Year 1 Year 2 Year 3 Year 4 Year 5
Baseline 152,470 152,470 152,470 152,470 152,470
Growth - 1,525 3,065 4,620 6,191
Total 152,470 153,995 155,535 157,090 158,661
5. Recycled Water Rates
City of Norco | Water and Sewer Rate Study Final Report Stantec | 34
5.3 SALES OF RECYCLED WATER TO OUTSIDE AGENCIES
WRCRWA members, including Norco, do not have enough users of recycled water to utilize all the recycled water that will be available on a daily basis. This unused recycled water will be discharged down the Santa Ana River. However, the member agencies elected to cost share in the construction of the JCSD pipeline that is intended to facilitate the sale and delivery of recycled water to other agencies in the Chino Basin that have demands for recycled water. WRCRWA is currently engaging multiple agencies that have expressed interest in obtaining long-term agreements for recycled water. If WRCRWA is able to sell recycled water to outside agencies then Norco will be provided a proportional share of the sales as revenue. However, this potential revenue is not considered as part of the COSA analysis in the development of the proposed recycled water rates.
5.4 RECYCLED WATER RATES
Based on the identified expenditures and the anticipated demands for recycled water within the City it was possible to develop an estimate of the recycled water rates that would be required to cover the full cost of providing the service. Table 5-7 demonstrates what the usage rate per HCF would need to be in order to cover the full cost of recycled water with a breakout for the operating and capital components. The table also includes a monthly fixed charge for customer receiving recycled water. Given the limited number of recycled water customers, a monthly fixed charge would not generate a substantial amount of revenue but it would provide some revenue stability and result in a rate structure that is consistent with the City’s water rate structure. Table 5-7 presents the recycled water rates with a monthly fixed charge which would recover 5% of the capital costs.
Table 5-7: Recommended Recycled Water Rates - Baseline
Year 1 Year 2 Year 3 Year 4 Year 5
Fixed Charge
3/4" $23.82 $49.40 $50.38 $51.34 $51.79
1" $37.79 $78.40 $79.96 $81.47 $82.18
1 1/2" $94.97 $197.03 $200.93 $204.73 $206.53
2" $123.59 $256.40 $261.47 $266.42 $268.76
3" $331.84 $688.39 $702.03 $715.32 $721.60
4" $595.38 $1,235.11 $1,259.57 $1,283.42 $1,294.69
6" $1,423.04 $2,952.09 $3,010.55 $3,067.56 $3,094.49
8” $2,286.25 $4,742.84 $4,836.76 $4,928.35 $4,971.62
10” $3,619.91 $7,509.51 $7,658.21 $7,803.23 $7,871.74
12” $5,953.76 $12,351.08 $12,595.66 $12,834.18 $12,946.87 Usage Rate (per HCF)
Operating Costs $1.28 $1.30 $1.33 $1.35 $1.37
Capital Costs $0.93 $1.92 $1.90 $1.88 $1.86
Total Unit Rate $2.21 $3.22 $3.23 $3.23 $3.23
5. Recycled Water Rates
City of Norco | Water and Sewer Rate Study Final Report Stantec | 35 Based on discussions with City staff, it is possible that the City may awarded a second US EPA Community Grant that would be used to fund the City’s portion of the JCSD pipeline. This would eliminate the need for the City to participate in a loan with JCSD for the pipeline. If the City were to receive a grant for $3 million and fund the 25% match with cash from the sewer loan (which would leave approximately $0.7 million), the recycled water rates would be reduced. Table 5-8 presents the recycled water rates assuming the additional grant funding. Under this scenario the only capital costs that would need to be funded would include the repayment of the loan to the sewer fund. For the purposes of this study the recommended rates for recycled water are those shown in Table 5-7 but if the second grant is awarded the City would be able to assess the rates in Table 5-8 without having to conduct a new Prop 218 Notice and Hearing.
Table 5-8: Potential Recycled Water Rates – Additional Grants Year 1 Year 2 Year 3 Year 4 Year 5
Fixed Charge
3/4" - $25.83 $26.34 $26.84 $27.07
1" - $40.98 $41.80 $42.59 $42.96
1 1/2" - $102.99 $105.03 $107.02 $107.96
2" - $134.03 $136.68 $139.27 $140.49
3" - $359.84 $366.97 $373.92 $377.20
4" - $645.63 $658.41 $670.88 $676.77
6" - $1,543.15 $1,573.70 $1,603.50 $1,617.58
8” - $2,479.22 $2,528.31 $2,576.19 $2,598.81
10” - $3,925.44 $4,003.17 $4,078.98 $4,114.79
12” - $6,456.27 $6,584.12 $6,708.80 $6,767.71
Usage Rate (per HCF)
Operating Costs $1.28 $1.30 $1.33 $1.35 $1.37
Capital Costs $0.00 $1.00 $0.99 $0.98 $0.97
Total Unit Rate $1.28 $2.31 $2.32 $2.33 $2.34
Based on the assumptions and estimated costs outlined within this section of the report, there are potential wide variations in the level of recycled water rates given the level of demands and funding of capital.
6. Customer Impacts and Utility Comparisons
City of Norco | Water and Sewer Rate Study Final Report Stantec | 36
6. CUSTOMER IMPACTS AND UTILITY COMPARISONS
As part of this Study, a bill impact analysis was conducted to better understand the changes that the recommended rate adjustments would have on the monthly bills of various types of customers. Additionally, a comparison of water and sewer bills for the City and surrounding utilities was completed to provide perspective on the level of water and sewer bills.
6.1 WATER AND SEWER USER RATE BILL IMPACTS
Table 6-1 demonstrates the bill impact analysis over the next three years for Single Family Residential customers with a 3/4” water meter and varying amounts of water usage. As highlighted in the table the average residential customer in the City uses approximately 20 HCF per month. Table 6-2 shows the bill impact analysis for Commercial customers with a 1” water meter and varying amounts of water usage over the next three years. It should be noted that 3/4" and 1” metered customers account for 96% of the total number of accounts served by the City.
Table 6-1: Water Bill Impact Analysis, Single Family Residential with 3/4” Meter Monthly
Use (HCF) Current Bill Proposed FY 2026 Bill Change Proposed FY 2027 Bill Change Proposed FY 2028 Bill Change 5 $61.30 $67.20 $5.90 $73.24 $6.04 $79.08 $5.84
10 $74.80 $81.80 $7.00 $89.14 $7.34 $96.23 $7.09
15 $88.30 $96.40 $8.10 $105.04 $8.64 $113.38 $8.34
20 $101.80 $111.00 $9.20 $120.94 $9.94 $130.53 $9.59
25 $115.30 $125.60 $10.30 $136.84 $11.24 $147.68 $10.84 30 $128.80 $140.20 $11.40 $152.74 $12.54 $164.83 $12.09 35 $142.30 $154.80 $12.50 $168.64 $13.84 $181.98 $13.34 40 $155.80 $169.40 $13.60 $184.54 $15.14 $199.13 $14.59 Table 6-2: Water Bill Impact Analysis, Commercial Customer with 1” Meter Monthly
Use (HCF) Current Bill Proposed FY 2026 Bill Change Proposed FY 2027 Bill Change Proposed FY 2028 Bill Change 5 $84.51 $92.08 $7.57 $100.35 $8.27 $108.36 $8.01
10 $98.01 $106.68 $8.67 $116.25 $9.57 $125.51 $9.26
15 $111.51 $121.28 $9.77 $132.15 $10.87 $142.66 $10.51
20 $125.01 $135.88 $10.87 $148.05 $12.17 $159.81 $11.76 25 $138.51 $150.48 $11.97 $163.95 $13.47 $176.96 $13.01 30 $152.01 $165.08 $13.07 $179.85 $14.77 $194.11 $14.26 35 $165.51 $179.68 $14.17 $195.75 $16.07 $211.26 $15.51 40 $179.01 $194.28 $15.27 $211.65 $17.37 $228.41 $16.76 45 $192.51 $208.88 $16.37 $227.55 $18.67 $245.56 $18.01 50 $206.01 $223.48 $17.47 $243.45 $19.97 $262.71 $19.26 55 $219.51 $238.08 $18.57 $259.35 $21.27 $279.86 $20.51
6. Customer Impacts and Utility Comparisons
City of Norco | Water and Sewer Rate Study Final Report Stantec | 37 Table 6-3 demonstrates the sewer bill impact analysis over the next three years for Single Family Residential customers. Table 6-4 shows the sewer bill impact analysis for Commercial customers with varying amounts of water usage over the next three years. It should be noted that all single-family customers pay a flat fixed charge for sewer service and commercial customers pay a fixed charge plus a sewer usage rate for all usage above 10 HCF.
Table 6-3: Sewer Bill Impact Analysis, Residential Customers Current Bill Proposed FY
2026 Bill Change Proposed FY 2027 Bill Change Proposed FY 2028 Bill Change $51.00 $53.55 $2.55 $56.23 $2.68 $58.48 $2.25
Table 6-4: Sewer Bill Impact Analysis, Commercial Customer Monthly
Use (HCF) Current Bill Proposed FY 2026 Bill Change Proposed FY 2027 Bill Change Proposed FY 2028 Bill Change 5 $51.00 $53.55 $2.55 $56.23 $2.68 $58.48 $2.25
10 $51.00 $53.55 $2.55 $56.23 $2.68 $58.48 $2.25
15 $91.00 $95.55 $4.55 $100.33 $4.78 $104.33 $4.00
20 $131.00 $137.55 $6.55 $144.43 $6.88 $150.18 $5.75
25 $171.00 $179.55 $8.55 $188.53 $8.98 $196.03 $7.50
30 $211.00 $221.55 $10.55 $232.63 $11.08 $241.88 $9.25
35 $251.00 $263.55 $12.55 $276.73 $13.18 $287.73 $11.00 40 $291.00 $305.55 $14.55 $320.83 $15.28 $333.58 $12.75 45 $331.00 $347.55 $16.55 $364.93 $17.38 $379.43 $14.50 50 $371.00 $389.55 $18.55 $409.03 $19.48 $425.28 $16.25 55 $411.00 $431.55 $20.55 $453.13 $21.58 $471.13 $18.00
6.2 WATER AND SEWER BILL COMPARISON SURVEY
To provide a comparison of the relative charges for water and sewer service in the City of Norco compared with surrounding communities, a bill survey was completed. While the comparison provides insight to local charges between communities it is important to note that there are a host of factors that make it difficult to provide a true “apples to apples” comparison. Each community has differing economies of scale, purchase water costs, age of infrastructure, outside funding sources and many other factors. Figure 6-1 presents the comparison. It is important to note that each monthly bill in the survey was calculated based upon current FY 2025 water and sewer rates. It is very likely that the majority of entities surveyed will be implementing rate increases in the coming years.
6. Customer Impacts and Utility Comparisons
City of Norco | Water and Sewer Rate Study Final Report Stantec | 38 Figure 6-1: Residential Monthly Bill Comparison (20 HCF per Month with 3/4” Meter) .
City of Norco | Water and Sewer Rate Study Final Report Stantec | 39 Disclaimer
This document was produced by Stantec Consulting Services, Inc. (“Stantec”) for the City of Norco and is based on a specific scope agreed upon by both parties. In preparing this report, Stantec utilized information and data obtained from the City or public and/or industry sources. Stantec has relied on the information and data without independent verification, except only to the extent such verification is expressly described in this document. Any projections of future conditions presented in the document are not intended as predictions, as there may be differences between forecasted and actual results, and those differences may be material.
Additionally, the purpose of this document is to summarize Stantec’s analysis and findings related to this project, and it is not intended to address all aspects that may surround the subject area. Therefore, this document may have limitations, assumptions, or reliances on data that are not readily apparent on the face of it. Moreover, the reader should understand that Stantec was called on to provide judgments on a variety of critical factors which are incapable of precise measurement. As such, the use of this document and its findings by the City should only occur after consultation with Stantec, and any use of this document and findings by any other person is done so entirely at their own risk.
