Public Hearing: Adopting New Water
and Wastewater Rates
Agenda Item 11.A
Nadia Feeser, Administrative Services Director
Benjamin A. Fine, Public Works Director/City Engineer
Clayton Tuckfield, Tuckfield & Associates
Meeting Date: October 17, 2023
Agenda
•Background
•Why are rates changing?
•Value of Water
•Proposed Water Rates
•Proposed Wastewater Rates
•Community Impact
•How do the Proposed Rates Compare to Other Communities? •Public Hearing
•Council Action
2 Background
•City engaged Tuckfield & Associates to conduct a comprehensive Water and Wastewater Rate Study (Study) •Study develops appropriate rates to support water and wastewater:
•operating expenses and capital project needs,
•meet reserve requirements at or greater than target levels, and •maintain debt service coverage ratios at or greater than the minimum required •Study is developed:
•based on cost of service principles and industry methods that result in fair and equitable rates for the users, •in accordance with Proposition 218, and
•in compliance with American Water Works Association (AWWA) and Water Environment Federation (WEF) methodologies of allocating costs 3 Water and Wastewater Rate Setting Timeline
4 3 Aug. 2023
Special Council Workshop
reviewing proposed water
and wastewater rates,
study, and rate setting
methodology
15 Aug. 2023
Council Meeting for Council
consideration of amending
rates and issuing
Proposition 218
notifications, approved the
proposed rates to move
forward, approved Study
28 Aug. 2023
Proposition 218
Notifications mailed
27 Sep. 2023
Community Workshops:
•4:00pm Non-Residential
Rate Structure Workshop
•6:00pm Residential Rate
Structure Workshop
17 Oct. 2023
Public Hearing: Council will
determine whether or not
to adopt a Resolution
implementing the new
rates.
1 Jan. 2024
Effective Date of New
Rates: January 1, 2024.
Rate payers would see the
rates on the January and
February 2024 billings.
1 Jan. 2026
Staff to return to Council
two years after rates have
been implemented to
determine if rates should
be evaluated prior to the 5-
year implementation of
rates
Why are rates changing?
1.Every 5 years, City reviews water and wastewater
enterprise systems rates.
2.Support for the sustainable enterprise systems’
financial plans for water and wastewater, including:
•operating expenses and other capital improvement projects and
•ensuring adequate reserves
•ensuring adequate debt service coverage
3.Financial support for Central Coast Blue
5 Central Coast Blue
•Regional Recycled Water Project
•Sustainable Water Supply
•Protects the Santa Maria Groundwater Basin (SMGB)
•Injection wells
•Supplement groundwater supply
•Create a seawater intrusion barrier
•Enhances local supply reliability
•Protects against droughts
•Diversifies water supply
6 Value of Water
1 gallon of
Pismo Beach
water
1 gallon of
bottled water 1 gallon of milk 1 gallon of tea 1 gallon of gasoline
1 gallon of
coffee
Series1 $0.01 $1.50 $3.50 $4.00 $5.50 $27.00
$-
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
Value of 1 Gallon of Water
8 Proposed Water Rates
Water Capital Improvement Projects
Project Title Fiscal Year(s)Estimated Cost
Central Coast Blue 2023-2026 $6,938,241
New Production Well 2023-2025 $2,500,000
Advanced Metering Infrastructure 2024-2025 $2,500,000
Bello Reservoir Roof Replacement 2024 $1,210,000
Charles Street Reservoir Replacement 2023-2024 $1,803,500 Bello-Price/ Highway 1 Waterline
Upgrade
2027 $1,913,400
10 Sufficient Reserves: Rates include supporting the sufficient reserves for the water system for operating, capital projects, emergency reserve, and other reserves
Current and Proposed Water Rates
11 Proposed
Current Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Meter Size Water Meter Fixed Charge ($ per bi-month)
5/8"$38.24 $39.38 $40.60 $41.86 $43.16 $44.50
3/4" $38.24 $39.38 $40.61 $41.87 $43.17 $44.51
1"$58.36 $63.18 $65.15 $67.17 $69.26 $71.41
1.5"$108.01 $122.44 $126.24 $130.16 $134.20 $138.37
2"$168.72 $194.00 $200.02 $206.23 $212.63 $219.23
3"$340.10 $388.61 $400.66 $413.09 $425.90 $439.11
4"$521.67 $603.08 $621.78 $641.06 $660.94 $681.43
6"$1,219.31 $1,433.71 $1,478.16 $1,523.99 $1,571.24 $1,619.95 Variable Charge ($ per HCF)
Single Family
Tier 1 - 0 to 10 units $5.58 $6.02 $6.21 $6.41 $6.61 $6.82 Tier 2 - 11 to 16 units $6.36 $6.72 $6.94 $7.16 $7.39 $7.62 Tier 3 - 17 to 32 units $7.29 $8.14 $8.39 $8.66 $8.93 $9.21 Tier 4 - Over 32 units $9.76 $11.21 $11.56 $11.92 $12.29 $12.68 Multifamily $6.48 $6.79 $7.01 $7.23 $7.46 $7.70
Mobile Home $6.58 $6.79 $7.01 $7.23 $7.46 $7.70
Commercial [1]$8.07 $7.18 $7.40 $7.63 $7.87 $8.12
Irrigation [1]$7.14 $7.24 $7.47 $7.71 $7.95 $8.20
Construction $8.23 $6.58 $6.79 $7.01 $7.23 $7.46
[1] Includes Municipal customers.
