Water and Wastewater Rate Study Meeting Date: August 15, 2023& AssociatesTuckfield, TuckfieldClayton Benjamin A. Fine, Public Works Director/City EngineerNadia Feeser, Administrative Services Director Agenda Item 12.B
Agenda 2 Recommendation•& Next StepsTimeline •Communities?How do the Proposed Rates Compare to Other •Community Impact•Proposed Wastewater Rates•Proposed Water Rates•Value of Water•Why are rates changing?•Background•
Background 3 costsWater Environment Federation (WEF) methodologies of allocating in compliance with American Water Works Association (AWWA) and •in accordance with Proposition 218, and •in fair and equitable rates for the users,based on cost of service principles and industry methods that result •Study is developed:•requiredmaintain debt service coverage ratios at or greater than the minimum •meet reserve requirements at or greater than target levels, and •operating expenses and capital project needs, •wastewater: Study develops appropriate rates to support water and •comprehensive Water and Wastewater Rate Study (Study)City engaged Tuckfield & Associates to conduct a •
Background 4 with revised rates th Staff to come back to Council on August 15•variable rate to help reduce impact on rate payers-water variable rate to be in line with the MultiMove forward proposed rates, except reduce the Mobile Home •Council Direction•the water and wastewater systemDesign rates so that each customer type pays for their share on •recent court decisions, and legislation State Water Resources Control Board guidelines, proposition 218, Water Environment Federation, American Water Works Association, •Follow legal requirements, guidelines, and best practices•Reviewed the methodology for developing rates•Council Special Study Session–August 3, 2023 •
Why are rates changing?5 Financial support for Central Coast Blue2.ensuring adequate debt service coverage•ensuring adequate reserves•projects and increasing operating expenses and other capital improvement •financial plans for water and wastewater, including: Support for the sustainable enterprise systems’ 1.
Value of Water
1 gallon of 7 Value of 1 Gallon of Water $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $-$27.00$5.50$4.00$3.50$1.50$0.01Series1coffee1 gallon ofgasoline1 gallon of1 gallon of tea1 gallon of milk1 gallon ofwaterPismo Beach
Number of Water Customers by Type 11%and Construction = include Commercial, Irrigation, Residential customers -Non89%Mobile Home = Single Family, Multifamily, and include Residential customers 0.9%Construction3.3%Irrigation6.8%Commercial0.2%Mobile Home6.7%Multifamily82.0%Single Family 8
Residential Water Customers 0.2%Mobile Home7.5%Multifamily92.2%Single Family14 HCF every two months. meters consuming on average family meters are sized at ¾” -The majority of those singlemeters.Of those residential water 9
Proposed exceed requirementsEnsure debt service coverage ratios meet or Establish and maintain reserveswastewaterprojects for water andProvide for new capital improvement purchased waterrising benefits, electricity, chemicals, and Meet increasing operating expense for 10 System Water and Sustainable for Increases Rate
Central Coast Blue 11 Diversifies water supply•Protects against droughts•Enhances local supply reliability •Create a seawater intrusion barrier•Supplement groundwater supply •Injection wells •Basin (SMGB)Protects the Santa Maria Groundwater •Sustainable Water Supply •Regional Recycled Water Project•
Proposed Water Rates
Water Capital Improvement Projects other reservesthe water system for operating, capital projects, emergency reserve, and Rates include supporting the sufficient reserves for Sufficient Reserves: 13 UpgradePrice/ Highway 1 Waterline -Bello2027$1,913,400Charles Street Reservoir Replacement2024-2023$1,803,500Bello Reservoir Roof Replacement2024$1,210,000Advanced Metering Infrastructure2025-2024$2,500,000New Production Well2025-2023$2,500,000Central Coast Blue2026-2023$6,938,241Project TitleFiscal Year(s)Estimated Cost
Current and Proposed Water Rates 14
Proposed Wastewater Rates
Wastewater Capital Improvement Projects reserve, and other reservesthe wastewater system for operating, capital projects, emergency Rates include supporting the sufficient reserves for Sufficient Reserves: 16 Lift Station Bluff StabilizationHarloe2026$1,030,000ImprovementWastewater Maintenance and 2024-2023$2,083,309Advanced Metering Infrastructure2025-2024$2,500,000Central Coast Blue2026-2023$14,505,490Project TitleFiscal Year(s)Estimated Cost
Current and Proposed Wastewater Rates 17
Current and Proposed Wastewater Rates 18
Community Impact
Estimated 20 CustomerFamily Average Single Impact for Monthly -Water Bill Bi
Estimated 21 CustomerFamily Average Single Impact for Monthly -BiWastewater Bill
Estimated Water and Wastewater Bill Bi 2028January$13.364.67%2027January$12.704.64%2026January$12.134.64%2025January$11.534.61%2024January$11.524.83%FeeFamily Residential Average Single Increase ($)Wastewater Bill Average Water & Increase (%)Wastewater Bill Average Water & 22 Impact for Average Residential CustomerMonthly -
How do the Proposed Rates Compare to Other Communities?
Combined Water and Wastewater Bill Does not account for projected rate increases in San Luis Obispo and Grover Beach 24 Compared to Other Communities
Timeline & Next Steps
Proposed Timeline and Next Steps ratesyear implementation of -to the 5rates should be evaluated prior implemented to determine if years after rates have been Staff to return to Council two 1 Jan. 2026 billings.January and February 2024 would see the rates on the January 1, 2024. Rate payers Effective Date of New Rates: 1 Jan. 2024 implementing the new rates.adopt a Resolution determine whether or not to Public Hearing: Council will 17 Oct. 2023 Workshop•Structure WorkshopResidential Rate -4:00pm Non•Community Workshops:27 Sep. 2023 mailedProposition 218 Notifications End of August 2023 notificationsand issuing Proposition 218 consideration of amending rates Council Meeting for Council 15 Aug. 2023 26
Recommendation
Staff Recommendation:28 wastewater rate schedule. October 17, 2023 to consider amending the water and directing the City Clerk to schedule a public hearing for •directing staff to issue Proposition 218 notifications; and •schedules for Fiscal Years 2024 through 2028; approving the proposed water and wastewater rate •Study; adopting the comprehensive Water and Wastewater Rate •Adopt a Resolution•
Single Family Residential vs Hotel ¾” meter, 14 HCF, category’s rates are developed based on their cost of service. Single Family Residential does not subsidize Commercial water. Each Proposition 218 does not allow for one category to subsidize another category. 29 Total amount for 14 HCF is $139.86•consumedPays $7.18/HCF for all water •CommercialTotal amount for 14 HCF is $126.43•Second 4 units pay $6.72/HCF•First 10 units pay $6.02/HCF•water on a tiered systemSingle Family Residential pays for •Single Family Residential Water only
Who Consumes water? Who Pays?(meter) and how much water to provide the fixed costs of their infrastructure and how dirty their wastewater is, plus water they consume, and for how much Each category pays for the amount of 30 Total Hotel water bills = 16% of $ total•yearcustomers and use 15% of water each Hotels are included in Commercial •Hotel year. customers use 40% of water each Commercial/Irrigation/Construction approximately 62% of $ total •Total residential = 60% water•homes use 13% of water year family and Mobile -Apartments/Multi•46% of water each yearSingle Family Residential use about •Single Family Residential