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 40 APPENDIX:REVENUE SUFFICIENCY ANALYSIS
SCHEDULES
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 41 Water Fund Working Capital as of 7/1/2024 Schedule 1-W
Fund Balance Detail Revenue Fund Rate Stabilization Capital Fund Current Unrestricted Assets
Cash and Cash Equivalents $ 3,706,734 $ - $ 4,805,770
Rate Stabilization - 1,555,554 -
Receivables: 2,334,791 - -
Interest 17,982 - 16,727
Due from Other Funds 47,864 - -
Prepaid Items 12,604 - -
Total Assets $ 6,119,975 $ 1,555,554 $ 4,822,497
Current Liabilities
Accounts and Contracts Payable $ (1,353,382) $ - $ (37,727) Deposits Payable (257,498) - -
Calculated Fund Balance (Assets - Liabilities) $ 4,509,096 $ 1,555,554 $ 4,784,770 Available Fund Balance $ 4,509,096 $ 1,555,554 $ 4,784,770 Fund Summary
Total Available Funds $ 10,849,420
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 42 Sewer Fund Working Capital as of 7/1/2024 Schedule 1-S
Stantec Grouping of Funds in Model Revenue Fund Sewer Facilities Improvement
Current Unrestricted Assets
Cash and Cash Equivalents $ 254,611 $ 12,303,479
Receivables: 1,344,976 -
Interest 53,988 46,492
Prepaid Items 12,604 -
Total Assets $ 1,666,180 $ 12,349,971
Current Liabilities
Accounts and Contracts Payable $ (387,028) $ (136,757)
Deposits Payable (205,630) -
Calculated Fund Balance (Assets - Liabilities) $ 1,073,522 $ 12,213,214 Available Fund Balance $ 1,073,522 $ 12,213,214
Total Available Funds $ 13,286,736
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 43 Schedule 2-W
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Water Rate Revenue
1 Water Sales - Fixed Monthly Charges $ 6,016,700 $ 6,574,599 $ 7,184,229 $ 7,778,364 $ 8,265,679 $ 8,783,524 $ 9,157,702 $ 9,547,820 $ 9,954,557 $ 10,378,621 $ 10,820,750 2 Water Sales - Usage Charges 6,000,000 6,523,568 7,092,824 7,641,003 8,079,114 8,542,344 8,861,716 9,193,029 9,536,729 9,893,279 10,263,159 3 Total Water Rate Revenue $ 12,016,700 $ 13,098,167 $ 14,277,052 $ 15,419,368 $ 16,344,792 $ 17,325,867 $ 18,019,418 $ 18,740,849 $ 19,491,286 $ 20,271,900 $ 21,083,909 Other Operating Revenue
4 Energy Pass Thru $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 $ 58,200 5 Bulk Water 140,700 140,700 140,700 140,700 140,700 140,700 140,700 140,700 140,700 140,700 140,700 6 Reconnection & Coll. Fees 39,600 39,600 39,600 39,600 39,600 39,600 39,600 39,600 39,600 39,600 39,600 7 Other Service Fees 35,300 35,300 35,300 35,300 35,300 35,300 35,300 35,300 35,300 35,300 35,300 8 Miscellaneous Revenue 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 9 Total Other Operating Revenue $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 Interest Income
10 Interest Income $ 283,316 $ 280,495 $ 241,580 $ 183,685 $ 197,093 $ 203,450 $ 175,597 $ 177,373 $ 238,563 $ 275,423 $ 258,922 11 Total Interest Income $ 283,316 $ 280,495 $ 241,580 $ 183,685 $ 197,093 $ 203,450 $ 175,597 $ 177,373 $ 238,563 $ 275,423 $ 258,922 Capital Project Funding Sources
12 Loan Interest $ 80,734 $ 76,177 $ 71,499 $ 66,697 $ 61,767 $ 56,705 $ 51,509 $ 46,174 $ 40,698 $ 35,075 $ 29,303 13 Silverlakes Loan Payment 171,177 175,734 180,412 185,214 190,144 195,206 200,402 205,737 211,213 216,836 222,608 14 Water Capital Fees 120,403 120,704 121,005 121,308 121,611 121,915 122,220 122,525 122,832 123,139 123,447 15 Total Capital Project Funding Sources $ 372,314 $ 372,615 $ 372,916 $ 373,219 $ 373,522 $ 373,826 $ 374,131 $ 374,437 $ 374,743 $ 375,050 $ 375,358 16 Total Cash Inflows $ 12,950,130 $ 14,029,077 $ 15,169,349 $ 16,254,072 $ 17,193,207 $ 18,180,944 $ 18,846,946 $ 19,570,458 $ 20,382,392 $ 21,200,173 $ 21,995,989 Projection of Cash Inflows
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 44 Schedule 2-S
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Sewer Rate Revenue
1 Base Rate Revenue $ 4,008,384 $ 4,219,325 $ 4,441,367 $ 4,630,569 $ 4,827,832 $ 5,033,497 $ 5,147,003 $ 5,263,068 $ 5,381,750 $ 5,503,108 $ 5,627,203 2 Usage Rate Revenue 3,125,631 3,273,667 3,428,714 3,556,903 3,689,885 3,827,839 3,894,586 3,962,497 4,031,592 4,101,892 4,173,417 3 Total Sewer Rate Revenue $ 7,134,015 $ 7,492,992 $ 7,870,081 $ 8,187,472 $ 8,517,717 $ 8,861,336 $ 9,041,588 $ 9,225,564 $ 9,413,341 $ 9,605,000 $ 9,800,621 Other Operating Revenue
4 Loan Interest 96,200 100,643 92,754 84,629 76,259 67,639 58,760 49,614 40,195 30,492 20,499 5 Corona Loan Payments 263,000 262,964 270,853 278,978 287,348 295,968 304,847 313,993 323,412 333,115 343,108 6 Miscellaneous Revenue 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 7 Total Other Operating Revenue $ 361,200 $ 365,607 $ 365,607 $ 365,607 $ 365,607 $ 365,607 $ 365,607 $ 365,607 $ 365,607 $ 365,607 $ 365,607 Transfers In
8 Transfer In (Loan payment from Recycled Water) $ - $ - $ - $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 9 Total Transfers In $ - $ - $ - $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 $ 163,905 Interest Income
10 Unrestricted $ 327,107 $ 236,223 $ 194,850 $ 152,031 $ 114,451 $ 85,272 $ 70,707 $ 66,381 $ 61,857 $ 57,007 $ 51,703 11 Total Interest Income $ 327,107 $ 236,223 $ 194,850 $ 152,031 $ 114,451 $ 85,272 $ 70,707 $ 66,381 $ 61,857 $ 57,007 $ 51,703 Capital Project Funding Sources
12 Loan Interest $ 82,330 $ 77,683 $ 72,913 $ 68,015 $ 62,988 $ 57,826 $ 52,527 $ 47,087 $ 41,502 $ 35,769 $ 29,883 13 Corona Loan Payments 25,443 25,443 25,443 25,443 25,443 25,443 25,443 25,443 25,443 25,443 20,709 14 Silverlakes Loan Payment 171,177 175,734 180,412 185,214 190,144 195,206 200,402 205,737 211,213 216,836 222,608 15 Sewer Connection Fees 108,515 108,786 109,058 109,331 109,604 109,878 110,153 110,428 110,704 110,981 111,259 16 Total Capital Project Funding Sources $ 387,465 $ 387,646 $ 387,826 $ 388,003 $ 388,179 $ 388,353 $ 388,525 $ 388,695 $ 388,863 $ 389,029 $ 384,458 17 Total Cash Inflows $ 8,209,787 $ 8,482,468 $ 8,818,364 $ 9,257,019 $ 9,549,860 $ 9,864,474 $ 10,030,333 $ 10,210,152 $ 10,393,574 $ 10,580,547 $ 10,766,294 Projection of Cash Inflows
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 45 Projection of Cash Outflows Schedule 3-W 1 of 3
Expense Line Item FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Human Resources
1 Full Time Salaries $ 20,900 $ 21,527 $ 22,173 $ 22,838 $ 23,523 $ 24,229 $ 24,956 $ 25,704 $ 26,475 $ 27,270 $ 28,088 2 Overtime 100 103 106 109 113 116 119 123 127 130 134
3 Administrative Leave Cash Out 200 206 212 219 225 232 239 246 253 261 269 4 Sick Leave Buy Back 400 412 424 437 450 464 478 492 507 522 538 5 Annual Vacation Cash Out 500 515 530 546 563 580 597 615 633 652 672 6 PERS Retirement 2,800 2,940 3,087 3,241 3,403 3,574 3,752 3,940 4,137 4,344 4,561 7 PERS Monthly Employer UAL Payment 7,400 7,770 8,159 8,566 8,995 9,444 9,917 10,413 10,933 11,480 12,054 8 Employee Group Insurance 3,800 3,990 4,190 4,399 4,619 4,850 5,092 5,347 5,614 5,895 6,190 9 Medical Savings Account 100 103 106 109 113 116 119 123 127 130 134 10 Medicare Insurance 400 420 441 463 486 511 536 563 591 621 652 11 Total Human Resources $ 36,600 $ 37,986 $ 39,428 $ 40,928 $ 42,490 $ 44,114 $ 45,805 $ 47,565 $ 49,398 $ 51,305 $ 53,291 Finance
12 Full Time Salaries $ 284,200 $ 292,726 $ 301,508 $ 310,553 $ 319,870 $ 329,466 $ 339,350 $ 349,530 $ 360,016 $ 370,817 $ 381,941 13 Part-Time Salaries 11,600 11,948 12,306 12,676 13,056 13,448 13,851 14,267 14,695 15,135 15,589 14 Administrative Leave Cash Out 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 15 Sick Leave Buy Back 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 16 Annual Vacation Cash Out 2,300 2,369 2,440 2,513 2,589 2,666 2,746 2,829 2,914 3,001 3,091 17 PERS Retirement 25,800 27,090 28,445 29,867 31,360 32,928 34,574 36,303 38,118 40,024 42,025 18 PERS Monthly Employer UAL Payment 22,100 23,205 24,365 25,584 26,863 28,206 29,616 31,097 32,652 34,284 35,999 19 Employee Group Insurance 55,500 58,275 61,189 64,248 67,461 70,834 74,375 78,094 81,999 86,099 90,404 20 Vehicle Allowance 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566 1,613 21 Cell Phone Stipend 200 206 212 219 225 232 239 246 253 261 269 22 Medical Savings Account 500 525 551 579 608 638 670 704 739 776 814 23 Medicare Insurance 4,300 4,515 4,741 4,978 5,227 5,488 5,762 6,051 6,353 6,671 7,004 24 Deferred Compensation 300 309 318 328 338 348 358 369 380 391 403 25 Tuition Reimbursement 800 824 849 874 900 927 955 984 1,013 1,044 1,075 26 Conferences & Meetings 6,000 6,180 6,365 6,556 6,753 6,956 7,164 7,379 7,601 7,829 8,063 27 Office Supplies 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 28 Printing & Copies 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 29 Postage 35,500 36,565 37,662 38,792 39,956 41,154 42,389 43,661 44,970 46,319 47,709 30 Special Departmental 700 721 743 765 788 811 836 861 887 913 941 31 Equipment Rental 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 2,688 32 Contractual Services 64,000 65,920 67,898 69,935 72,033 74,194 76,419 78,712 81,073 83,505 86,011 33 Accounting & Auditing Svc 11,700 12,051 12,413 12,785 13,168 13,564 13,970 14,390 14,821 15,266 15,724 34 Financial Services 22,000 22,660 23,340 24,040 24,761 25,504 26,269 27,057 27,869 28,705 29,566 35 Computer Replacement Chrg 3,800 3,914 4,031 4,152 4,277 4,405 4,537 4,674 4,814 4,958 5,107 36 Computing Operations 61,100 62,933 64,821 66,766 68,769 70,832 72,957 75,145 77,400 79,722 82,113 37 Total Finance $ 634,600 $ 655,802 $ 677,748 $ 700,467 $ 723,986 $ 748,336 $ 773,547 $ 799,654 $ 826,688 $ 854,686 $ 883,684 Engineering
38 Full Time Salaries $ 271,600 $ 279,748 $ 288,140 $ 296,785 $ 305,688 $ 314,859 $ 324,305 $ 334,034 $ 344,055 $ 354,376 $ 365,008 39 Overtime 400 412 424 437 450 464 478 492 507 522 538 40 Administrative Leave Cash Out 3,100 3,193 3,289 3,387 3,489 3,594 3,702 3,813 3,927 4,045 4,166 41 Sick Leave Buy Back 4,200 4,326 4,456 4,589 4,727 4,869 5,015 5,165 5,320 5,480 5,644 42 Annual Vacation Cash Out 2,700 2,781 2,864 2,950 3,039 3,130 3,224 3,321 3,420 3,523 3,629 43 PERS Retirement 25,900 27,195 28,555 29,982 31,482 33,056 34,708 36,444 38,266 40,179 42,188 44 PERS Monthly Employer UAL Payment 29,100 30,555 32,083 33,687 35,371 37,140 38,997 40,947 42,994 45,144 47,401 45 Employee Group Insurance 35,700 37,485 39,359 41,327 43,394 45,563 47,841 50,233 52,745 55,382 58,152 46 Vehicle Allowance 1,500 1,545 1,591 1,639 1,688 1,739 1,791 1,845 1,900 1,957 2,016 47 Cell Phone Stipend 200 206 212 219 225 232 239 246 253 261 269 48 Medical Savings Account 300 315 331 347 365 383 402 422 443 465 489 49 Medicare Insurance 4,000 4,200 4,410 4,631 4,862 5,105 5,360 5,628 5,910 6,205 6,516 50 Deferred Compensation 100 103 106 109 113 116 119 123 127 130 134 51 Total Engineering $ 378,800 $ 392,064 $ 405,821 $ 420,090 $ 434,892 $ 450,249 $ 466,181 $ 482,713 $ 499,868 $ 517,671 $ 536,148
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 46 Projection of Cash Outflows Schedule 3-W 2 of 3
Water
52 Full Time Salaries $ 742,000 $ 764,260 $ 787,188 $ 810,803 $ 835,128 $ 860,181 $ 885,987 $ 912,566 $ 939,943 $ 968,142 $ 997,186 53 Overtime 140,000 144,200 148,526 152,982 157,571 162,298 167,167 172,182 177,348 182,668 188,148 54 Administrative Leave Cash Out 3,100 3,193 3,289 3,387 3,489 3,594 3,702 3,813 3,927 4,045 4,166 55 Sick Leave Buy Back 6,400 6,592 6,790 6,993 7,203 7,419 7,642 7,871 8,107 8,351 8,601 56 Annual Vacation Cash Out 5,500 5,665 5,835 6,010 6,190 6,376 6,567 6,764 6,967 7,176 7,392 57 PERS Retirement 77,900 81,795 85,885 90,179 94,688 99,422 104,393 109,613 115,094 120,848 126,891 58 PERS Monthly Employer UAL Payment 125,000 131,250 137,813 144,703 151,938 159,535 167,512 175,888 184,682 193,916 203,612 59 Employee Group Insurance 156,600 161,298 166,137 171,121 176,255 181,542 186,989 192,598 198,376 204,327 210,457 60 Cell Phone Stipend 200 206 212 219 225 232 239 246 253 261 269 61 Medical Savings Account 400 420 441 463 486 511 536 563 591 621 652 62 Medicare Insurance 12,800 13,440 14,112 14,818 15,558 16,336 17,153 18,011 18,911 19,857 20,850 63 Workers Compensation 1,000 1,050 1,103 1,158 1,216 1,276 1,340 1,407 1,477 1,551 1,629 64 Conferences & Meetings 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 19,572 20,159 65 Auto Mileage 200 206 212 219 225 232 239 246 253 261 269 66 Uniforms & Safety Gear 10,500 10,815 11,139 11,474 11,818 12,172 12,538 12,914 13,301 13,700 14,111 67 Dues,Membrshps & Subscrpt 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 6,720 68 Office Supplies 2,500 2,575 2,652 2,732 2,814 2,898 2,985 3,075 3,167 3,262 3,360 69 Special Departmental 375,000 386,250 397,838 409,773 422,066 434,728 447,770 461,203 475,039 489,290 503,969 70 Small Tools 8,000 8,240 8,487 8,742 9,004 9,274 9,552 9,839 10,134 10,438 10,751 71 Equipment Rental 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 72 Buildings & Grounds Mtce 8,000 8,240 8,487 8,742 9,004 9,274 9,552 