Proposed Wastewater Rates
Wastewater Capital Improvement Projects
Project Title Fiscal Year(s)Estimated Cost
Central Coast Blue 2023-2026 $14,505,490
Advanced Metering Infrastructure 2024-2025 $2,500,000
Wastewater Maintenance and
Improvement
2023-2024 $2,083,309
Harloe Lift Station Bluff Stabilization 2026 $1,030,000 13 Sufficient Reserves: Rates include supporting the sufficient reserves for the wastewater system for operating, capital projects, emergency reserve, and other reserves
Current and Proposed Wastewater Rates
14 Fixed Charges by Meter Size
Current Proposed
Meter Size Jan 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 inches Fixed Charge ($ per bi-month)
5/8"$31.22 $32.28 $34.21 $36.30 $38.51 $40.86
3/4" 44.95 46.23 49.00 51.99 55.16 58.53
1"72.40 74.15 78.58 83.37 88.46 93.86
1.5"141.03 143.92 152.53 161.83 171.71 182.18
2"223.38 227.66 241.26 255.98 271.59 288.16
3"442.99 450.95 477.89 507.04 537.97 570.79
4"690.04 702.15 744.10 789.49 837.65 888.75
6"$1,650.82 $1,679.05 $1,779.36 $1,887.90 $2,003.06 $2,125.25 Residential Fixed Consumption Charges
Current Proposed
Classification Jan 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Fixed Charge ($ per bi-month)
Single-family [1]$74.01 $77.27 $82.02 $87.02 $92.33 $97.96 Apartments/Multifamily [1] [2]46.72 48.78 51.78 54.94 58.29 61.85 Mobile Homes [1] [2]$32.38 $33.80 $35.88 $38.07 $40.39 $42.85
Current and Proposed Wastewater Rates
15 Variable Rates
Current Proposed
Classification Jan 1, 2023 Jan 1, 2024 Jan 1, 2025 Jan 1, 2026 Jan 1, 2027 Jan 1, 2028 Variable Charge ($ per HCF)
Commercial $9.06 $9.83 $10.43 $11.07 $11.74 $12.46
Dual Residential/Restaurant 12.78 13.53 14.36 15.24 16.17 17.15 Dual Residential/Commercial 8.75 9.25 9.82 10.42 11.05 11.73 Grocery 16.22 17.76 18.86 20.01 21.23 22.53
Hotel 7.51 8.18 8.69 9.22 9.78 10.38
Hotel w/Restaurant 12.19 17.31 18.38 19.50 20.69 21.95
School w/ Cafeteria 7.47 8.27 8.78 9.32 9.88 10.49
School 4.80 5.11 5.43 5.76 6.11 6.49
Shopping Center 6.50 7.36 7.81 8.29 8.79 9.33
Shopping Center w/ Restaurant 15.76 17.31 18.38 19.50 20.69 21.95 Trailer/RV 4.06 4.37 4.64 4.92 5.22 5.54
Service Station 7.26 7.47 7.93 8.41 8.93 9.47
Restaurant / Bakery 16.33 18.63 19.78 20.99 22.27 23.63 Municipal $6.31 $6.91 $7.34 $7.79 $8.26 $8.77
[1] Residential customers are charged a fixed charge per bi-month for consumption. [2] Apartments, Multifamily, and Mobile Homes are charged by the dwelling unit.
Community Impact
Number of Water Customers by Type
17 Single Family
82.0%
Multifamily
6.7%
Mobile Home
0.2%
Commercial
6.8%
Irrigation
3.3%
Construction
0.9%
Residential customers include
Single Family, Multifamily, and
Mobile Home = 89%
Non-Residential customers
include Commercial, Irrigation,
and Construction = 11%
Residential Water Customers
18 Of those residential water
meters, 92% are single family
meters.
The majority of those single-
family meters are sized at ¾”
meters consuming on average
14 HCF every two months.
Single Family
92.2%
Multifamily
7.5%
Mobile Home
0.2%
Estimated Water and Wastewater Bill Bi-Monthly
Impact for Average Residential Customer
21 Average Single
Family Residential
Fee
Average Water &
Wastewater Bill
Increase ($)
Average Water &
Wastewater Bill
Increase (%)
January 2024 $11.52 4.83%
January 2025 $11.53 4.61%
January 2026 $12.13 4.64%
January 2027 $12.70 4.64%
January 2028 $13.36 4.67%
How do the Proposed Rates Compare to Other
Communities?
Combined Water and Wastewater Bill
Compared to Other Communities
23Does not account for projected rate increases in San Luis Obispo and Grover Beach
Public Hearing
Public Hearing
•If written protests are received for at least a majority (50% plus one) of Pismo Beach parcels prior to the
closure of the public hearing, no further proceedings to impose the water or wastewater rate changes shall take
place during the ensuing fiscal year.
•If protests received are not more than 50% of the
eligible parcels, the Council may proceed to adopt a
resolution approving the City’s new water and
wastewater rates.
•50% is approximately equal to 2,400 protests
25 Recommendation
Staff Recommendation:
•Hold a public hearing; receive input and written protests, if any, from the public on the proposed changes to water and
wastewater rates
If protests are received for less than a majority of eligible parcels:
•Approve a Resolution adopting new water and wastewater fees for FY 2024 through FY 2028, effective January 1, 2024. 27