9,839 10,134 10,438 10,751 73 Well & Pump Maintenance 75,000 77,250 79,568 81,955 84,413 86,946 89,554 92,241 95,008 97,858 100,794 74 Water Charges 8,500 8,925 9,371 9,840 10,332 10,848 11,391 11,960 12,558 13,186 13,846 75 Electricity Charges 500,000 525,000 551,250 578,813 607,753 638,141 670,048 703,550 738,728 775,664 814,447 76 Natural Gas 500 525 551 579 608 638 670 704 739 776 814 77 Telephone Charges 1,900 1,995 2,095 2,199 2,309 2,425 2,546 2,673 2,807 2,948 3,095 78 Wireless 11,500 12,075 12,679 13,313 13,978 14,677 15,411 16,182 16,991 17,840 18,732 79 Contractual Services 925,000 952,750 981,333 1,010,772 1,041,096 1,072,329 1,104,498 1,137,633 1,171,762 1,206,915 1,243,123 80 Financial Services 1,200 1,236 1,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566 1,613 81 Administrative Overhead 556,360 573,051 590,242 607,950 626,188 644,974 664,323 684,253 704,780 725,924 747,701 82 Property Taxes 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 1,344 83 Vehicle Operations & Mtce 94,300 97,129 100,043 103,044 106,135 109,320 112,599 115,977 119,456 123,040 126,731 84 Vehicle Replacement Chrgs 125,400 129,162 133,037 137,028 141,139 145,373 149,734 154,226 158,853 163,619 168,527 85 Computer Replacement Chrg 3,200 3,296 3,395 3,497 3,602 3,710 3,821 3,936 4,054 4,175 4,301 86 Computing Operations 73,300 75,499 77,764 80,097 82,500 84,975 87,524 90,150 92,854 95,640 98,509 87 Self-Ins Expenses 323,644 333,353 343,354 353,655 364,264 375,192 386,448 398,041 409,983 422,282 434,950 88 Self-Ins Settlements 30,000 30,900 31,827 32,782 33,765 34,778 35,822 36,896 38,003 39,143 40,317 89 Equipment 50,000 51,500 53,045 54,636 56,275 57,964 59,703 61,494 63,339 65,239 67,196 90 Automotive Equipment 80,500 82,915 85,402 87,965 90,603 93,322 96,121 99,005 101,975 105,034 108,185 91 Building/Improvements-Construction 30,000 30,900 31,827 32,782 33,765 34,778 35,822 36,896 38,003 39,143 40,317 92 Total Water $ 4,589,404 $ 4,741,876 $ 4,899,662 $ 5,062,958 $ 5,231,968 $ 5,406,904 $ 5,587,987 $ 5,775,447 $ 5,969,522 $ 6,170,459 $ 6,378,517 Variable Operating Expenses
93 Water Purchases $ 5,500,000 $ 5,775,000 $ 6,063,750 $ 6,366,938 $ 6,685,284 $ 7,019,549 $ 7,370,526 $ 7,739,052 $ 8,126,005 $ 8,532,305 $ 8,958,920 94 Total Operating Expenses $ 11,139,404 $ 11,602,728 $ 12,086,409 $ 12,591,380 $ 13,118,620 $ 13,669,151 $ 14,244,047 $ 14,844,431 $ 15,471,480 $ 16,126,426 $ 16,810,561
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 47 Projection of Cash Outflows Schedule 3-W 3 of 3
Transfers Out
95 Transfer Out to Fund 121 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 96 Transfers to Rate Stabilization 222,222 222,222 - - - - - - - - - 97 Total Transfers Out $ 351,322 $ 351,322 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 Debt Service
98 2019 Bonds 1,402,244 1,401,369 1,398,236 1,399,292 1,395,588 1,395,257 1,394,949 1,392,800 1,390,583 1,397,496 1,398,306 Total Debt Service $ 1,402,244 $ 1,401,369 $ 1,398,236 $ 1,399,292 $ 1,395,588 $ 1,395,257 $ 1,394,949 $ 1,392,800 $ 1,390,583 $ 1,397,496 $ 1,398,306 99 Total Personal Services $ 2,017,800 $ 2,087,028 $ 2,158,768 $ 2,233,116 $ 2,310,174 $ 2,390,046 $ 2,472,844 $ 2,558,680 $ 2,647,674 $ 2,739,949 $ 2,835,635 100 Personal Services Execution Percentage 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 101 Total: Personal Servies Funding Level $ 1,916,910 $ 1,982,677 $ 2,050,829 $ 2,121,460 $ 2,194,665 $ 2,270,544 $ 2,349,202 $ 2,430,746 $ 2,515,290 $ 2,602,951 $ 2,693,853 102 Total: Fixed Operating Expenses $ 3,069,204 $ 3,161,280 $ 3,256,119 $ 3,353,802 $ 3,454,416 $ 3,558,049 $ 3,664,790 $ 3,774,734 $ 3,887,976 $ 4,004,615 $ 4,124,754 103 Fixed Operating Expenses Execution Percentage 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 104 Total: Fixed Operating Expenses Funding Level $ 2,915,744 $ 3,003,216 $ 3,093,313 $ 3,186,112 $ 3,281,695 $ 3,380,146 $ 3,481,551 $ 3,585,997 $ 3,693,577 $ 3,804,384 $ 3,918,516 105 Total: Variable Operating Expenses - All Depts $ 6,022,400 $ 6,323,520 $ 6,639,696 $ 6,971,681 $ 7,320,265 $ 7,686,278 $ 8,070,592 $ 8,474,122 $ 8,897,828 $ 9,342,719 $ 9,809,855 106 Variable Operating Expenses Execution Percentage 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 107 Total: Variable Operating Expenses Funding Level $ 5,721,280 $ 6,007,344 $ 6,307,711 $ 6,623,097 $ 6,954,252 $ 7,301,964 $ 7,667,062 $ 8,050,416 $ 8,452,936 $ 8,875,583 $ 9,319,362 108 Total: Capital Outlay Expenses - All Depts $ 30,000 $ 30,900 $ 31,827 $ 32,782 $ 33,765 $ 34,778 $ 35,822 $ 36,896 $ 38,003 $ 39,143 $ 40,317 109 Capital Outlay Expenses Execution Percentage 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 110 Total: Capital Outlay Expenses Funding Level $ 30,000 $ 30,900 $ 31,827 $ 32,782 $ 33,765 $ 34,778 $ 35,822 $ 36,896 $ 38,003 $ 39,143 $ 40,317 111 Total O&M Cash Outflow $ 12,337,499 $ 12,776,828 $ 13,011,016 $ 13,491,842 $ 13,989,065 $ 14,511,789 $ 15,057,686 $ 15,625,954 $ 16,219,489 $ 16,848,658 $ 17,499,454
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 48 Projection of Cash Outflows Schedule 3-S 1 of 3
Expense Line Item FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Human Resources
1 Full Time Salaries $ 20,900 $ 21,527 $ 22,173 $ 22,838 $ 23,523 $ 24,229 $ 24,956 $ 25,704 $ 26,475 $ 27,270 $ 28,088 2 Overtime 100 103 106 109 113 116 119 123 127 130 134
3 Administrative Leave Cash Out 200 206 212 219 225 232 239 246 253 261 269 4 Sick Leave Buy Back 400 412 424 437 450 464 478 492 507 522 538 5 Annual Vacation Cash Out 500 515 530 546 563 580 597 615 633 652 672 6 PERS Retirement 2,800 2,940 3,087 3,241 3,403 3,574 3,752 3,940 4,137 4,344 4,561 7 PERS Monthly Employer UAL Payment 7,400 7,770 8,159 8,566 8,995 9,444 9,917 10,413 10,933 11,480 12,054 8 Employee Group Insurance 3,800 3,990 4,190 4,399 4,619 4,850 5,092 5,347 5,614 5,895 6,190 9 Medical Savings Account 100 105 110 116 122 128 134 141 148 155 163 10 Medicare Insurance 400 420 441 463 486 511 536 563 591 621 652 11 Total Human Resources $ 36,600 $ 37,988 $ 39,432 $ 40,935 $ 42,499 $ 44,126 $ 45,820 $ 47,583 $ 49,419 $ 51,330 $ 53,320 Finance
12 Full Time Salaries $ 245,700 $ 253,071 $ 260,663 $ 268,483 $ 276,538 $ 284,834 $ 293,379 $ 302,180 $ 311,245 $ 320,583 $ 330,200 13 Part-Time Salaries 11,600 11,948 12,306 12,676 13,056 13,448 13,851 14,267 14,695 15,135 15,589 14 Overtime 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 15 Administrative Leave Cash Out 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 2,688 16 Sick Leave Buy Back 1,400 1,442 1,485 1,530 1,576 1,623 1,672 1,722 1,773 1,827 1,881 17 Annual Vacation Cash Out 1,800 1,854 1,910 1,967 2,026 2,087 2,149 2,214 2,280 2,349 2,419 18 PERS Retirement 21,400 22,470 23,594 24,773 26,012 27,312 28,678 30,112 31,618 33,198 34,858 19 PERS Monthly Employer UAL Payment 13,500 14,175 14,884 15,628 16,409 17,230 18,091 18,996 19,946 20,943 21,990 20 Employee Group Insurance 50,800 53,340 56,007 58,807 61,748 64,835 68,077 71,481 75,055 78,807 82,748 21 Vehicle Allowance 800 824 849 874 900 927 955 984 1,013 1,044 1,075 22 Cell Phone Stipend 200 206 212 219 225 232 239 246 253 261 269 23 Medical Savings Account 400 420 441 463 486 511 536 563 591 621 652 24 Medicare Insurance 3,800 3,990 4,190 4,399 4,619 4,850 5,092 5,347 5,614 5,895 6,190 25 Deferred Compensation 500 515 530 546 563 580 597 615 633 652 672 26 Tuition Reimbursement 800 824 849 874 900 927 955 984 1,013 1,044 1,075 27 Conferences & Meetings 6,000 6,180 6,365 6,556 6,753 6,956 7,164 7,379 7,601 7,829 8,063 28 Office Supplies 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 29 Printing & Copies 10,000 10,300 10,609 10,927 11,255 11,593 11,941 12,299 12,668 13,048 13,439 30 Postage 35,500 36,565 37,662 38,792 39,956 41,154 42,389 43,661 44,970 46,319 47,709 31 Special Departmental 700 721 743 765 788 811 836 861 887 913 941 32 Equipment Rental 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 2,688 33 Contractual Services 64,000 65,920 67,898 69,935 72,033 74,194 76,419 78,712 81,073 83,505 86,011 34 Accounting & Auditing Svc 11,700 12,051 12,413 12,785 13,168 13,564 13,970 14,390 14,821 15,266 15,724 35 Financial Services 22,000 22,660 23,340 24,040 24,761 25,504 26,269 27,057 27,869 28,705 29,566 36 Computer Replacement Chrg 3,200 3,296 3,395 3,497 3,602 3,710 3,821 3,936 4,054 4,175 4,301 37 Computing Operations 61,100 62,933 64,821 66,766 68,769 70,832 72,957 75,145 77,400 79,722 82,113 38 Total Finance $ 576,900 $ 596,005 $ 615,773 $ 636,229 $ 657,397 $ 679,304 $ 701,978 $ 725,447 $ 749,740 $ 774,889 $ 800,925 Engineering
39 Full Time Salaries $ 193,900 $ 199,717 $ 205,709 $ 211,880 $ 218,236 $ 224,783 $ 231,527 $ 238,473 $ 245,627 $ 252,996 $ 260,585 40 Overtime 400 412 424 437 450 464 478 492 507 522 538 41 Administrative Leave Cash Out 3,100 3,193 3,289 3,387 3,489 3,594 3,702 3,813 3,927 4,045 4,166 42 Sick Leave Buy Back 4,200 4,326 4,456 4,589 4,727 4,869 5,015 5,165 5,320 5,480 5,644 43 Annual Vacation Cash Out 2,700 2,781 2,864 2,950 3,039 3,130 3,224 3,321 3,420 3,523 3,629 44 PERS Retirement 19,800 20,790 21,830 22,921 24,067 25,270 26,534 27,861 29,254 30,716 32,252 45 PERS Monthly Employer UAL Payment 29,000 30,450 31,973 33,571 35,250 37,012 38,863 40,806 42,846 44,989 47,238 46 Employee Group Insurance 25,300 26,565 27,893 29,288 30,752 32,290 33,904 35,600 37,380 39,249 41,211 47 Vehicle Allowance 1,500 1,545 1,591 1,639 1,688 1,739 1,791 1,845 1,900 1,957 2,016 48 Cell Phone Stipend 200 206 212 219 225 232 239 246 253 261 269 49 Medical Savings Account 200 210 221 232 243 255 268 281 295 310 326 50 Medicare Insurance 2,900 3,045 3,197 3,357 3,525 3,701 3,886 4,081 4,285 4,499 4,724 51 Total Engineering $ 283,200 $ 293,240 $ 303,658 $ 314,470 $ 325,692 $ 337,339 $ 349,430 $ 361,982 $ 375,014 $ 388,546 $ 402,597
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 49 Projection of Cash Outflows Schedule 3-S 2 of 3
Sewer
52 Full Time Salaries $ 143,300 $ 147,599 $ 152,027 $ 156,588 $ 161,285 $ 166,124 $ 171,108 $ 176,241 $ 181,528 $ 186,974 $ 192,583 53 Overtime 5,900 6,077 6,259 6,447 6,641 6,840 7,045 7,256 7,474 7,698 7,929 54 Administrative Leave Cash Out 3,100 3,193 3,289 3,387 3,489 3,594 3,702 3,813 3,927 4,045 4,166 55 Sick Leave Buy Back 5,500 5,665 5,835 6,010 6,190 6,376 6,567 6,764 6,967 7,176 7,392 56 Annual Vacation Cash Out 2,900 2,987 3,077 3,169 3,264 3,362 3,463 3,567 3,674 3,784 3,897 57 PERS Retirement 16,600 17,430 18,302 19,217 20,177 21,186 22,246 23,358 24,526 25,752 27,040 58 PERS Monthly Employer UAL Payment 33,700 35,385 37,154 39,012 40,963 43,011 45,161 47,419 49,790 52,280 54,894 59 Employee Group Insurance 32,300 33,915 35,611 37,391 39,261 41,224 43,285 45,449 47,722 50,108 52,613 60 Cell Phone Stipend 500 515 530 546 563 580 597 615 633 652 672 61 Medical Savings Account 100 105 110 116 122 128 134 141 148 155 163 62 Medicare Insurance 2,200 2,310 2,426 2,547 2,674 2,808 2,948 3,096 3,250 3,413 3,584 63 Workers Compensation 1,000 1,050 1,103 1,158 1,216 1,276 1,340 1,407 1,477 1,551 1,629 64 Tuition Reimbursement 500 515 530 546 563 580 597 615 633 652 672 65 Conferences & Meetings 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 19,572 20,159 66 Auto Mileage 100 103 106 109 113 116 119 123 127 130 134 67 Uniforms & Safety Gear 10,500 10,815 11,139 11,474 11,818 12,172 12,538 12,914 13,301 13,700 14,111 68 Dues,Membrshps & Subscrpt 3,000 3,090 3,183 3,278 3,377 3,478 3,582 3,690 3,800 3,914 4,032 69 Office Supplies 1,000 1,030 1,061 1,093 1,126 1,159 1,194 1,230 1,267 1,305 1,344 70 Special Departmental 15,000 15,450 15,914 16,391 16,883 17,389 17,911 18,448 19,002 19,572 20,159 71 Small Tools 5,000 5,150 5,305 5,464 5,628 5,796 5,970 6,149 6,334 6,524 6,720 72 Pension Trust Contribution 50,000 52,500 55,125 57,881 60,775 63,814 67,005 70,355 73,873 77,566 81,445 73 Equipment Rental 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 2,688 74 Buildings & Grounds Mtce 8,000 8,240 8,487 8,742 9,004 9,274 9,552 9,839 10,134 10,438 10,751 75 Well & Pump Maintenance 30,000 30,900 31,827 32,782 33,765 34,778 35,822 36,896 38,003 39,143 40,317 76 Electricity Charges 100,000 105,000 110,250 115,763 121,551 127,628 134,010 140,710 147,746 155,133 162,889 77 Natural Gas 500 525 551 579 608 638 670 704 739 776 814 78 Telephone Charges 1,200 1,260 1,323 1,389 1,459 1,532 1,608 1,689 1,773 1,862 1,955 79 Wireless 11,500 12,075 12,679 13,313 13,978 14,677 15,411 16,182 16,991 17,840 18,732 80 Contractual Services 2,990,000 3,079,700 3,172,091 3,267,254 3,365,271 3,466,229 3,570,216 3,677,323 3,787,643 3,901,272 4,018,310 81 Financial Services 2,000 2,060 2,122 2,185 2,251 2,319 2,388 2,460 2,534 2,610 2,688 82 Administrative Overhead 350,200 360,706 371,527 382,673 394,153 405,978 418,157 430,702 443,623 456,932 470,640 83 Vehicle Operations & Mtce 48,700 50,161 51,666 53,216 54,812 56,457 58,150 59,895 61,692 63,542 65,449 84 Vehicle Replacement Chrgs 125,400 129,162 133,037 137,028 141,139 145,373 149,734 154,226 158,853 163,619 168,527 85 Computer Replacement Chrg 4,100 4,223 4,350 4,480 4,615 4,753 4,896 5,042 5,194 5,350 5,510 86 Computing Operations 61,100 62,933 64,821 66,766 68,769 70,832 72,957 75,145 77,400 79,722 82,113 87 Automotive Equipment 80,500 82,915 85,402 87,965 90,603 93,322 96,121 99,005 101,975 105,034 108,185 88 Building/Improvements-Construction 50,000 51,500 53,045 54,636 56,275 57,964 59,703 61,494 63,339 65,239 67,196 89 Total Sewer $ 4,212,400 $ 4,343,754 $ 4,479,298 $ 4,619,169 $ 4,763,512 $ 4,912,473 $ 5,066,205 $ 5,224,868 $ 5,388,624 $ 5,557,643 $ 5,732,101 90 Total Operating Expenses $ 5,109,100 $ 5,270,987 $ 5,438,161 $ 5,610,803 $ 5,789,099 $ 5,973,242 $ 6,163,433 $ 6,359,880 $ 6,562,797 $ 6,772,408 $ 6,988,943
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 50 Projection of Cash Outflows Schedule 3-S 3 of 3
Transfers Out
91 Transfer Out to Fund 121 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 92 Total Transfers Out $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 $ 129,100 Debt Service
93 2019 Loan $ 1,643,407 $ 1,638,480 $ 1,638,644 $ 1,636,659 $ 1,637,390 $ 1,689,813 $ 1,687,961 $ 1,685,586 $ 1,684,977 $ 1,685,852 $ 1,683,070 94 Total Debt Service $ 1,643,407 $ 1,638,480 $ 1,638,644 $ 1,636,659 $ 1,637,390 $ 1,689,813 $ 1,687,961 $ 1,685,586 $ 1,684,977 $ 1,685,852 $ 1,683,070 Total Personal Services
95 Total Personal Services All Departments $ 971,900 $ 1,007,407 $ 1,044,297 $ 1,082,626 $ 1,122,456 $ 1,163,848 $ 1,206,868 $ 1,251,584 $ 1,298,066 $ 1,346,390 $ 1,396,633 96 Personal Services Execution Percentage 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 97 Total: Personal Servies Funding Level $ 923,305 $ 957,037 $ 992,082 $ 1,028,495 $ 1,066,333 $ 1,105,656 $ 1,146,525 $ 1,189,005 $ 1,233,163 $ 1,279,071 $ 1,326,801 Total: Fixed Operating Expenses
98 Total Fixed Operating All Departments $ 4,024,000 $ 4,144,720 $ 4,269,062 $ 4,397,133 $ 4,529,047 $ 4,664,919 $ 4,804,866 $ 4,949,012 $ 5,097,483 $ 5,250,407 $ 5,407,920 99 Fixed Operating Expenses Execution Percentage 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 100 Total: Fixed Operating Expenses Funding Level $ 3,822,800 $ 3,937,484 $ 4,055,609 $ 4,177,277 $ 4,302,595 $ 4,431,673 $ 4,564,623 $ 4,701,562 $ 4,842,609 $ 4,987,887 $ 5,137,524 Total: Variable Operating Expenses - All Depts
101 Total Variable Operating All Departments $ 113,200 $ 118,860 $ 124,803 $ 131,043 $ 137,595 $ 144,475 $ 151,699 $ 159,284 $ 167,248 $ 175,610 $ 184,391 102 Variable Operating Expenses Execution Percentage 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 103 Total: Variable Operating Expenses Funding Level $ 107,540 $ 112,917 $ 118,563 $ 124,491 $ 130,716 $ 137,251 $ 144,114 $ 151,320 $ 158,886 $ 166,830 $ 175,171
104 Total O&M Cash Outflow $ 6,626,152 $ 6,775,018 $ 6,933,997 $ 7,096,022 $ 7,266,134 $ 7,493,493 $ 7,672,323 $ 7,856,572 $ 8,048,734 $ 8,248,739 $ 8,451,666 Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 51 Cost Escalation Factors Schedule 4-W
Operating Expense Category Code Inflation Factor FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Full Time Salaries 30100 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Part-Time Salaries 30105 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Part Time Salaries - 32 Hour 30106 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Part Time Salaries - 20 Hour 30107 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Covid-19 Related Salaries 30108 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Overtime 30110 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% PERS Retirement 30200 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% PERS Monthly Employer UAL Payment 30201 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% PERS Retirement & Contra Account 30203 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Employee Group Insurance 30205 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Vehicle Allowance 30210 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Cell Phone Stipend 30212 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Medical Savings Account 30215 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Medicare Insurance 30220 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Administrative Leave Cash Out 30221 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Taken - Part-Time 30224 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Buy Back 30225 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Taken 30226 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Payoff 30227 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Comp Taken 30228 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Comp Payoff 30229 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Annual Vacation Cash Out 30230 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Vacation Taken 30231 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Vacation Payoff 30232 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Other Personnel Services 30234 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Deferred Compensation 30235 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Workers Compensation 30245 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Tuition Reimbursement 30255 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Conferences & Meetings 30300 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Auto Mileage 30305 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Uniforms & Safety Gear 30310 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Dues,Membrshps & Subscrpt 30320 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Office Supplies 30400 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Printing & Copies 30405 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Postage 30410 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Special Departmental 30415 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Small Tools 30425 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Small Office Equipment 30430 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Retiree Medical Insurance Contribution 30470 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Pension Trust Contribution 30471 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Office Equipment Maintnce 32100 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Equipment Rental 32105 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Buildings & Grounds Mtce 32200 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Well & Pump Maintenance 32450 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Utilities 33100 Fuel, Utilities, Chemicals 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Chino Pump Tax 33115 Fuel, Utilities, Chemicals 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Contractual Services 34100 Contract Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Accounting & Auditing Svc 34125 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Financial Services 34130 Contract Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Administrative Overhead 35150 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Property Taxes 35205 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Water Purchase 33105 Water Purchase 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Vehicle Operations & Mtce 42100 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Vehicle Replacement Chrgs 42105 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Computer Replacement Chrg 42110 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Computing Operations 42115 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Self-Ins Expenses 42220 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Self-Ins Settlements 42225 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Equipment 43100 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Automotive Equipment 43110 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Building/Improvements-Construction 43115 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Weighted Average Increase in O&M Expenses ¹ 3.17% 3.17% 3.17% 3.18% 3.18% 3.18% 3.19% 3.19% 3.19% 3.20% ¹ The Weighted Average Increase in O&M Expenses is reflective of the cost escalation factors presented on this schedule and the cost execution factors on Schedule 1.
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 52 Cost Escalation Factors Schedule 4-S
Operating Expense Category Code Inflation Factor FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Full Time Salaries 30100 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Overtime 30200 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Administrative Leave Cash Out 30201 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Buy Back 30203 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Taken 30205 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Annual Vacation Cash Out 30212 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Vacation Taken 30215 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% PERS Retirement 30220 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% PERS Monthly Employer UAL Payment 30255 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Employee Group Insurance 30105 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Cell Phone Stipend 30107 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Medical Savings Account 30106 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Medicare Insurance 30108 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Tuition Reimbursement 30110 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Full Time Salaries 30221 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Part-Time Salaries 30224 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Part Time Salaries - 20 Hour 30225 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Part Time Salaries - 32 Hour 30226 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Covid-19 Related Salaries 30227 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Overtime 30228 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Administrative Leave Cash Out 30229 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Taken - Part-Time 30230 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Buy Back 30231 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Taken 30232 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Sick Leave Payoff 30234 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Vacation Payoff 30210 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% PERS Retirement & Contra Account 30235 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Vehicle Allowance 30300 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Cell Phone Stipend 30400 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Medical Savings Account 30405 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Medicare Insurance 30410 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Deferred Compensation 30415 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Tuition Reimbursement 30430 Salaries & Wages 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Conferences & Meetings 32100 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Office Supplies 32105 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Printing & Copies 34100 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Postage 34125 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Special Departmental 34130 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Small Office Equipment 35100 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Office Equipment Maintnce 35515 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Contractual Services 42110 Contract Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Accounting & Auditing Svc 42115 Contract Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% PERS Monthly Employer UAL Payment 30245 Retirement 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Cell Phone Stipend 30305 Admin Services 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Medical Savings Account 30310 Health Insurance 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Telephone Charges 35110 Fuel, Utilities, Chemicals 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% Vehicle Replacement Chrgs 43110 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Computer Replacement Chrg 43115 Repair & Maintenance 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Weighted Average Increase in O&M Expenses ¹ 4.16% 4.17% 4.18% 4.19% 4.20% 4.21% 4.22% 4.23% 4.24% 4.25% ¹ The Weighted Average Increase in O&M Expenses is reflective of the cost escalation factors presented on this schedule and the cost execution factors on Schedule 1.
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 53 Capital Improvement Program (CIP) Schedule 5-W
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Total Cost 1 Bluff 8" Water Mainline Replacement $ 125,000 $ - $ - $ - $ 1,600,000 $ - $ - $ - $ - $ - $ - $ 1,725,000 2 Caballeros & Indian Horse Mainline - - - 1,000,000 - - - - - - - $ 1,000,000 3 Corona Ave Watermain Replacement - - 75,000 875,000 - - - - - - - $ 950,000 4 Corydon 12" Water Mainline Replacement 100,000 1,125,000 - - 1,125,000 - - - - - - $ 2,350,000 5 Crestview Drive Mainline Replacement - - - - 100,000 750,000 - - - - - $ 850,000 6 East Street Mainline Replacement - - - 50,000 400,000 - - - - - - $ 450,000 7 Fifth Street Transmission Mainline - 1,350,000 - - - - - - - - - $ 1,350,000 8 Hamner Ave Mainline Replacement - - - - 150,000 1,750,000 - - - - - $ 1,900,000 9 Hydrant & Valve Installation & Replacement 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 $ 1,100,000 10 Meter Replacement Program Project - 1,600,000 1,600,000 1,600,000 - - - - - - - $ 4,800,000 11 North Dr Transmission Mainline Project - - 100,000 750,000 - - - - - - - $ 850,000 12 North Norco Channel Water Relocations 300,000 - - - - - - - - - - $ 300,000 13 PFAS Treatment System 900,000 2,000,000 1,500,000 - - - - - - - - $ 4,400,000 14 Reservoir No. 2 Replacement Project - - - - - - - 400,000 4,600,000 - - $ 5,000,000 15 Riding Ring Rd Mainline Replacement - - - - - 1,000,000 - - - - - $ 1,000,000 16 Roundup Rd & Corral St Mainline - 200,000 1,800,000 - - - - - - - - $ 2,000,000 17 Sixth St 12" Water Mainline Replacement 100,000 - - 1,475,000 1,475,000 - - - - - - $ 3,050,000 18 Temescal Ave Mainline Replacement 1,800,000 - - - - - - - - - - $ 1,800,000 19 Trail Street Watermain Replacement - - - - - - 150,000 1,450,000 - - - $ 1,600,000 20 Unspecified Future Capital - - - - - 2,000,000 4,000,000 2,000,000 - 4,000,000 4,000,000 $ 16,000,000 21 Total CIP Budget (in current dollars) $ 3,425,000 $ 6,375,000 $ 5,175,000 $ 5,850,000 $ 4,950,000 $ 5,600,000 $ 4,250,000 $ 3,950,000 $ 4,700,000 $ 4,100,000 $ 4,100,000 $ 52,475,000 22 Annual CIP Execution Percentage 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 23 Final CIP Funding Level $ 3,425,000 $ 6,375,000 $ 5,175,000 $ 5,850,000 $ 4,950,000 $ 5,600,000 $ 4,250,000 $ 3,950,000 $ 4,700,000 $ 4,100,000 $ 4,100,000 $ 52,475,000
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 54 Capital Improvement Program (CIP) Schedule 5-S
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Total Cost 1 Corral Sewer Lift Station Replacement $ - $ - $ - $ - $ 200,000 $ 1,700,000 $ - $ - $ - $ - $ - $ 1,900,000 2 Grulla Sewer Lift Station Replacement 1,900,000 - - - - - - - - - - $ 1,900,000 3 Old Hamner Road Sewer Lift Station Replacem 150,000 - 1,850,000 - - - - - - - - $ 2,000,000 4 Oldenburg Sewer Lift Station Replacement 825,000 - - - - - - - - - - $ 825,000 5 Pacific Sewer Lift Station Replacement - - - 200,000 1,700,000 - - - - - - $ 1,900,000 6 Parkridge-Mountain Mainline Replacement - 1,500,000 - - - - - - - - - $ 1,500,000 7 Sewer Lift Station No. 10 Replacement 825,000 - - - - - - - - - - $ 825,000 8 Sewer Lift Station No. 9 Replacement 150,000 - - 1,850,000 - - - - - - - $ 2,000,000 9 Shawnee Sewer Lift Station Replacement 950,000 - - - - - - - - - - $ 950,000 10 Unspecified Manhole Rehabilitation 50,000 - - - - - - - - - - $ 50,000 11 WRCRWA Capital Improvements 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 $ 16,500,000 12 Unspecified Capital - - - - - - 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 $ 5,000,000 13 Total CIP Budget (in current dollars) $ 6,350,000 $ 3,000,000 $ 3,350,000 $ 3,550,000 $ 3,400,000 $ 3,200,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 35,350,000 14 Annual CIP Execution Percentage 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 15 Final CIP Funding Level $ 6,350,000 $ 3,000,000 $ 3,350,000 $ 3,550,000 $ 3,400,000 $ 3,200,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 35,350,000
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 55 Water Fund - Assumptions Schedule 6-W
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Rate Increase Adoption Date 7/1/2024 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 7/1/2031 7/1/2032 7/1/2033 7/1/2034 Annual Growth
Water
Ending # of ERCs 10,356 10,382 10,408 10,434 10,460 10,486 10,513 10,539 10,565 10,592 10,618 ERC Growth N/A 26 26 26 26 26 26 26 26 26 26
% Change in ERCs N/A 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% % Change in Usage N/A -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% Capital Fees
Water Capital Fees $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 $4,662.00 Average Annual Interest Earnings Rate
On Fund Balances 4.50% 4.00% 3.50% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Operating Budget Reserve
Target (Number of Months of Reserve) 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Operating Budget Execution Percentage
Personal Services 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Variable Operations and Maintenance 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Fixed Operations and Maintenance 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Capital Outlay 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Rate Stabilization Reserve Amount $ 1,777,776 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 56 Sewer Fund - Assumptions Schedule 6-S
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Rate Increase Adoption Date 7/1/2024 7/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 7/1/2030 7/1/2031 7/1/2032 7/1/2033 7/1/2034 Annual Growth
Sewer
Ending # of ERCs 7,094 7,112 7,129 7,147 7,165 7,183 7,201 7,219 7,237 7,255 7,273 % Change in ERCs N/A 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% % Change in Usage N/A -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% -0.25% Connection Fees
Sewer Connection Fees $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 $6,134.00 Average Annual Interest Earnings Rate
On Fund Balances 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Operating Budget Reserve
Target (Number of Months of Reserve) 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 Operating Budget Execution Percentage
Personal Services 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Variable Operations and Maintenance 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Fixed Operations and Maintenance 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% 95% Capital Outlay 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 57 Pro Forma Schedule 7-W
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 1 Operating Revenue
2 Water, Rate Revenue $ 12,016,700 $ 12,016,700 $ 13,098,167 $ 14,277,052 $ 15,419,368 $ 16,344,792 $ 17,325,867 $ 18,019,418 $ 18,740,849 $ 19,491,286 $ 20,271,900 3 Change in Revenue From Growth - (33) 46 140 248 365 496 629 772 925 1,090 4 Subtotal $ 12,016,700 $ 12,016,667 $ 13,098,213 $ 14,277,192 $ 15,419,616 $ 16,345,158 $ 17,326,364 $ 18,020,047 $ 18,741,621 $ 19,492,211 $ 20,272,990 5 Weighted Average Rate Increase 0.00% 9.00% 9.00% 8.00% 6.00% 6.00% 4.00% 4.00% 4.00% 4.00% 4.00% 6 Additional Rate Revenue From Rate Increase - 1,081,500 1,178,839 1,142,175 925,177 980,709 693,055 720,802 749,665 779,688 810,920 7 Total Rate Revenue $ 12,016,700 $ 13,098,167 $ 14,277,052 $ 15,419,368 $ 16,344,792 $ 17,325,867 $ 18,019,418 $ 18,740,849 $ 19,491,286 $ 20,271,900 $ 21,083,909 8 Plus: Other Operating Revenue 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 9 Equals: Total Operating Revenue $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 $ 277,800 10 Less: Operating Expenses
11 Personal Services $ (1,916,910) $ (1,982,677) $ (2,050,829) $ (2,121,460) $ (2,194,665) $ (2,270,544) $ (2,349,202) $ (2,430,746) $ (2,515,290) $ (2,602,951) $ (2,693,853) 12 Variable Operations & Maintenance Costs (5,721,280) (6,007,344) (6,307,711) (6,623,097) (6,954,252) (7,301,964) (7,667,062) (8,050,416) (8,452,936) (8,875,583) (9,319,362) 13 Operations & Maintenance Costs (2,915,744) (3,003,216) (3,093,313) (3,186,112) (3,281,695) (3,380,146) (3,481,551) (3,585,997) (3,693,577) (3,804,384) (3,918,516) 14 Equals: Net Operating Income $ 1,740,567 $ 2,382,730 $ 3,102,999 $ 3,766,499 $ 4,191,981 $ 4,651,013 $ 4,799,404 $ 4,951,491 $ 5,107,283 $ 5,266,781 $ 5,429,978 15 Plus: Non-Operating Income/(Expense)
16 Interest Income $ 283,316 $ 280,495 $ 241,580 $ 183,685 $ 197,093 $ 203,450 $ 175,597 $ 177,373 $ 238,563 $ 275,423 $ 258,922 17 Capital Fees 120,403 120,704 121,005 121,308 121,611 121,915 122,220 122,525 122,832 123,139 123,447 18 Equals: Net Income $ 2,144,286 $ 2,783,929 $ 3,465,585 $ 4,071,492 $ 4,510,685 $ 4,976,378 $ 5,097,220 $ 5,251,389 $ 5,468,678 $ 5,665,343 $ 5,812,347 19 Less: Revenues Excluded From Coverage Test
20 Capital Fees $ (120,403) $ (120,704) $ (121,005) $ (121,308) $ (121,611) $ (121,915) $ (122,220) $ (122,525) $ (122,832) $ (123,139) $ (123,447) 21 Equals: Net Income Available For Cash Flow Test $ 2,023,883 $ 2,663,225 $ 3,344,580 $ 3,950,184 $ 4,389,073 $ 4,854,463 $ 4,975,000 $ 5,128,863 $ 5,345,846 $ 5,542,205 $ 5,688,901 22 Cash Flow Test
23 Net Income Available For Debt Service $ 2,023,883 $ 2,663,225 $ 3,344,580 $ 3,950,184 $ 4,389,073 $ 4,854,463 $ 4,975,000 $ 5,128,863 $ 5,345,846 $ 5,542,205 $ 5,688,901 24 Less: Non-Operating Expenditures
25 Net Interfund Transfers (In - Out) (351,322) (351,322) (129,100) (129,100) (129,100) (129,100) (129,100) (129,100) (129,100) (129,100) (129,100) 26 Net Debt Service Payment (1,402,244) (1,532,870) (1,691,813) (1,837,734) (2,012,576) (2,052,872) (2,102,636) (2,100,487) (2,236,186) (2,413,081) (2,413,890) 27 Capital Outlay (30,000) (30,900) (31,827) (32,782) (33,765) (34,778) (35,822) (36,896) (38,003) (39,143) (40,317) 28 Net Cash Flow $ 240,317 $ 748,133 $ 1,491,840 $ 1,950,568 $ 2,213,632 $ 2,637,713 $ 2,707,442 $ 2,862,380 $ 2,942,557 $ 2,960,881 $ 3,105,593 29 Unrestricted Reserve Fund Test
30 Balance At Beginning Of Fiscal Year $ 4,509,096 $ 4,749,413 $ 5,497,546 $ 4,307,056 $ 3,938,626 $ 5,200,897 $ 4,362,438 $ 3,344,011 $ 4,480,828 $ 7,423,385 $ 6,938,180 31 Cash Flow Surplus/(Deficit) 240,317 748,133 1,491,840 1,950,568 2,213,632 2,637,713 2,707,442 2,862,380 2,942,557 2,960,881 3,105,593 32 Projects Designated To Be Paid With Cash - - - - - - (3,725,869) - - - - 33 Projects Paid With Non Specified Funds - - (2,682,330) (2,318,998) (951,361) (3,476,172) - (1,725,563) - (3,446,086) (3,720,459) 34 Balance At End Of Fiscal Year $ 4,749,413 $ 5,497,546 $ 4,307,056 $ 3,938,626 $ 5,200,897 $ 4,362,438 $ 3,344,011 $ 4,480,828 $ 7,423,385 $ 6,938,180 $ 6,323,313 35 Minimum Working Capital Reserve Target 2,638,483 2,748,309 2,862,963 2,982,667 3,107,653 3,238,164 3,374,454 3,516,790 3,665,451 3,820,730 3,982,933 36 Excess/(Deficiency) Of Working Capital To Target $ 2,110,930 $ 2,749,237 $ 1,444,093 $ 955,959 $ 2,093,244 $ 1,124,275 $ (30,442) $ 964,039 $ 3,757,934 $ 3,117,450 $ 2,340,381
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 58 Pro Forma Schedule 7-S
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 1 Operating Revenue
2 Sewer, Rate Revenue $ 7,134,015 $ 7,134,015 $ 7,492,992 $ 7,870,081 $ 8,187,472 $ 8,517,717 $ 8,861,336 $ 9,041,588 $ 9,225,564 $ 9,413,341 $ 9,605,000 3 Change in Revenue From Growth - 2,168 2,323 2,489 2,640 2,799 2,966 3,082 3,202 3,325 3,452 4 Subtotal $ 7,134,015 $ 7,136,183 $ 7,495,315 $ 7,872,570 $ 8,190,112 $ 8,520,515 $ 8,864,302 $ 9,044,671 $ 9,228,766 $ 9,416,666 $ 9,608,451 5 Weighted Average Rate Increase 0.00% 5.00% 5.00% 4.00% 4.00% 4.00% 2.00% 2.00% 2.00% 2.00% 2.00% 6 Additional Rate Revenue From Rate Increase - 356,809 374,766 314,903 327,604 340,821 177,286 180,893 184,575 188,333 192,169 7 Total Rate Revenue $ 7,134,015 $ 7,492,992 $ 7,870,081 $ 8,187,472 $ 8,517,717 $ 8,861,336 $ 9,041,588 $ 9,225,564 $ 9,413,341 $ 9,605,000 $ 9,800,621 8 Plus: Other Operating Revenue 361,200 365,607 365,607 365,607 365,607 365,607 365,607 365,607 365,607 365,607 365,607 9 Equals: Total Operating Revenue $ 7,495,215 $ 7,858,599 $ 8,235,688 $ 8,553,079 $ 8,883,324 $ 9,226,943 $ 9,407,195 $ 9,591,171 $ 9,778,948 $ 9,970,607 $ 10,166,228 10 Less: Operating Expenses
11 Personal Services $ (923,305) $ (957,037) $ (992,082) $ (1,028,495) $ (1,066,333) $ (1,105,656) $ (1,146,525) $ (1,189,005) $ (1,233,163) $ (1,279,071) $ (1,326,801) 12 Variable Operations & Maintenance Costs (107,540) (112,917) (118,563) (124,491) (130,716) (137,251) (144,114) (151,320) (158,886) (166,830) (175,171) 13 Operations & Maintenance Costs (3,822,800) (3,937,484) (4,055,609) (4,177,277) (4,302,595) (4,431,673) (4,564,623) (4,701,562) (4,842,609) (4,987,887) (5,137,524) 14 Equals: Net Operating Income $ 2,641,570 $ 2,851,161 $ 3,069,435 $ 3,222,817 $ 3,383,680 $ 3,552,363 $ 3,551,934 $ 3,549,285 $ 3,544,291 $ 3,536,819 $ 3,526,731 15 Plus: Non-Operating Income/(Expense)
16 Interest Income 327,107 236,223 194,850 152,031 114,451 85,272 70,707 66,381 61,857 57,007 51,703 17 Connection Fees 108,515 108,786 109,058 109,331 109,604 109,878 110,153 110,428 110,704 110,981 111,259 18 Transfers In - - - 163,905 163,905 163,905 163,905 163,905 163,905 163,905 163,905 19 Equals: Net Income $ 3,077,192 $ 3,196,170 $ 3,373,343 $ 3,648,083 $ 3,771,641 $ 3,911,419 $ 3,896,699 $ 3,890,000 $ 3,880,758 $ 3,868,712 $ 3,853,599 20 Less: Revenues Excluded From Coverage Test
21 Connection Fees $ (108,515) $ (108,786) $ (109,058) $ (109,331) $ (109,604) $ (109,878) $ (110,153) $ (110,428) $ (110,704) $ (110,981) $ (111,259) 22 Transfers In - - - (163,905) (163,905) (163,905) (163,905) (163,905) (163,905) (163,905) (163,905) 23 Equals: Net Income Available For Debt Service $ 2,968,677 $ 3,087,384 $ 3,264,285 $ 3,374,847 $ 3,498,131 $ 3,637,635 $ 3,622,641 $ 3,615,666 $ 3,606,148 $ 3,593,826 $ 3,578,435 24 Cash Flow Test
25 Net Income Available For Debt Service $ 2,968,677 $ 3,087,384 $ 3,264,285 $ 3,374,847 $ 3,498,131 $ 3,637,635 $ 3,622,641 $ 3,615,666 $ 3,606,148 $ 3,593,826 $ 3,578,435 26 Less: Non-Operating Expenditures
27 Net Interfund Transfers (In - Out) (129,100) (129,100) (129,100) 34,805 34,805 34,805 34,805 34,805 34,805 34,805 34,805 28 Net Debt Service Payment (1,643,407) (1,638,480) (1,638,644) (1,636,659) (1,637,390) (1,689,813) (1,687,961) (1,685,586) (1,684,977) (1,685,852) (1,683,070) 29 Net Cash Flow $ 1,196,169 $ 1,319,804 $ 1,496,541 $ 1,772,994 $ 1,895,547 $ 1,982,628 $ 1,969,485 $ 1,964,885 $ 1,955,977 $ 1,942,780 $ 1,930,170 30 Unrestricted Reserve Fund Test
31 Balance At Beginning Of Fiscal Year $ 1,073,522 $ 2,269,691 $ 3,589,495 $ 5,086,036 $ 4,373,184 $ 3,256,910 $ 2,427,892 $ 2,285,902 $ 2,139,482 $ 1,984,322 $ 1,816,130 32 Cash Flow Surplus/(Deficit) 1,196,169 1,319,804 1,496,541 1,772,994 1,895,547 1,982,628 1,969,485 1,964,885 1,955,977 1,942,780 1,930,170 33 Projects Designated To Be Paid With Cash - - - - - - - - - - (2,115,542) 34 Projects Paid With Non Specified Funds - - - (2,485,845) (3,011,821) (2,811,647) (2,111,475) (2,111,305) (2,111,137) (2,110,971) - 35 Balance At End Of Fiscal Year $ 2,269,691 $ 3,589,495 $ 5,086,036 $ 4,373,184 $ 3,256,910 $ 2,427,892 $ 2,285,902 $ 2,139,482 $ 1,984,322 $ 1,816,130 $ 1,630,758 36 Minimum Working Capital Reserve Target 1,213,411 1,251,859 1,291,563 1,332,566 1,374,911 1,418,645 1,463,815 1,510,472 1,558,664 1,608,447 1,659,874 37 Excess/(Deficiency) Of Working Capital To Target $ 1,056,280 $ 2,337,636 $ 3,794,472 $ 3,040,618 $ 1,881,999 $ 1,009,246 $ 822,086 $ 629,011 $ 425,658 $ 207,684 $ (29,116)
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 59 Water Fund - Debt Service Coverage
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Revenues
Water Rate Revenue $ 12,016,700 $ 13,098,167 $ 14,277,052 $ 15,419,368 $ 16,344,792 $ 17,325,867 $ 18,019,418 $ 18,740,849 $ 19,491,286 $ 20,271,900 $ 21,083,909 Other Operating Revenue 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 277,800 Interest Income 283,316 280,495 241,580 183,685 197,093 203,450 175,597 177,373 238,563 275,423 258,922 Total Operating Revenues $ 12,577,817 $ 13,656,462 $ 14,796,433 $ 15,880,853 $ 16,819,685 $ 17,807,117 $ 18,472,815 $ 19,196,022 $ 20,007,649 $ 20,825,123 $ 21,620,631 Operating Expenses
Personal Services $ (1,916,910) $ (1,982,677) $ (2,050,829) $ (2,121,460) $ (2,194,665) $ (2,270,544) $ (2,349,202) $ (2,430,746) $ (2,515,290) $ (2,602,951) $ (2,693,853) Variable O&M $ (5,721,280) $ (6,007,344) $ (6,307,711) $ (6,623,097) $ (6,954,252) $ (7,301,964) $ (7,667,062) $ (8,050,416) $ (8,452,936) $ (8,875,583) $ (9,319,362) Fixed O&M $ (2,915,744) $ (3,003,216) $ (3,093,313) $ (3,186,112) $ (3,281,695) $ (3,380,146) $ (3,481,551) $ (3,585,997) $ (3,693,577) $ (3,804,384) $ (3,918,516) Operating Expenses $ (10,553,934) (10,993,237) (11,451,853) (11,930,669) (12,430,612) $ (12,952,654) $ (13,497,815) $ (14,067,158) $ (14,661,803) $ (15,282,919) $ (15,931,731) Net Revenues Available for Debt Service $ 2,023,883 2,663,225 3,344,580 3,950,184 $ 4,389,073 $ 4,854,463 $ 4,975,000 $ 5,128,863 $ 5,345,846 $ 5,542,205 $ 5,688,901 Senior Lien Debt Service $ 1,402,244 $ 1,532,870 $ 1,691,813 $ 1,837,734 $ 2,012,576 $ 2,052,872 $ 2,102,636 $ 2,100,487 $ 2,236,186 $ 2,413,081 $ 2,413,890 Senior Lien Debt Coverage 1.44 1.74 1.98 2.15 2.18 2.36 2.37 2.44 2.39 2.30 2.36 Minimum Debt Service Coverage 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 Net Revenues Available for Subordinate Debt Servic $ 621,639 1,130,355 1,652,767 2,112,450 2,376,497 2,801,591 2,872,364 3,028,376 3,109,660 3,129,124 3,275,010 Subordinate Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Subordinate Debt Service Coverage - - - - - - - - - - - Minimum Debt Service Coverage 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 All In Debt Service Coverage 1.44 1.74 1.98 2.15 2.18 2.36 2.37 2.44 2.39 2.30 2.36 Schedule 8-W
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 60 Sewer Fund - Debt Service Coverage
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Revenues
Sewer Rate Revenue $ 7,134,015 $ 7,492,992 $ 7,870,081 $ 8,187,472 $ 8,517,717 $ 8,861,336 $ 9,041,588 $ 9,225,564 $ 9,413,341 $ 9,605,000 $ 9,800,621 Other Operating Revenue 361,200 365,607 365,607 365,607 365,607 365,607 365,607 365,607 365,607 365,607 365,607 Interest Income 327,107 236,223 194,850 152,031 114,451 85,272 70,707 66,381 61,857 57,007 51,703 Total Operating Revenues $ 7,822,322 $ 8,094,822 $ 8,430,538 $ 8,705,110 $ 8,997,775 $ 9,312,215 $ 9,477,902 $ 9,657,552 $ 9,840,805 $ 10,027,614 $ 10,217,931 Operating Expenses
Personal Services $ (923,305) $ (957,037) $ (992,082) $ (1,028,495) $ (1,066,333) $ (1,105,656) $ (1,146,525) $ (1,189,005) $ (1,233,163) $ (1,279,071) $ (1,326,801) Variable O&M $ (107,540) $ (112,917) $ (118,563) $ (124,491) $ (130,716) $ (137,251) $ (144,114) $ (151,320) $ (158,886) $ (166,830) $ (175,171) Fixed O&M $ (3,822,800) $ (3,937,484) $ (4,055,609) $ (4,177,277) $ (4,302,595) $ (4,431,673) $ (4,564,623) $ (4,701,562) $ (4,842,609) $ (4,987,887) $ (5,137,524) Operating Expenses $ (4,853,645) (5,007,438) (5,166,253) (5,330,263) (5,499,644) $ (5,674,580) $ (5,855,262) $ (6,041,886) $ (6,234,657) $ (6,433,788) $ (6,639,496) Net Revenues Available for Debt Service $ 2,968,677 3,087,384 3,264,285 3,374,847 $ 3,498,131 $ 3,637,635 $ 3,622,641 $ 3,615,666 $ 3,606,148 $ 3,593,826 $ 3,578,435 Senior Lien Debt Service $ 1,643,407 $ 1,638,480 $ 1,638,644 $ 1,636,659 $ 1,637,390 $ 1,689,813 $ 1,687,961 $ 1,685,586 $ 1,684,977 $ 1,685,852 $ 1,683,070 Senior Lien Debt Coverage 1.81 1.88 1.99 2.06 2.14 2.15 2.15 2.15 2.14 2.13 2.13 Minimum Debt Service Coverage 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 Net Revenues Available for Subordinate Debt Servic $ 1,325,269 1,448,904 1,625,641 1,738,188 1,860,742 1,947,822 1,934,680 1,930,080 1,921,172 1,907,974 1,895,364 Subordinate Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Subordinate Debt Service Coverage - - - - - - - - - - - Minimum Debt Service Coverage 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 All In Debt Service Coverage 1.81 1.88 1.99 2.06 2.14 2.15 2.15 2.15 2.14 2.13 2.13 Schedule 8-S
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 61 FAMS - Control Panel Schedule 9-W
NORCO, CA - WATER FUND
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Water Fixed Charge 0.00% 9.00% 9.00% 8.00% 6.00% 6.00% 4.00% 3.00% 3.00% 3.00% 2.00% Water Usage Rate 0.00% 9.00% 9.00% 8.00% 6.00% 6.00% 4.00% 3.00% 3.00% 3.00% 2.00% All-In Debt Service Coverage 1.44 1.74 1.98 2.15 2.18 2.36 2.37 2.35 2.22 2.05 1.92 CIP Timing Extended Timing Fixed Charge (3/4" Meter) $47.85 $52.16 $56.85 $61.40 $65.08 $68.98 $71.74 $73.89 $76.11 $78.39 $79.96 Bond Funding Yes Usage Rate (per CCF) $2.70 $2.94 $3.20 $3.46 $3.67 $3.89 $4.05 $4.17 $4.30 $4.43 $4.52 Total Bonded $21.28M Single Family Bill (20 units) $101.85 $110.96 $120.85 $130.60 $138.48 $146.78 $152.74 $157.29 $162.11 $166.99 $170.36 $0.0M
$2.0M
$4.0M
$6.0M
$8.0M
25 26 27 28 29 30 31 32 33 34 35
Capital Fund Operating/Cash Debt
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
$6.0M
$7.0M
$8.0M
24 25 26 27 28 29 30 31 32 33 34 35
Cash Balance Minimum Balance
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
$6.0M
$7.0M
25 26 27 28 29 30 31 32 33 34 35
$0.0M
$5.0M
$10.0M
$15.0M
$20.0M
$25.0M
25 26 27 28 29 30 31 32 33 34 35
Revenues Total Expenditures
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
$6.0M
$7.0M
$8.0M
25 26 27 28 29 30 31 32 33 34 35
$0.0M
$5.0M
$10.0M
$15.0M
$20.0M
$25.0M
25 26 27 28 29 30 31 32 33 34 35
O&M CIP DEBT TO
Operating Fund
CIP Spending
Revenues vs. Expenses
CIP Funding Borrowing
Expenses by Type
CALC SAVE CTRL LAST OVR
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
25 26 27 28 29 30 31 32 33 34 35
Current Plan
Capital Fund
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
25 26 27 28 29 30 31 32 33 34 35
Current Plan
Rate Stabilization Fund
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 62 FAMS - Control Panel Schedule 9-S
NORCO, CA - SEWER FUND
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Sewer Fixed Charge 0.00% 5.00% 5.00% 4.00% 4.00% 4.00% 2.00% 2.00% 2.00% 2.00% 2.00% Sewer Usage Rate 0.00% 5.00% 5.00% 4.00% 4.00% 4.00% 2.00% 2.00% 2.00% 2.00% 2.00% All-in Debt Service Coverage 1.81 1.88 1.99 2.06 2.14 2.15 2.15 2.15 2.14 2.13 2.13 CIP Timing Extended Timing Fixed Charge (3/4" Meter) $51.00 $53.55 $56.23 $58.48 $60.82 $63.25 $64.52 $65.81 $67.13 $68.47 $69.84 Commerical Usage Rate (per CCF) $8.00 $8.40 $8.82 $9.17 $9.54 $9.92 $10.12 $10.32 $10.53 $10.74 $10.95 Single Family Bill $51.00 $53.55 $56.23 $58.48 $60.82 $63.25 $64.52 $65.81 $67.13 $68.47 $69.84
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
$6.0M
$7.0M
25 26 27 28 29 30 31 32 33 34 35
Debt Operating/Cash Sewer Facilities Improvement
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
$6.0M
24 25 26 27 28 29 30 31 32 33 34 35
Cash Balance Minimum Balance
$0.0M
$1.0M
$2.0M
$3.0M
$4.0M
$5.0M
$6.0M
$7.0M
25 26 27 28 29 30 31 32 33 34 35
$0.0M
$2.0M
$4.0M
$6.0M
$8.0M
$10.0M
$12.0M
25 26 27 28 29 30 31 32 33 34 35
Revenues Total Expenditures
$0.0M
$0.0M
$0.0M
$0.0M
$0.0M
$0.0M
25 26 27 28 29 30 31 32 33 34 35
$0.0M
$5.0M
$10.0M
$15.0M
25 26 27 28 29 30 31 32 33 34 35
O&M CIP DEBT TO
Operating Fund
CIP Spending
Revenues vs. Expenses
CIP Funding Borrowing
Expenses by Type
CALC SAVE CTRL LAST OVR
$0.0M
$2.0M
$4.0M
$6.0M
$8.0M
$10.0M
$12.0M
$14.0M
24 25 26 27 28 29 30 31 32 33 34
Current Plan
Sewer Facilities Improvement Fund
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 63 Capital Project Funding Summary Schedule 10-W
Final Capital Projects Funding Sources FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Capital Fund $ 2,300,000 $ 3,025,000 $ 817,670 $ 381,002 $ 373,639 $ 373,828 $ 374,131 $ 374,437 $ 100,000 $ 653,914 $ 379,541 Revenue Fund - - 2,682,330 2,318,998 951,361 3,476,172 - 1,725,563 - 3,446,086 3,720,459 Senior-Lien Debt Proceeds 1,125,000 3,350,000 1,675,000 3,150,000 3,625,000 1,750,000 150,000 1,850,000 4,600,000 - - Projects Designated To Be Paid With Cash - - - - - - 3,725,869 - - - - Total Projects Paid $ 3,425,000 $ 6,375,000 $ 5,175,000 $ 5,850,000 $ 4,950,000 $ 5,600,000 $ 4,250,000 $ 3,950,000 $ 4,700,000 $ 4,100,000 $ 4,100,000
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 64 Capital Project Funding Summary Schedule 10-S
Final Capital Projects Funding Sources FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Sewer Facilities Improvement $ 6,350,000 $ 3,000,000 $ 3,350,000 $ 1,064,155 $ 388,179 $ 388,353 $ 388,525 $ 388,695 $ 388,863 $ 389,029 $ 384,458 Revenue Fund - - - 2,485,845 3,011,821 2,811,647 2,111,475 2,111,305 2,111,137 2,110,971 - Projects Designated To Be Paid With Cash - - - - - - - - - - 2,115,542 Total Projects Paid $ 6,350,000 $ 3,000,000 $ 3,350,000 $ 3,550,000 $ 3,400,000 $ 3,200,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 65 Schedule 11-W
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Term (Years) 30 30 30 30 30 30 30 30 30 30 30
Interest Rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Sources of Funds
Par Amount $ - $ 6,575,078 $ - $ 7,243,277 $ - $ 2,031,325 $ - $ - $ 6,895,814 $ - $ - Uses of Funds
Proceeds $ - $ 6,150,000 $ - $ 6,775,000 $ - $ 1,900,000 $ - $ - $ 6,450,000 $ - $ - Cost of Issuance 2.00% of Par - 131,502 - 144,866 - 40,627 - - 137,916 - - Debt Service Reserve 1 Year(s) of Debt Service - 293,577 - 323,412 - 90,699 - - 307,898 - - Total Uses $ - $ 6,575,078 $ - $ 7,243,277 $ - $ 2,031,325 $ - $ - $ 6,895,814 $ - $ - 1 Year Interest - 131,502 - 144,866 - 40,627 - - 137,916 - - Annual Debt Service $ - $ 293,577 $ - $ 323,412 $ - $ 90,699 $ - $ - $ 307,898 $ - $ - Total Debt Service - 8,807,302 - 9,702,353 - 2,720,955 - - 9,236,927 - - Cumulative New Annual Senior Lien Debt Service1 $ - $ 131,502 $ 293,577 $ 438,442 $ 616,988 $ 657,615 $ 707,687 $ 707,687 $ 845,603 $ 1,015,585 $ 1,015,585 1 Reflects interest-only payment due in year of issuance.
Future Loan Projections
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 66 Schedule 11-S
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Term (Years) 30 30 30 30 30 30 30 30 30 30 30
Interest Rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Sources of Funds
Par Amount $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Uses of Funds
Proceeds $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cost of Issuance 2.00% of Par - - - - - - - - - - -
Debt Service Reserve 1 Year(s) of Debt Service - - - - - - - - - - - Total Uses $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
1 Year Interest - - - - - - - - - - -
Annual Debt Service $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total Debt Service - - - - - - - - - - -
Cumulative New Annual Senior Lien Debt Service1 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - 1 Reflects interest-only payment due in year of issuance.
Future Loan Projections
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 67 Funding Summary by Fund Schedule 12-W
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Rate Stabilization
Balance At Beginning Of Fiscal Year $ 1,555,554 $ 1,777,776 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 Annual Revenues 222,222 222,222 - - - - - - - - -
Less: Annual Expenses - - - - - - - - - - -
Less: Payment Of Debt Service - - - - - - - - - - -
Subtotal $ 1,777,776 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 Less: Restricted Funds - - - - - - - - - - -
Total Amount Available For Projects $ 1,777,776 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 Amount Paid For Projects - - - - - - - - - - -
Subtotal $ 1,777,776 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 Add Back: Restricted Funds - - - - - - - - - - -
Plus: Interest Earnings 75,000 75,555 70,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 60,000 Less: Interest Allocated To Cash Flow (75,000) (75,555) (70,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) Balance At End Of Fiscal Year $ 1,777,776 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 $ 1,999,998 Capital Fund
Balance At Beginning Of Fiscal Year $ 4,784,770 $ 3,029,026 $ 444,754 $ 7,783 $ 117 $ 2 $ 0 $ 0 $ 0 $ 278,864 $ 4,183 Annual Revenues 372,314 372,615 372,916 373,219 373,522 373,826 374,131 374,437 374,743 375,050 375,358 Less: Annual Expenses - - - - - - - - - - -
Less: Payment Of Debt Service - - - - - - - - - - -
Subtotal $ 5,157,084 $ 3,401,640 $ 817,670 $ 381,002 $ 373,639 $ 373,828 $ 374,131 $ 374,437 $ 374,743 $ 653,914 $ 379,541 Less: Restricted Funds - - - - - - - - - - -
Total Amount Available For Projects $ 5,157,084 $ 3,401,640 $ 817,670 $ 381,002 $ 373,639 $ 373,828 $ 374,131 $ 374,437 $ 374,743 $ 653,914 $ 379,541 Amount Paid For Projects (2,300,000) (3,025,000) (817,670) (381,002) (373,639) (373,828) (374,131) (374,437) (100,000) (653,914) (379,541) Subtotal $ 2,857,084 $ 376,640 $ - $ - $ - $ - $ - $ - $ 274,743 $ - $ - Add Back: Restricted Funds - - - - - - - - - - -
Plus: Interest Earnings 171,942 68,113 7,783 117 2 0 0 0 4,121 4,183 63 Less: Interest Allocated To Cash Flow - - - - - - - - - - - Balance At End Of Fiscal Year $ 3,029,026 $ 444,754 $ 7,783 $ 117 $ 2 $ 0 $ 0 $ 0 $ 278,864 $ 4,183 $ 63 Revenue Fund
Balance At Beginning Of Fiscal Year $ 4,509,096 $ 4,749,413 $ 5,497,546 $ 4,307,056 $ 3,938,626 $ 5,200,897 $ 4,362,438 $ 3,344,011 $ 4,480,828 $ 7,423,385 $ 6,938,180 Net Cash Flow 240,317 748,133 1,491,840 1,950,568 2,213,632 2,637,713 2,707,442 2,862,380 2,942,557 2,960,881 3,105,593 Less: Cash-Funded Capital Projects - - - - - - (3,725,869) - - - - Less: Payment Of Debt Service - - - - - - - - - - -
Subtotal $ 4,749,413 $ 5,497,546 $ 6,989,386 $ 6,257,624 $ 6,152,258 $ 7,838,610 $ 3,344,011 $ 6,206,392 $ 7,423,385 $ 10,384,266 $ 10,043,772 Less: Restricted Funds (2,638,483) (2,748,309) (2,862,963) (2,982,667) (3,107,653) (3,238,164) (3,344,011) (3,516,790) (3,665,451) (3,820,730) (3,982,933) Total Amount Available For Projects $ 2,110,930 $ 2,749,237 $ 4,126,423 $ 3,274,957 $ 3,044,605 $ 4,600,447 $ - $ 2,689,602 $ 3,757,934 $ 6,563,536 $ 6,060,840 Amount Paid For Projects - - (2,682,330) (2,318,998) (951,361) (3,476,172) - (1,725,563) - (3,446,086) (3,720,459) Subtotal $ 2,110,930 $ 2,749,237 $ 1,444,093 $ 955,959 $ 2,093,244 $ 1,124,275 $ - $ 964,039 $ 3,757,934 $ 3,117,450 $ 2,340,381 Add Back: Restricted Funds 2,638,483 2,748,309 2,862,963 2,982,667 3,107,653 3,238,164 3,344,011 3,516,790 3,665,451 3,820,730 3,982,933 Plus: Interest Earnings 208,316 204,939 171,581 123,685 137,093 143,450 115,597 117,373 178,563 215,423 198,922 Less: Interest Allocated To Cash Flow (208,316) (204,939) (171,581) (123,685) (137,093) (143,450) (115,597) (117,373) (178,563) (215,423) (198,922) Balance At End Of Fiscal Year $ 4,749,413 $ 5,497,546 $ 4,307,056 $ 3,938,626 $ 5,200,897 $ 4,362,438 $ 3,344,011 $ 4,480,828 $ 7,423,385 $ 6,938,180 $ 6,323,313
Appendix: Revenue Sufficiency Analysis Schedules
City of Norco | Water and Sewer Rate Study Final Report Stantec | 68 Funding Summary by Fund Schedule 12-S
FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 FY 2033 FY 2034 FY 2035 Sewer Facilities Improvement
Balance At Beginning Of Fiscal Year $ 12,213,214 $ 6,250,679 $ 3,638,326 $ 676,151 $ - $ - $ - $ - $ - $ - $ - Annual Revenues 387,465 387,646 387,826 388,003 388,179 388,353 388,525 388,695 388,863 389,029 384,458 Less: Annual Expenses - - - - - - - - - - -
Less: Payment Of Debt Service - - - - - - - - - - -
Subtotal $ 12,600,679 $ 6,638,326 $ 4,026,151 $ 1,064,155 $ 388,179 $ 388,353 $ 388,525 $ 388,695 $ 388,863 $ 389,029 $ 384,458 Less: Restricted Funds - - - - - - - - - - -
Total Amount Available For Projects $ 12,600,679 $ 6,638,326 $ 4,026,151 $ 1,064,155 $ 388,179 $ 388,353 $ 388,525 $ 388,695 $ 388,863 $ 389,029 $ 384,458 Amount Paid For Projects (6,350,000) (3,000,000) (3,350,000) (1,064,155) (388,179) (388,353) (388,525) (388,695) (388,863) (389,029) (384,458) Subtotal $ 6,250,679 $ 3,638,326 $ 676,151 $ - $ - $ - $ - $ - $ - $ - $ - Add Back: Restricted Funds - - - - - - - - - - -
Plus: Interest Earnings 276,958 148,335 64,717 10,142 - - - - - - - Less: Interest Allocated To Cash Flow (276,958) (148,335) (64,717) (10,142) - - - - - - - Balance At End Of Fiscal Year $ 6,250,679 $ 3,638,326 $ 676,151 $ - $ - $ - $ - $ - $ - $ - $ - Revenue Fund
Balance At Beginning Of Fiscal Year $ 1,073,522 $ 2,269,691 $ 3,589,495 $ 5,086,036 $ 4,373,184 $ 3,256,910 $ 2,427,892 $ 2,285,902 $ 2,139,482 $ 1,984,322 $ 1,816,130 Net Cash Flow 1,196,169 1,319,804 1,496,541 1,772,994 1,895,547 1,982,628 1,969,485 1,964,885 1,955,977 1,942,780 1,930,170 Less: Cash-Funded Capital Projects - - - - - - - - - - (2,115,542) Less: Payment Of Debt Service - - - - - - - - - - -
Subtotal $ 2,269,691 $ 3,589,495 $ 5,086,036 $ 6,859,029 $ 6,268,731 $ 5,239,538 $ 4,397,376 $ 4,250,787 $ 4,095,459 $ 3,927,102 $ 1,630,758 Less: Restricted Funds (1,213,411) (1,251,859) (1,291,563) (1,332,566) (1,374,911) (1,418,645) (1,463,815) (1,510,472) (1,558,664) (1,608,447) (1,630,758) Total Amount Available For Projects $ 1,056,280 $ 2,337,636 $ 3,794,472 $ 5,526,464 $ 4,893,820 $ 3,820,893 $ 2,933,561 $ 2,740,316 $ 2,536,795 $ 2,318,655 $ - Amount Paid For Projects - - - (2,485,845) (3,011,821) (2,811,647) (2,111,475) (2,111,305) (2,111,137) (2,110,971) - Subtotal $ 1,056,280 $ 2,337,636 $ 3,794,472 $ 3,040,618 $ 1,881,999 $ 1,009,246 $ 822,086 $ 629,011 $ 425,658 $ 207,684 $ - Add Back: Restricted Funds 1,213,411 1,251,859 1,291,563 1,332,566 1,374,911 1,418,645 1,463,815 1,510,472 1,558,664 1,608,447 1,630,758 Plus: Interest Earnings 50,148 87,888 130,133 141,888 114,451 85,272 70,707 66,381 61,857 57,007 51,703 Less: Interest Allocated To Cash Flow (50,148) (87,888) (130,133) (141,888) (114,451) (85,272) (70,707) (66,381) (61,857) (57,007) (51,703) Balance At End Of Fiscal Year $ 2,269,691 $ 3,589,495 $ 5,086,036 $ 4,373,184 $ 3,256,910 $ 2,427,892 $ 2,285,902 $ 2,139,482 $ 1,984,322 $ 1,816,130 $ 1,630,758
CITY OF NORCO
Notice of Public Hearing on Proposed Increases in
Potable Water, Recycled Water, and Sewer Service Rates
NOTICE IS HEREBY GIVEN that the City of Norco (“City”) City Council (“City Council”) will hold a public hearing on or after 7:00 PM on June 4, 2025, or as soon as possible thereafter, in the City Council Chambers, located at 2820 Clark Avenue, Norco, CA 92860 to consider adopting increases in the rates and charges for its water (including potable and recycled water) and sewer services (collectively the “Utility Services” and the rates and charges for the Utility Services, collectively the “Utility Rates”) for all customers. If approved, the Utility Rates will become effective July 1, 2025, and will be adjusted each July 1 thereafter, through and including July 1, 2029 for all customers. Said public hearing will be held to consider all oral testimony and written protests to, and the adoption of, the proposed rate adjustments. This notice is being provided to you at least 45 days in advance of the public hearing as a property owner of record or tenant subject to the proposed Utility Rates described herein.
Please be advised that any judicial action to challenge the proposed Utility Rates must be brought within 120 days of the date that the resolution approving the Utility Rates is adopted.
About the City’s Water and Sewer Systems
Potable Water System. The City’s potable water system currently serves a population of approximately 27,000 through 7,500 service connections covering a 15 square mile area. In calendar year 2024, the water system produced about 5,600,000 gallons a day or 6,246 acre-feet of water overall for the year. The City obtains its water supply from a combination of multiple sources, including three (3) groundwater wells: Wells 12, 13, and 15; and seven (7) connections with adjacent water systems (City of Riverside, City of Corona, Chino Basin Desalter Authority’s Chino II Desalter system, Jurupa Community Services District, and Western Municipal Water District’s Arlington Desalter system). The City’s water distribution system consists of five (5) pressure zones served by 100 miles of water mainlines, nine (9) water storage reservoirs, and four (4) booster stations. The City also operates the Bluff St. Groundwater Treatment Plant that removes iron, manganese, and arsenic from two wells (Wells 13 and 15).
Recycled Water System. The City does not currently deliver recycled water to properties located within the City. However, the City does maintain infrastructure that will allow for the delivery of recycled water in the future. The existing recycled water infrastructure includes approximately six (6) miles of recycled water distribution lines. The City anticipates being able to provide recycled water over the coming years following the completion of joint projects including a joint booster pump station and pipeline that will deliver recycled water from the Western Riverside County Regional Wastewater Authority (“WRCRWA”) wastewater treatment facility to the City.
Sewer System. The City’s sewer system currently serves a population of approximately 27,000 through 6,800 service connections covering a 15 square mile area. The City’s sewer collection system consists of about 110 miles of mainlines and twelve (12) sewer lift stations. The City is also a member of a joint powers authority with four (4) other agencies (City of Corona, Home Gardens Sanitation District, Jurupa Community Services District, and Western Municipal Water District) that owns a 14 million gallon per day wastewater treatment facility that is operated and maintained by the WRCRWA. The City has maximum treatment allowance of 2,700,000 gallons a day but discharges about 1,800,000 gallons a day to the WRCRWA treatment plant.
Reasons for the Adjustments
The City makes every effort to serve its customers in the most efficient and cost-effective manner possible. However, while the City continually strives for cost efficiencies, it also needs to recover significantly higher costs that impact the City’s Utility Services. To that end, the City contracted an independent rate consultant to conduct a cost of service rate study (the “Rate Study”) to determine the best approach to meet the necessary revenue requirements and to keep pace with projected cost increases over a five-year period. Based on this evaluation, and as described below, the City has determined that adjustments and increases to the Utility Rates are necessary.
Without the proposed increases the water and sewer systems will each begin to run operational deficits within the next four (4) years.
The City’s last rate study was conducted in 2016 and provided recommendations for adjustments to both water and sewer rates over a five (5) year period (FY 2017 through FY 2021). At that time the City only elected to increase the water rates and charges and elected not to increase the sewer rates. As a result the sewer rates have not been increased for over a decade and the water rates have remained unchanged for over four (4) years.
The primary reasons driving the proposed Utility Rate increases are inflationary and supply chain cost increases in the wake of the COVID-19 pandemic. These factors have resulted in increased costs in the operations and maintenance of the water and sewer systems and have placed significant pressure on the City to maintain reliable Utility Services. Additionally, the City’s existing aging infrastructure continues to require upgrade and replacement. For example, it is estimated that the City requires nearly $36 million to upgrade the existing water system and another $11 million in capital improvements needed to its aging sewer system.
The City also needs to ensure it maintains adequate revenues to meet ongoing financial requirements of each Utility Service including, but not limited to, debt service payments and reserve funding requirements, fund necessary capital improvement projects, ensuring compliance with all State of California water use mandates and regulations governing the treatment of water and wastewater, and maintaining appropriate cash flows to provide financial stability and resiliency during any economic condition.
Therefore, due to factors beyond the City’s control, it is now necessary to increase the Utility Rates to enable the City to continue to deliver reliable Utility Services. The proposed Utility Rate increases are necessary to keep pace with these cost increases and ensure critical water and
sewer system infrastructure is maintained and new investments in the systems can be continued as planned.
A copy of the Rate Study is available for inspection in the City Clerk’s office at City Hall, and is also available online at https://www.norco.ca.us/departments/utilities/rate-structure.
Basis for the Proposed Adjustments
Both the current water and sewer services rate structures are proposed to remain unchanged.
For water service customers that means Utility Rates will still be based on a two-part rate structure comprised of both a fixed monthly charge and a uniform commodity charge. The fixed monthly charge does not vary by customer class and is based upon the size of the meter serving the property. The uniform commodity rate is a rate charged per hundred cubic feet (“HCF,” equivalent to 748 gallons) of water delivered to a property. Therefore, the Utility Rates are proposed to be increased based upon the current rate structure as further described below.
Additionally, the City provides certain customers with private fire protection lines (i.e. customers who have private fire suppression systems/hydrants). These customers are billed a fixed monthly charge and a uniform commodity charge. All customer accounts are currently billed on a monthly basis.
Sewer service rates will also maintain the same rate structure. This means single family residential and irrigation customers are charged only a fixed monthly charge while all nonresidential service customers such as schools, governmental, industrial, commercial, and multifamily residential (residential property containing 4 individual units or more) are charged the fixed monthly charge plus a uniform commodity charge per HCF for all metered water usage over 10 HCF per billing cycle.
Potable Water Service:
Fixed Monthly Charge. The fixed monthly charge is charged to potable water service customers and is established on the basis of the size of the water meter (in inches) serving the property, regardless of customer class. The fixed monthly charge is incurred regardless of whether water is actually used and is calculated to recover a portion of the City’s fixed costs in providing the applicable water service to such customers, including the fixed costs associated with managing each water account (e.g., customer service, billing and collections, meter reading, meter maintenance, and administration costs), and a portion of costs associated with the infrastructure needed to serve the customer and meeting system capacity (e.g., treatment, distribution, and storage).
Uniform Commodity Charge. The uniform commodity charge is calculated to recover the remaining costs to provide the service and is charged based upon the volume of water, in HCF, each customer consumes per billing cycle. This uniform rate applies to all customer classes regardless of the amount of water consumed per billing cycle.
The proposed potable water fixed monthly charges, commodity charges, and effective dates are set forth below.
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
Fixed Charge
3/4" $52.60 $57.34 $61.93 $65.65 $69.59
1" $77.48 $84.45 $91.21 $96.68 $102.48
1 1/2" $179.25 $195.38 $211.01 $223.67 $237.09
2" $230.18 $250.90 $270.97 $287.23 $304.46
3" $600.79 $654.86 $707.25 $749.69 $794.67
4" $1,069.82 $1,166.10 $1,259.39 $1,334.95 $1,415.05
6" $2,542.82 $2,771.67 $2,993.40 $3,173.00 $3,363.38
8” $4,079.10 $4,446.22 $4,801.92 $5,090.04 $5,395.44
10” $6,452.62 $7,033.36 $7,596.03 $8,051.79 $8,534.90
12” $10,606.21 $11,560.77 $12,485.63 $13,234.77 $14,028.8 Usage Charge 6
Rate (per HCF) $2.92 $3.18 $3.43 $3.64 $3.86
Recycled Water Service:
Recycled Water Rates and Charges: The City does not currently provide recycled water service but has conducted planning, designing, and has begun constructing the necessary infrastructure to provide recycled water service over the last several years. A cost-of-service analysis was completed for the City’s existing and future recycled water infrastructure and operations to determine the appropriate pricing for recycled water service once the City is able to provide such service. For customers receiving recycled water service, the rate structure will be similar to the potable water service rate structure described above. Customers will be billed a fixed monthly charge for all customer classes which varies by meter size. There is also a commodity charge set at a uniform rate for all customer classes.
The effective date and proposed rates for recycled water service are set forth below and will apply only to customers that connect to the recycled water system in the future when such service becomes available.
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
Fixed Charge
3/4" $23.82 $49.40 $50.38 $51.34 $51.79
1" $37.79 $78.40 $79.96 $81.47 $82.18
1 1/2" $94.97 $197.03 $200.93 $204.73 $206.53
2" $123.59 $256.40 $261.47 $266.42 $268.76
3" $331.84 $688.39 $702.03 $715.32 $721.60
4" $595.38 $1,235.11 $1,259.57 $1,283.42 $1,294.69
6" $1,423.04 $2,952.09 $3,010.55 $3,067.56 $3,094.49
8” $2,286.25 $4,742.84 $4,836.76 $4,928.35 $4,971.62
10” $3,619.91 $7,509.51 $7,658.21 $7,803.23 $7,871.74
12” $5,953.76 $12,351.08 $12,595.66 $12,834.18 $12,946.87 Recycled Water Usage
Charge Total Rate (per HCF) $2.21 $3.22 $3.23 $3.23 $3.23 Private Fire Protection Line Service:
Private Fire Service Charge. The private fire service charge (“PFSC”) is a separate fixed monthly charge imposed only on properties with a private fire line serving the parcel. The PFSC recovers the portion of the City’s fixed costs necessary for delivery of water to private fire lines. Certain costs of the water system, such as meter reading, customer billing, water quality testing, and other administrative and staffing costs are not allocated, or are only allocated in part, to PFSC.
The proposed PFSC fixed monthly charges, commodity charges, and effective dates are set forth below.
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
Fixed Charge
2" $53.80 $58.65 $63.34 $67.14 $71.17
3" $56.10 $61.14 $66.04 $70.00 $74.20
4" $60.05 $65.45 $70.69 $74.93 $79.43
6" $74.23 $80.91 $87.39 $92.63 $98.19
8” $98.70 $107.58 $116.19 $123.16 $130.55
10” $135.50 $147.70 $159.51 $169.08 $179.23
12” $186.51 $203.29 $219.55 $232.73 $246.69
Usage Charge Rate
(per HCF) $5.71 $6.23 $6.72 $7.13 $7.55
Sewer Service:
Fixed Monthly Charge. The sewer service fixed monthly charge is charged to all sewer service customers regardless of customer class. The fixed monthly charge is calculated to recover a portion of the City’s fixed costs in providing sewer service to customers, including the fixed costs associated with managing each sewer account (e.g., customer service, billing and collections, and administration costs), and a portion of costs associated with the infrastructure needed to serve the customers.
Uniform Commodity Charge. The uniform commodity charge is not applicable to single family residential and irrigation customers. However, all other customer classes including customers such as schools, governmental, industrial, commercial, and multi-family residential (residential property containing 4 individual units or more) are subject to the uniform commodity charge.
The uniform commodity charge is charged per HCF for all metered water usage over 10 HCF per billing cycle.
The proposed sewer service fixed monthly charge, commodity charges, and effective dates are set forth below.
July 1,
2025
July 1,
2026
July 1,
2027
July 1,
2028
July 1,
2029
Monthly Fixed Charge1 $53.55 $56.23 $58.48 $60.82 $63.25 Sewer Usage Charge2(per HCF) $8.40 $8.82 $9.17 $9.54 $9.92 1Monthly Fixed Charge applies to all customers.
2 Sewer Usage Charge excludes single family residential and irrigation customer classes.
Public Hearing Process and Written Protests
Any record owner of a parcel upon which the Utility Rates are proposed to be imposed and any tenant directly liable for the payment of Utility Rates (i.e., a customer of record who is not a property owner) may submit a written protest to the proposed Utility Rate increases; however, only one protest will be counted per identified parcel. Any written protest must: (1) state that the identified property owner or tenant is opposed to the proposed water or sewer service rate increases; (2) provide the location of the identified parcel (by street address, assessor’s parcel number, or customer account number); and (3) include the name and signature of the property owner or tenant submitting the protest. Written protests may be submitted in one of the following manners: (1) by mail or hand delivery to the City of Norco, Office of the City Clerk, 2870 Clark Avenue, Norco, CA 92860, so long as the protest is received by 2 P.M. on June 4, 2025; or (3) at the public hearing on June 4, 2025, so long as they are received prior to the close of the public comment portion of the public hearing. Any protest submitted via e-mail or other electronic means will not be accepted as a valid written protest. Please identify on the front of the envelope that the enclosed protest is for the “2025 Utility Rate Public Hearing.” The City Council will accept and consider all written protests and will hear and consider all oral comments to the proposed Utility Rate increases at the public hearing. Oral comments at the public hearing will not qualify as valid protests unless accompanied by a written protest. Upon the conclusion of the public hearing, the City Council will consider adoption of the proposed Utility Rate increases as described in this notice. If written protests against the proposed Utility Rates are not presented by a majority of the property owners or tenants of the identified parcels subject to the proposed Utility Rate increases, the City Council will be authorized to adopt the Utility Rate increases. Details regarding the proposed Utility Rates are available at City Hall (location noted above) or on the City’s website at
https://www.norco.ca.us/departments/utilities/rate-structure. If you have any questions regarding the proposed Utility Rates or the amount of such Utility Rates that may be imposed on your property, please contact the Public Works Department at (951) 270-5607.
Exhaustion of Administrative Remedies Procedure (Gov. Code §53759.1) Notice is hereby given that any property owner or tenant directly liable for the payment of Utility Rates that wishes to challenge the proposed Utility Rates must first file a written legal objection which specifies the grounds for alleging the City’s noncompliance with the law as described below no later than the earlier of the close of the public hearing, or 11:59 PM on June 4, 2025.
Information related to the written basis for the water, recycled water, and sewer rates and charges can be found on the City’s website at https://www.norco.ca.us/departments/utilities/rate-structure.
You have the right to request the City to mail the written basis for the water, recycled water, and sewer rates and charges directly to you. To request the written basis to be mailed please contact Public Works Department at (951) 270-5607 or via email at [email protected].
Legal objections will only be considered valid if they meet the following procedural and substantive requirements:
• Legal objections must be in writing;
• Legal objections must be received by the earlier of the close of the public hearing, or 11:59 p.m. on June 4, 2025;
• Legal objections must be mailed or hand delivered to 2870 Clark Avenue, Norco, CA 92860; and
• Legal objections must include the following information:
o Your name, parcel number and/or service address, including a return mailing or email address for City responses to your written objection; o A statement that your communication constitutes a legal objection to the water rates, sewer rates, or both; and
o A description of the nature of the legal objection which specifies the grounds for alleging the City’s noncompliance with the law, with sufficient specificity to allow the City to respond in writing. A statement that the proposed water, recycled water, and/or sewer rates and charges violate Proposition 218, without an explanation as to the basis of your claim, will be insufficient to constitute a legal objection.
A written protest will not constitute a valid legal objection unless it meets the requirements set forth above. Failure to submit a written legal objection within the written objection period, or to meet the requirements set forth above, will bar any right to challenge the proposed Utility Rates through a legal proceeding.